Zhe Jiang Li Zi Yuan Food Co.Ltd(605337) (605337)
The revenue in peak season is accelerating month on month, and the reservoir is gradually abundant
The company’s revenue from 2021q1-q3 was 1.055 billion yuan, an increase of 45% at the same time; The net profit attributable to the parent company was 195 million yuan, an increase of 35% at the same time. Among them, the revenue of 2021q3 was 375 million yuan, an increase of 26% at the same time; The net profit attributable to the parent company was 66 million yuan, an increase of 7% at the same time. The gross profit margin of 2021q1-q3 is 36.78%, of which 2021q3 is 36.41%, with a decrease of 1.83pct, which is caused by the rise of raw materials; The net interest rate from 2021q1 to Q3 is 18.48%, of which 2021q3 is 17.60%, with a decrease of 3.17pct. At the end of 2021q3, the contract liabilities were 87 million yuan, an increase of 28 million yuan month on month and 03 million yuan at the same time.
The momentum of milk containing drinks has not decreased, and the distribution channel has accelerated the expansion
By product, the company’s revenue from 2021q1-q3 milk beverage was 1.025 billion yuan, an increase of 47.3%. Among them, the revenue of 2021q3 was 365 million yuan, an increase of 28% at the same time, and the high growth momentum remained unchanged. It is the peak sales season in August and September. By channel, the company’s 2021q1-q3 distribution channel revenue was 1.027 billion yuan, an increase of 46.2%. Among them, the 2021q3 distribution channel revenue was 362 million yuan, an increase of 25%, which was caused by the accelerated regional expansion of the company.
Product innovation and regional expansion
The company is the leader of sweet milk beverage, which has been established for 28 years. The company’s main single product is sweet milk, which has sold well in the market for many years. The main consumer group is people aged 10-40, which is packaged in 450ml and 225ml. In 2021, three new 280ml fruit and vegetable milk drinks, coffee milk and coconut milk were launched, with good market response. We expect the annual sales to exceed 100 million yuan in 2021 (half of which is expected to be fruit and vegetable milk drinks), which is the key product of the company in 2022.
The advantageous areas of the company are in East China and Yunnan. At present, it is expanding to Anhui, Henan, Jiangxi and southwest regions, two lakes and two cantons. At present, marketing teams have been established in major provinces to explore channels with dealers.
The regional expansion capacity is the first, and the capacity provides guarantee for the company’s expansion. At present, the company has five production bases: Zhejiang Jinhua, Zhejiang Longyou, Jiangxi Yichun Shanggao, Yunnan Qujing and Henan Hebi. The company has a production capacity of more than 300000 tons. Henan Hebi company has been officially put into operation at the end of December. It is expected to reach more than 400000 tons after it is fully put into operation. Regional expansion capacity first
Profit forecast
We are optimistic about the company’s continuous large-scale new products and national expansion. It is expected that the EPS will be 1.23/1.55/1.93 yuan from 2021 to 2023, and the current share price corresponding to PE will be 39 / 31 / 25 times respectively. It will be covered for the first time and given a “recommended” investment rating.
Risk statement
Macroeconomic downside risk, epidemic drag on consumption, new product promotion is less than expected, raw materials rise sharply, production capacity is less than expected, single product risk, etc.
