\u3000\u3 China Vanke Co.Ltd(000002) 507 Chongqing Fuling Zhacai Group Co.Ltd(002507) )
Key points
21q4 profit growth exceeded expectations. In the whole year of 21, the company achieved a revenue of 2.519 billion yuan, a year-on-year increase of 10.82%; The net profit attributable to the parent company was 742 million yuan, a year-on-year decrease of 4.52%. Among them, 21q4 company achieved a revenue of 563 million yuan, a year-on-year increase of 18.74%; The net profit attributable to the parent company was 238 million yuan, a year-on-year increase of 45.73%.
Both ends of volume and price drive the company’s performance to change periodically. The cyclical change of the company’s revenue growth rate is highly related to the company’s volume and price strategy. 1) Volume: determined by the company’s dealer strategy, channel inventory strategy, expense delivery strategy, etc; 2) Price: it is divided into direct price increase and indirect price increase. Whether the price increase is successfully achieved depends on the external macro conditions, which in turn affect the price and sales volume. Overall, as the absolute leading enterprise in the industry, the company has stronger price control than other condiment companies. Whether it is in the economic cycle and the inventory level determine the change of quantity; The high fluctuation of cost side green vegetable price determines that the company has high profit elasticity. In 2022, the downward trend of the company’s cost is clear, and there is a certain room for profit release.
The online price transmission is smooth, and the offline price transmission is expected to be completed in March. The company began to raise the price in November of 21. On the whole, the price increase is carried out steadily according to the company’s plan, and it is expected to be completed in March this year. The implementation of price increase can be seen through different channels: 1) online: the company’s authorized stores and flagship stores have all completed the price adjustment, and the non authorized stores are still in the process of adjustment. The main product of tmall flagship store is 70g fresh and crisp shredded mustard, which is 3.5 yuan per package. There is no discount promotion. Online promotion activities focus on small packages of mustard under 30g. 2) Circulation channel: in January 2022, the circulation channel completed price transmission. 3) Supermarkets: the price transmission is relatively complex. As of the middle of March 22, 80% of supermarkets in China have completed the price adjustment, which is expected to be completed in March.
The price increase superimposes the cost downward, and the 22-year profit elasticity can be expected. 1) The downward certainty of raw material cost is high: the raw material cost of the company accounts for about 45%. The purchase price of qingcaitou was about 800 yuan / ton in 22 years (the market purchase price is about 780 yuan / ton), which is significantly lower than the purchase price of 1100 yuan / ton in 21 years. It is expected to start using the new qingcaitou at the end of April or early May. 2) Strong bargaining power on packaging materials and controllable cost: Although the price of packaging materials has increased recently, the company has strong bargaining power on the upstream and does not accept the price increase. At present, the cost pressure of packaging materials has not been transmitted to the company. 3) Increase the price to improve the profit elasticity space: the average price of the company’s products increased by 14% at the end of 21 years, and the profit elasticity of the company in 22 years is large. However, it should be noted that 22q1 has a high profit end pressure due to the high base in the same period last year and the high price green vegetable head still in use for 21 years. It is expected that the pressure on the cost side will be gradually released after 22q2 company starts to use the low-cost green vegetable head for 22 years.
Profit forecast, valuation and rating: considering the great certainty of the company’s cost decline, we raised the company’s net profit attributable to the parent company from 2022 to 2023 to 996 / 1170 million yuan respectively (compared with the previous time + 10.9% / + 12.7%), and introduced the forecast of net profit attributable to the parent company in 2024 to 1289 million yuan, equivalent to EPS of 1.12/1.32/1.45 yuan from 2022 to 2024 respectively. The current stock price corresponds to PE of 27x / 23x / 21x from 2022 to 2024, maintaining the “buy” rating.
Risk warning: raw material price fluctuation risk; Industry competition is higher than expected risk.
