\u3000\u30 Shaanxi Zhongtian Rocket Technology Co.Ltd(003009) 99 Yihai Kerry Arawana Holdings Co.Ltd(300999) )
Events
On the evening of March 23, 2022, the company released its 2021 annual report: in 2021, the company achieved a revenue of 226225 billion yuan (year-on-year + 16.06%), a net profit attributable to the parent company of 4.132 billion yuan (year-on-year – 31.15%), and a net profit not attributable to the parent company of 4.996 billion yuan (year-on-year – 43.17%); In 2021q4, the revenue was 63.5 billion yuan (year-on-year + 15.61%), the net profit attributable to the parent was 451 million yuan (year-on-year – 50.55%), and the net profit not attributable to the parent was 839 million yuan (year-on-year – 66.84%).
Key investment points
Revenue grew steadily, and the rise in raw material costs led to a decline in profits
In 2021q4, the revenue maintained a high growth rate, and the net profit fell year-on-year, mainly due to the pressure on the profit caused by the rise in the price of raw materials, the company raised the price of some products, but it has not been fully covered, the decline of soybean procurement and crushing volume and the loss of soybean hedging business. In 2021, the company’s gross profit margin was 8.18%, with a year-on-year rate of -4.15pct, and 2021q4’s gross profit margin was 6.70% (with a year-on-year rate of -6.23pct), which was mainly due to the rise in the cost of raw materials, the increase in the sales proportion of catering channels with low gross profit margin and the sales of medium and high-end products. In 2021, the ratio of sales expense / administrative expense / financial expense was 2.93% / 1.62% / 0.11%, with a year-on-year decrease of -1.42 / + 0.07 / + 0.54pct. The decline of sales expense ratio was mainly due to the adjustment of freight to cost, the ratio of administrative expense remained basically unchanged, and the increase of financial expense ratio was mainly due to the decrease of interest income. The net interest rate in 2021 was 1.98%, with a year-on-year rate of -1.39pct, of which the net interest rate in 2021q4 was 0.73% (with a year-on-year rate of -1.31pct), mainly due to the decline of gross profit margin.
Affected by the demand, the sales volume declined slightly, and the price rise was the main driving force
By product, kitchen food / feed raw materials and oil technology / other revenue was 141979/82.515/1.732 billion yuan, a year-on-year increase of + 17.14% / + 13.83% / + 40.92%. In terms of component price, the total sales volume in 2021 was 43.5 million tons, with a year-on-year increase of – 3.70%, and the corresponding ton price was 5161 yuan / ton, with a year-on-year increase of + 20.36%. The sales of kitchen food / feed raw materials and oil technology were 2065.62284400 tons, with a year-on-year increase of + 3.25% / – 9.23%, and the ton price was 6873 / 3612 yuan, with a year-on-year increase of + 13.45% / + 25.41%. The sales volume decreased slightly due to the impact of demand, and the price rise promoted the growth of revenue. By region, the domestic / overseas revenue reached 221323/4.902 billion yuan, a year-on-year increase of + 15.82% / + 27.90%. In 2021, there will be a net increase of 1024 to 6121 dealers.
Develop multiple businesses at the same time, and layout central kitchen and condiment projects
Looking forward to 2022, with the continuation of the recovery trend of consumption and the simultaneous development of multiple businesses of the company, the profit side is expected to improve. The main layout of the company in 2022 is as follows:
1) continuously develop new products, research and develop according to the needs of different groups, and adhere to the promotion of high-end products. Vigorously promote new high growth and complementary businesses such as soy sauce, yeast, vegetable meat and zero trans fatty acid oil.
2) comprehensively arrange the central kitchen business and build a central kitchen park across the country through the central kitchen food business department and taking advantage of the grain, oil and food industry chain. At present, the construction of central kitchen projects in Chongqing, Langfang and Xi’an is accelerated and will be put into operation in 2022. Fengchu Hangzhou is expected to produce products in March, mainly including prefabricated dishes.
3) the condiment project is progressing well, in which soy sauce uses dual brands and dual strategies. The completion of Taizhou Wanzhuang soy sauce phase II project will double the production capacity, and Yangjiang, Guangdong is preparing to build a factory. Condiment is expected to become a new point of the company’s performance and improve the profit margin.
Profit forecast
We are optimistic that the company will continue to deepen its original business, and the central kitchen and condiment project will become the new point of the company’s performance. We expect that the EPS from 2022 to 2024 will be 1.30/1.58/1.91 yuan, and the current share price corresponding to PE will be 39, 32 and 26 times respectively. It will be covered for the first time and given a “recommended” investment rating.
Risk tips
Macroeconomic fluctuation risk, industrial policy change risk, epidemic drag consumption risk, downstream demand fluctuation risk, raw material price fluctuation risk, food safety and quality control risk, etc.
