Gaishi food (836826)
Gaishi food is a leading enterprise of prefabricated cold dishes in China. The company is an enterprise integrating the research, production and marketing of prefabricated cold dishes such as marine food and edible fungus food. It is a national key leading enterprise and a national high-tech enterprise in agricultural industrialization. In 2021, the company’s revenue was 344 million yuan (+ 57.29%), and the net profit attributable to the parent company was 42.788 million yuan (+ 60.86%).
The demand for prefabricated cold dishes has expanded and the supply has been standardized.
(1) China’s Prefabricated vegetable industry as a whole is in a stage of rapid development. According to AI media consulting data, the market scale of China’s Prefabricated vegetable industry will reach 288.8 billion yuan in 2020. It is expected that the market scale of China’s Prefabricated vegetable industry will reach 516.5 billion yuan in 2023, and the CAGR will be 21% from 2019 to 2020.
(2) demand side of prefabricated cold dishes: the short-term and medium-term market growth mainly benefits from the demand of end B. under the demand of cost reduction in the catering market, the use of prefabricated cold dishes can reduce costs in three aspects: reducing cold dish room, reducing labor cost and energy miscellaneous expenses. Moreover, with the improvement of chain rate, the improvement of standardization requirements and the accelerated development of takeout have driven the demand for prefabricated cold dishes to rise. In the long run, the change of C-end consumption habits will also bring a broad market. The trend of family miniaturization and the rise of young people’s working hours promote the substitution of prefabricated cold dishes for existing products.
(3) supply side of prefabricated cold dishes: cold chain development ensures supply. According to the data of China chain operation association, the scale of cold chain logistics market reached 378 billion yuan in 2019, with a compound growth rate of 20.3% in the past five years. The development of cold chain logistics has promoted the overall development of China’s catering supply chain and effectively expanded the transportation and supply radius of prefabricated cold dishes. The market competition of prefabricated cold dishes is fierce, and will continue to integrate into standardization and high quality. At present, the industry is dominated by small and medium-sized enterprises with low concentration. With the increase of national supervision on safety and environmental protection and the continuous improvement of consumers’ requirements for food safety and health, the industry will further adjust and differentiate.
Product quality, high-quality customers and cost control jointly build the competitiveness of the company.
(1) technology research and development and quality management jointly build a food safety defense line. As of December 31, 2021, it has obtained 28 patents (including 3 inventions and 25 utility models), 8 computer software copyrights and 36 registered trademarks, and has established a multi-level total quality and product management system to continuously ensure product quality.
(2) establish high-quality customer matrix and flexible sales model. The company has covered 57 countries and regions around the world, has established contacts with more than 300 partners around the world, has become a supplier of more than 1000 stores in China, and has established long-term cooperative relations with high-quality customers such as Haidilao. Constantly adjust the sales business structure, strengthen contract production and sales business and private brand sales business, and improve the overall gross profit margin.
(3) strengthen the cost advantage of location layout and automatic production. Dalian plant has the advantages of coastal algae and other seafood raw materials and cold chain. Jiangsu new plant has the advantages of fungi and vegetable raw materials to strengthen the advantages of supply chain; The company continuously strengthens the standardization of production and the guarantee of labor quality.
Expand production + new products, improve product power, and expand customers in three markets.
Product side: (1) the raised investment project will bring new production capacity. In December 2020, the company plans to invest 610944 million yuan of the raised funds listed in the selection layer to carry out the construction of 10000 tons of edible fungi, vegetables and frozen seasoning food project in Huai’an, Jiangsu Province. On March 11, 2022, the company issued the plan of the board of directors with a fixed increase, which will build an intelligent manufacturing project with an annual output of 15000 tons of prefabricated cold vegetables, and further expand the production base in Jiangsu. (2) Provide integrated procurement services for new product R & D. The company’s new product research and development is divided into two directions: horizontal expansion of new categories, such as meat cold dishes, and vertical development of high-end prefabricated cold dishes, such as sea cucumber and abalone.
Sales side: (1) three markets are expanded in stages. Foreign tob Market: it is generally in a mature stage to consolidate existing customers and provide one-stop products and services to further expand the market; China tob Market: the company has a high brand awareness. In 2021, Shanghai Gaishi Food Technology Co., Ltd. was established in Shanghai to further tap the needs of major customers and seize the channel under the trend of chain; China to C Market: it is still in the initial development stage. The company’s Wuxi Online Offline Communication Information Technology Co.Ltd(300959) channels are developed simultaneously for its long-term cultivation goal. (2) Long term benefit from RCEP promotion. The policy is expected to reduce the purchase cost of customers and benefit the expansion of customers in foreign markets for a long time.
Profit forecast, valuation and investment rating: we predict that the operating revenue of the company from 2022 to 2024 will be RMB 452 / 570 / 646 million respectively, the net profit attributable to the parent company will be RMB 53 / 0.65/0.80 million respectively, the net profit attributable to the parent company CAGR from 2021 to 2024 will be 23%, and the diluted EPS calculated based on the current total share capital of 89 million shares will be RMB 0.60/0.74/0.91. The current share price of the company predicts that the PE multiples of EPS from 2021 to 2023 are 22 / 18 / 15 times respectively. With reference to the valuation of comparable companies and considering the high growth brought by the continuous prosperity of the industry, the company gives a “buy” rating for the first time.
Risk tips: 1) the progress of the company’s raised investment projects is not as expected and the risk of new production capacity is digested; 2) Large customer sales account for a relatively high risk; 3) The risk of intensified market competition; 4) High risk of overseas income; 5) The risk that the information based on the research is not updated in time and fails to fully reflect the latest situation of the company
