\u3000\u3 China Vanke Co.Ltd(000002) 183 Eternal Asia Supply Chain Management Ltd(002183) )
Events
According to the performance express in 2021, the company achieved an operating revenue of 71.228 billion yuan in 2021, a year-on-year increase of 4.35%; The net profit attributable to the parent company was 512 million yuan, a year-on-year increase of 314.95%; Deduct the net profit not attributable to the parent company of 513 million yuan, with a year-on-year increase of 533.89%, turning losses into profits; 21q4 achieved an operating revenue of 18.094 billion yuan, a year-on-year decrease of 26.45%; The net profit attributable to the parent company was 97 million yuan, a year-on-year increase of 129.79%; Deduct 107 million yuan of non parent net profit and turn losses into profits. In addition, the company recently issued a stock option incentive plan, which is expected to further stimulate the vitality of the management.
Comments
The bottom of profitability has passed, and the brand operation business contributes high profit elasticity
In 2021, the company’s performance is in line with expectations, with excellent profit-making performance, or mainly from: 1) the company’s operating revenue growth, vigorously promote the adjustment of business structure, continuously increase the proportion of brand operation and marketing business, and it is expected that the net profit of liquor brand operation business may account for 40%; 2) Investment income from the continuous shutdown and transfer of project companies with weak profitability and large capital occupation; 3) The company completed the non-public offering of new shares in July 2021, optimized the financing structure and effectively reduced the financing cost. In terms of brand operation business, new products with high gross profit are one of the sources of performance increment in 2021 (Abstract 12, red star 1949, Datang secret manufacturing, baiaubenji, xiangnaluer, ruxiansen, etc.), and the ton price of Diaoyutai enamel color of large single product has been increased (price increase + structural upgrading). Since the company launched the brand operation business in 2019, the business structure has been continuously upgraded. Since the gross profit margin of the brand operation business is much higher than the overall gross profit margin of the company, it is expected to become a new profit growth point of the company in the future.
The implementation of the stock option incentive plan is expected to further stimulate vitality
On the evening of February 24, the company announced that it would launch the 2022 stock option incentive plan. Specifically: 1) quantity: the total number of stock options to be granted to incentive objects is 77.91 million, accounting for about 3.00% of the total share capital of the company at the time of announcement of the incentive plan, which is 25970991 million shares; 2) Awarding objects: the total number of incentive objects granted in this plan is 182, including directors, senior managers, middle and senior managers and core backbone personnel of the company; 3) Grant price: the exercise price of the stock options granted under the plan is 5.49 yuan / share; 4) Exercise arrangement: the first, second and third exercise periods are respectively 40% / 30% / 30% from the first trading day after 12 / 24 / 36 months from the date of authorization to the last trading day within 24 months from the date of authorization. 5) Performance appraisal: the appraisal year corresponding to the exercise of stock options granted in this incentive plan is 22-24 years, three accounting years, and the appraisal is conducted once in each accounting year. Meeting the performance appraisal goal is one of the exercise conditions of the incentive object in the current year. The assessment objectives of the first, second and third exercise periods are: net profit: the net profit shall not be less than 6 / 8 / 1 billion yuan; Non recurring income: no more than 30%, 30% and 30% of net profit.
We believe that: 1) the goal of the equity incentive plan can be achieved or is expected to further stimulate the vitality of the company. According to the calculation of incentive target, the net profit growth rate in 22-25 years is expected to be at least 10%, 33% and 25%, and the probability of achieving the target is high; 2) The company’s brand operation business (sauce and wine related business) will continue to contribute high profit elasticity and has strong potential; 3) The bottom of profitability has passed, and expense control has helped the net interest rate rise; 4) The business model continued to be optimized, and the profit side of the company continued to perform strongly.
More than expected development point: take advantage of the wind of sauce and wine, and the brand operation business will rise
Based on the understanding of small B and large B and C ends, the company has started to cultivate, empower and operate high-quality brands since 2017. Combined with the reverse accurate selection (c2m) of consumption trend, the company has fully tapped the brand potential and launched brand operation business in the field of large consumption, The Baijiu sector is bright. In 2020, the company’s Baijiu brand operation business achieved the profit margin of nearly 10% by operating Diaoyutai enamel and ten years’ black and gold products, and less than 5% of the total revenue. In 2021, the company will further add some exclusive products to the rich product matrix, except for the original large single products. The summary 12 launched by 21q3 has begun to thicken the performance, which can be focused on. Under the sauce hot wine, we have estimated that the scale of 2025 is at least 4 billion yuan. We predict that the Baijiu is expected to achieve a super expected performance. With the successful experience of the company in the development of the Baijiu sector, we have copied it to the small household appliances and medical beauty fields with higher gross margin. We believe that the scale of the brand operation business of the company is 23-25 billion over the past decade, and the profit side can be expected to meet the deadline.
Profit forecast and valuation
We believe that Eternal Asia Supply Chain Management Ltd(002183) will benefit from the steady development of the basic market, the accelerated development of high margin brand operation business, the gradual stripping of drag projects and the implementation of fixed growth. It is estimated that the revenue growth rate from 2021 to 2023 will be 4.4%, 7.9% and 8.1% respectively; The growth rate of net profit attributable to the parent company was 314.9%, 39.6% and 29.2% respectively; EPS is 0.2, 0.3 and 0.4 yuan / share respectively; PE was 26, 18 and 14 times respectively. In the long run, the performance has strong growth, the current valuation is cost-effective, and the buy rating is maintained.
Catalyst: continuous consumption upgrading and smooth introduction of high priced products.
Risk warning: the two outbreak of China’s epidemic situation affects the whole Baijiu sale of liquor. The sales of high-end liquor was less than expected; Financial issues; Management change risk.
