\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 305 Jiangsu Hengshun Vinegar-Industry Co.Ltd(600305) )
Event: Jiangsu Hengshun Vinegar-Industry Co.Ltd(600305) issued an announcement on the sale of part of the equity of the subsidiary and related party transactions, and planned to sell 51% equity of Heshun mall to the major shareholder Hengshun Group at the price of 84081200 yuan, and Hengshun Group paid the price in cash; After the completion of this transaction, the company’s shareholding in Hengshun mall will be reduced to 49%.
Highlight the determination of major shareholders to focus on the main business of condiments. Hengshun mall is the non main business asset with the highest proportion of Jiangsu Hengshun Vinegar-Industry Co.Ltd(600305) at present. By the end of 2021, Hengshun mall had total assets of 449 million yuan, net assets of 150 million yuan, annual operating income of 255847 million yuan and net profit of -141479 million yuan; We believe that this equity sale demonstrates the determination of Zhenjiang municipal government, the municipal SASAC and major shareholders to support the company to further focus on the main seasoning industry, which will help to optimize the company’s assets and business structure, revitalize the stock assets, improve asset quality and operation efficiency, and accelerate the pace of high-quality expansion.
Revenue is expected to grow steadily in 2022, and earnings are expected to improve. 1) The performance of the revenue side in 2022 is expected: according to the channel research, the main business of the company’s condiment is in good condition from January to February 2022, and the results of the early marketing reform are gradually reflected. We are optimistic about the performance of the company’s revenue side in the whole year; 2) Price increase transmission is expected to promote the improvement of profitability in 2022: the company has raised the price of some products by 5% – 15% in November 2021, and the smooth transmission of price increase is expected to support the improvement of profitability of the company; 3) In the short term, there is still pressure on the cost, and it is expected that the subsequent decline will contribute to the performance elasticity: the price of glutinous rice has continued to decline since 2020q4, but driven by the rise in the price of packaging materials, the cost of the company is still under pressure in 2021. In the short term, the price of packaging materials has returned to the upward trend since the beginning of 2022, which is offset by the decline in the price of glutinous rice in the early stage. It is expected that the cost in 2022q1 will be; Looking back, we look forward to the decline in the cost of raw materials and packaging materials to contribute to the performance elasticity.
The marketing reform continues to deepen, and the company is optimistic about the long-term growth space. 1) Vinegar is the second largest category of traditional condiments, with scattered patterns and many application scenarios. It still has a large growth space compared with overseas standards; 2) In recent years, the company’s reform has been continuously deepened. On the one hand, it has actively promoted the marketing reform, introduced external talents and market-oriented assessment mechanism, strengthened the promotion of brands and channels, and promoted the national layout according to local conditions. On the other hand, the product side has actively arranged composite condiments while strengthening the existing advantages of basic condiments, which is expected to contribute to the performance increment.
Investment suggestion: considering that the company is currently in the deepening period of marketing and channel reform, and the phased cost investment is increased to lay a long-term growth space, we adjust the previous profit forecast. It is estimated that the company’s operating revenue from 2021 to 2023 will be 1.94/22.3/2.53 billion yuan (the previous value is 1.96/22.4/2.55 billion yuan), a year-on-year increase of – 3.6% / + 14.6% / + 13.7%; The net profit attributable to the parent company was 150 / 270 / 350 million yuan (the previous value was 2.1 / 2.9 / 340 million yuan), a year-on-year increase of – 54.0% / + 82.8% / + 30.4%, corresponding to pe74 / 41 / 31 times, maintaining the “buy” rating.
Risk tip: the industry demand is lower than expected, and the cost of raw materials is higher than expected.
