\u3000\u3 Shengda Resources Co.Ltd(000603) 866 Toly Bread Co.Ltd(603866) )
Core view
Event: 1) the company released the annual report. In the past 21 years, the company achieved a revenue of 6.335 billion yuan / + 6.24%, and a net profit attributable to the parent company of 763 million yuan / – 13.54%; Deduct the net profit not attributable to the parent company of 716 million yuan / – 14.40%. 2) 21q4 achieved a revenue of 1.672 billion yuan / + 5.08%, and a net profit attributable to the parent company of 195 million yuan / – 0.95%; Deduct 186 million yuan / – 1.02% of the net profit not attributable to the parent company. It is basically consistent with the previously announced performance express.
Under the influence of the epidemic, the income increased slightly, and the volume in East / Central China continued to increase. The company’s 21q4 revenue growth rate is + 5.08%, which is expected to be caused by the repeated epidemic, the impact of business travel, schools and other channel demand, power and production restrictions, etc. 1) In terms of subregions, the revenue growth of 21q4 in North China / Northeast China / East China / Central China / Southwest / Northwest / South China was 4.09% / – 2.10% / 24.95% / 16.28% / 7.17% / 5.91% / 9.95% respectively. The slowdown of growth in Northeast China compared with Q3 is expected to be related to repeated epidemics and extreme weather. The rapid growth in East China / Central China is expected to be related to the continuous climbing of the capacity of new factories in Jiangsu and Wuhan. 2) From the perspective of dealer expansion, compared with the 38 new dealers at the end of 21q3, the dealers in North China / Northeast China / East China / Southwest / Northwest / South China / Central China changed by 13 / – 1 / 22 / – 3 / 3 / – 1 / 5 respectively, and East China maintained a strong expansion momentum.
The gross profit margin is under pressure and the expense rate remains stable. 1) The gross profit margin of the company was 26.28% / -3.69pct in 21 years, with a year-on-year decline mainly due to: ① the rise of raw material cost; ② The promotion has been strengthened and the return rate has been improved; ③ The proportion of revenue in low gross margin areas such as East China, central China and South China increased. 2) In the 21st year, the company’s sales expense rate was 8.71% / -0.08pct, the management expense rate was 1.76% / + 0.07pct, the financial expense rate was -0.17% / -0.54pct, the R & D expense rate was 0.33% / + 0.14pct, and the depreciation / revenue was 2.10% / + 0.08pct. 3) The net interest rate attributable to the parent company is 12.05% / -2.76pct, and the net interest rate not attributable to the parent company is deducted by 11.30% / -2.72pct; 4) Quarter by quarter, 21q4 achieved a gross profit margin of 26.41% vs 21q3 25.68%, a net profit margin of 11.66% vs 21q3 11.55%, and a slight improvement in profit margin month on month.
Looking forward to the 22nd year, the company set the target of annual revenue growth of 10% and net profit growth of 10.05%. 1) On the revenue side, on the one hand, with the gradual ramp up of production capacity in Jiangsu, Wuhan and Hainan and the gradual production of new production capacity in Zhejiang, Sichuan and Shenyang, the company is expected to maintain stable and large-scale production; On the other hand, since November 21, the company has successively raised prices and reduced promotions for products in different regions, and it is expected that the price increase will also contribute; 2) On the profit side, with the gradual implementation of the company’s price increase, the company is expected to maintain a stable profit margin. In the 2-3-year dimension, with the gradual improvement of the company’s national capacity layout, such as the supply of Quanzhou and Guangxi factories to South China and Zhejiang and Jiangsu factories to East China, the company’s long-term profit margin center is expected to move up: on the one hand, after the production capacity is put into operation, the company’s supply in the local market increases, which is conducive to the company’s market occupation and reduces the company’s return rate and promotion in the long-term dimension; On the other hand, after the new factory is put into operation, the distribution radius of the company is expected to be reduced, and the freight rate and return rate are expected to be improved.
Profit forecast and investment suggestions
Due to the repeated impact of the epidemic in China on sales, the ramp up of production capacity in some areas & the release of new production capacity and the rise of raw material costs, we predict that the company’s eps0.5% in 202224 90 / 1.06/1.21 yuan (1.12/1.31 yuan in 22 / 23 years before adjustment), using the comparable company valuation method, 28 times the valuation in 22 years, corresponding to the target price of 25.20 yuan, and maintaining the “buy rating”.
Risk tips
The recovery of the epidemic was not as expected; The market and capacity expansion are less than expected; Industry competition intensifies; The price of raw materials has risen.
