Ganyuan Foods Co.Ltd(002991) (002991)
Investment suggestion: Ganyuan Foods Co.Ltd(002991) is a typical “product oriented” company. With the super product power of green beans, broad beans and melon seeds, it has become the head brand of seed nuts. After listing in mid-2020, the company’s income growth slowed down due to internal and external reasons, and the market attention was low. We judge that in 2022, new products will be upgraded intensively and in large quantities, and the cost side and expense side will be diluted or reduced. The performance has a certain flexibility, and the valuation will also be improved with the expectation of performance acceleration. We expect the company’s EPS to be 1.49, 2.52 and 3.69 yuan in 21-23 years, giving a “buy” rating.
2021 focuses on products and 2022 focuses on marketing. With strong product strength and rich product portfolio, the company will enter a period of accelerated development. The company has launched new products such as comprehensive nuts, flavor nuts and peanuts in recent year. It is expected to further upgrade products and launch more new products in 2022. Such “product superposition” can not only directly drive revenue growth, but also drive the old products to form a richer product matrix and greatly increase the attraction to dealers. It is expected that the company will be in supermarkets, convenience stores Circulation channels and e-commerce can achieve high growth.
Traditional stores are facing the needs of transformation. Ganyuan has the opportunity to connect more stores with strong selection ability by virtue of product strength. The company responded quickly to the channel transformation. The feedback of individual flavor nuts in the market was good, which boosted the confidence in the company’s new products. It plans to create more high-quality products and drive the in-depth cooperation of major channels. From the perspective of aokun’s supply of hot products such as cassava and Swiss rolls to member supermarkets, it not only reflects the company’s product power, but also improves the company’s industry position. Traditional supermarkets are facing an important transition period. The “lying down” mode of charging entry fees can no longer meet the current competitive requirements. Active and strong selection ability will become one of the key competitiveness of stores. Gan yuan is expected to have the opportunity to enter more member supermarkets with its product reputation.
The cost side and expense side have downlink space. First, under the epidemic situation, palm oil, packaging materials and some nut raw materials have increased in varying degrees. With the controllable epidemic situation, the variable cost will fall from a high level; Second, the fixed cost of Anyang plant will be diluted with the large volume of new products, and accelerating the automation level of manufacturing equipment will also help to reduce operating costs; Third, at the sales end, the bar code fee for the entry of new products belongs to a one-time investment. With the large volume of new products, this fee will continue to be diluted; Fourth, on the brand side, according to the development idea of first product, then channel and then brand, the company will be more pragmatic in advertising promotion fees. The net profit margin of the company will reach 15% in 2019 and 2020, while the profit margin will decline significantly due to the influence of internal and external factors in 2021. It is expected that these four factors will help the company’s profit margin gradually return to the previous level or even exceed the previous level.
The company has carried out share repurchase for equity incentive in the next step, and its organizational strength has been further improved. As of November 30, 2021, the company has completed a share repurchase of nearly 60 million yuan, with a repurchase price of around 45-49 yuan. At the same time, the company has successively introduced a number of industry veterans to appoint regional directors in 2021, which can be regarded as an upgrade of the marketing team. The short-term personnel alternation has affected the sales volume, but the marginal improvement of organizational power is worth looking forward to.
Stock price catalyst: new category sales exceeded expectations and channel development exceeded expectations.
Risk factors: price fluctuation risk of raw materials, intensified competition in flavor nut industry, and further decline in business Superman traffic.
