Qingdao Richen Food Co.Ltd(603755) (603755)
Event: today, the company issued an announcement, deliberated and passed the proposal on granting stock options to incentive objects. Taking December 16, 2021 as the grant date, it was determined to grant 1356300 stock options, accounting for 1.38% of the total share capital of the company at the time of the announcement. The incentive is mainly for the company’s middle and senior managers and core backbone personnel, involving a total of 34 people.
Catering recovery is still flexible, and multi-channel layout is based on the long term. Due to the repeated epidemic, the recovery of catering channels is less than expected. According to the big data such as delicious food, there is a gap in the current catering business stores and the amount of consumption in stores compared with the same period in 2019. We expect that the recovery of catering channels will still be flexible next year. Although the company’s catering channel revenue growth slowed significantly due to the epidemic in the third quarter of this year, the orderly development of b-end customers contributed a large increment to the reserve of new customers. At the same time, the restoration of the catering industry is also expected to bring growth potential. In addition, while tapping the b-end demand, the company also carries out the C-end channel layout, and the dealer team continues to expand. By 2021q3, the number of dealers of the company has reached 174 (an increase of 52 year-on-year).
The incentive mechanism has been continuously optimized and the personnel team has been continuously improved. In October 2021, the company launched the adjusted stock option incentive plan to expand the incentive coverage, At the same time, Cui ZHENGBO, deputy general manager of sales, was added to the incentive list (options accounted for 10.82%, ranking first), which fully encouraged the sales backbone. In addition to equity incentive, the number of company personnel, especially sales personnel, increased significantly this year, and the salary also increased significantly (the management fee rate in the first three quarters of 2021 increased by 2.07pct year-on-year). We believe that team expansion and incentive optimization are expected to further tap the company’s growth potential.
Capacity expansion supports growth, the general trend of catering chain remains unchanged, and we are optimistic about the company’s long-term development space. According to China’s catering big data and meituan data, the trend of catering chain in China will not change. In 2020, the proportion of catering stores of catering enterprises with 3-100 and 100-500 chain stores will increase significantly in 2020. We believe that the development of chain catering will open the space for long-term development. In this context, the company has accelerated the production capacity layout. The 15000 ton compound seasoning production base construction project and the 5000 ton soup extraction production line project are expected to reach the production capacity in September 2022. With the capacity expansion superimposed on the launch of SAP system, we expect that the company’s ability to develop and serve customers is expected to be improved. In addition, the company announced at the beginning of this year that it plans to establish an industrial M & A fund to seek category development. We are optimistic about its long-term development.
Profit forecast: we expect the company’s revenue to be RMB 3.4/4.5/590 million in 2021, 2022 and 2023 respectively, and the net profit attributable to the parent company in 2021, 2022 and 2023 is expected to be RMB 9 / 1.2/160 million (year-on-year + 11% / 35% / 33%), corresponding to the current price earnings ratio of 51x / 38x / 29x, maintaining the “buy” rating.
Risk warning: the impact of epidemic situation is uncertain; Industry competition intensifies risks.
