Ligao Foods Co.Ltd(300973) (300973)
Mainly distribution, supplemented by direct sales, and the contribution of business supermarket channels has increased in recent years. After years of deep cultivation, the company has built an extensive and in-depth sales network. As of 2021h1, the company's distribution revenue accounted for 68%. The channel network spread all over China's provinces, municipalities and autonomous regions except Hong Kong, Macao and Taiwan, and went deep into 357 cities. There were more than 1800 cooperative dealers, more than 380 direct sales customers and more than 50000 end customers. Among them, the company chooses the "small business" route, and the dealers mainly play the role of "intermediate distributor". With the expansion of direct sales channels, the proportion of direct sales has increased. The overall channel structure is characterized by wide coverage and diversified customer structure, and the stickiness of various channels continues to strengthen.
High channel intensive cultivation has achieved remarkable results and built strong barriers. Through years of intensive channel cultivation, the company has achieved remarkable results and built strong channel barriers: 1) forward-looking layout, taking the lead in building a channel network with both breadth and depth: once the cooperative relationship between legao and customers is established, the replacement risk of original products is small, the channel reuse rate is high, and the first mover advantage is significant; 2) Build a sales team with strong customer expansion and service ability: the application scenario of LEGO baking products is relatively closed, there is a lack of direct price comparison between products, and certain technical guidance is required in the actual application process. The high-frequency and professional service ability of LEGO sales team perfectly grasps the essence of baking product sales; 3) Weakening dealer functions: while improving dealer loyalty, control the terminal in the hands of their own salespeople; 4) As the endorsement of channel power, competitive product power and supply chain complement each other to support the high growth of the company's performance.
Channel advantages contribute to high turnover and drive roe to lead peers. LEGO roe is a leader in the same industry. The main reason is that the company has strong channel control. It adopts a strict due collection system for dealers and customers, adopts the production mode of setting production by sales and the refined production and procurement mode, and the total asset turnover rate is much higher than the industry average level, driving the company's roe level to lead its peers. The channel advantage has built a broad moat for it.
Investment suggestion: the company is still in the track of rapid growth, frozen baked goods are still in the early stage of development, and there is still much room for improvement in penetration in the future. As an industry leader, the company takes the lead in the market. Channel barriers have emerged. It is in the upward stage of capacity expansion and has growth potential. It is estimated that the company's revenue in 2021, 22 and 23 will be RMB 2.81/36.5/4.65 billion respectively, with a year-on-year increase of + 55.1% / 29.9% / 27.6% respectively; The net profit attributable to the parent company was RMB 290 / 350 / 500 million, respectively + 23.6% / 22.7% / 43.2% year-on-year, corresponding to pe82.5% 5 / 67.2 / 46.9x. After adding back the equity incentive fee, it is estimated that the adjusted net profit attributable to the parent company in 2021 / 22 / 23 will be RMB 310 / 42 / 550 million, a year-on-year increase of + 34.4% / 34.2% / 31.0%; The current market value corresponds to 75.9 / 56.6 / 43.2 times of PE, maintaining the "buy" rating.
Risk tips: food safety risk, new product promotion is not as expected, industry competition intensifies, investigation and sample selection or error risk
