\u3000\u3 Bohai Water Industry Co.Ltd(000605) 338 Zhongyin Babi Food Co.Ltd(605338) )
Events
The company released the annual performance report of 2021
In 2021, the company achieved a revenue of 1.375 billion yuan, a year-on-year increase of 41.06%, and a net profit attributable to the parent company of 314 million yuan (a profit of 150 million yuan due to the Eastroc Beverage (Group) Co.Ltd(605499) listing of the investment), a year-on-year increase of 79.15%, and a net profit attributable to the parent company of 152 million yuan after deduction, a year-on-year increase of 18.06%.
Brief comment
The rapid opening of stores drives the high growth of income. In 2021, the company continued the strategy of fast opening stores, with smooth and rapid investment attraction in South China and active expansion in North China. The M & A stores in Central China are expected to be consolidated in 2022. Q4 company achieved a revenue of 402 million yuan, a year-on-year increase of about 26%; The net profit attributable to the parent company was 88 million yuan, with a year-on-year increase of about 22% and a month on month improvement.
Store upgrading + takeout + new products and other ways to improve the revenue of a single store. The company upgraded the overall image of store signs, decoration, steamers and so on, and the upgraded stores increased the operating revenue by an average of 20%. The company cooperates with meituan and other delivery platforms, and the delivery business contributes about single digits to the revenue of a single store. With the improvement of the familiarity of surrounding customers, the proportion of delivery contribution is expected to further increase. The continuous introduction of high price new products also helps the company improve the revenue of single store.
Nanjing plant put into operation + Wuhan plant proposed to establish capacity foundation for expansion outside the province. The Nanjing plant will probably be put into operation in 2022 to release production capacity, mainly covering Nanjing, Anhui and Northern Jiangsu, so as to solve the problem of long transportation time and difficult to ensure the freshness of products. The company recently announced that it plans to purchase the land use right for the construction of Wuhan intelligent manufacturing center, which reflects the company’s determination to vigorously enter central China. It may indicate that the current sales situation in Wuhan is relatively good. In the long run, the layout of the factory can further improve the taste and product quality.
Profit forecast and investment suggestions: the company operates breakfast franchise stores and provides stuffing and dough for finished or semi-finished products. It is a practitioner of Chinese breakfast industrialization. Under the background of high labor cost, the company can help improve production efficiency. The company originated in Shanghai, and its franchise stores have expanded from East China to north, South and central China. In particular, Wuhan has achieved more store layout through acquisition. The company was the first to start the breakfast store management, leading the formulation of many standards for breakfast store management. Over the years, it has formed a mature and perfect franchise system. The single store model can be copied. The company has great potential in accelerating the expansion of stores and forming a national chain operation. In terms of group meals, the company has been able to provide customers with high-quality and delicious products through many years of operation experience, so as to achieve rapid income growth. It is estimated that from 2022 to 2023, the company’s revenue will be 1.654/2 billion yuan respectively, with a year-on-year increase of 20% / 21%, the net profit will be 244 / 293 million yuan respectively, with a year-on-year increase of – 22% / 20%, and the corresponding PE will be 29 / 24 respectively. Give a “buy” rating.
Risk tip: raw material price fluctuation, food quality control, store opening less than expected, industry competition intensifies the risk.
