\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 305 Jiangsu Hengshun Vinegar-Industry Co.Ltd(600305) )
Key investment points
Event: the company reached an agreement with the controlling shareholder] Hengshun Group to sell 51% equity of Hengshun mall to Hengshun Group at the price of RMB 84081200, and Hengshun Group will pay the purchase price in cash.
Transfer the equity of Hengshun mall, focus on the main business, and demonstrate the determination. Hengshun mall is a Jiangsu Hengshun Vinegar-Industry Co.Ltd(600305) wholly-owned subsidiary. It was established in December 2012 to realize the strategic adjustment of the company’s existing industrial layout and divest the real estate development business by means of survival and separation. In 2019, through the resolution of the board of directors, the company entrusted Hengshun mall to Hengshun real estate, a wholly-owned subsidiary of Hengshun Group, the controlling shareholder, for operation. After the company sells 51% of its equity in 2022, the scope of the company’s consolidated statements will change, and the equity investment in Hengshun mall will be accounted for by the equity method. Hengshun mall is currently the largest non main business asset within the company. This transfer reflects the determination of the municipal Party committee, the municipal government and the municipal SASAC to support the company to further focus on the main business of condiments.
Constant growth helps to expand production capacity and continuously promote category expansion. The company issued a fixed increase plan in November of 21, and plans to issue no more than 130 million shares to no more than 35 specific objects, accounting for 30% of the total share capital. The total amount of funds to be raised this time will not exceed 2 billion yuan, which will be used to expand the existing production capacity of vinegar, soy sauce and cooking wine. At the same time, 100000 tons of intelligent condiment production capacity and 100000 tons of compound production capacity will be added. Adhering to the development strategy of vinegar, wine and sauce, the company has expanded the production capacity of vinegar and cooking wine, which will further break through the bottleneck of production capacity. At the same time, the company has gradually developed polyphonic products. In the past 21 years, the company has achieved nearly 10 million revenue from braised meat and sour soup fat beef sauce bag. With the continuous landing of polyphonic production capacity, the company is expected to open up the space for revenue growth.
The effectiveness of reform has been continuously released, and the long-term performance has increased steadily. The company started a number of reforms based on the long term: 1) marketing side: the company started the system reform of World War VIII last year, and carried out market-oriented reform on the evaluation and incentive of sales personnel to fully improve the enthusiasm of the basic sales team. From the channel feedback, the overall dynamic sales performance of condiments from January to February is good, and the marketing reform has achieved initial results. 2) Channel side: the catering channel continues to penetrate with the help of the company’s strong brand power in East China; Propose e-commerce multiplication plan for new retail channels; Strengthen the construction of circulation channels in areas with weak brand strength. 3) Internal talent mechanism: introduce market-oriented talents to improve efficiency; Strengthen the management of talent training internally and establish a 22 year talent echelon training plan. The effectiveness of the company’s multi-level reform continues to be released, and the long-term performance is sure to grow steadily.
Profit forecast and investment suggestions. It is estimated that the EPS from 2021 to 2023 will be 0.15 yuan, 0.19 yuan and 0.25 yuan respectively, and the corresponding PE will be 73 times, 56 times and 42 times respectively, maintaining the “hold” rating.
Risk tips: the risk of sharp fluctuations in raw material prices, the risk of continuous outbreak of covid-19 epidemic, and the risk of deterioration of industrial competition pattern.
