\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 882 Shanghai Milkground Food Tech Co.Ltd(600882) )
Event overview
The company released its 2021 annual report, with an annual revenue of 4.48 billion yuan, a year-on-year increase of + 57%; The net profit attributable to the parent company was 154 million yuan, a year-on-year increase of + 161%. Q4 revenue was 1.33 billion yuan, a year-on-year increase of + 37%; The net profit attributable to the parent company is 11.07 million yuan.
Analysis and judgment:
1. Cheese revenue increased rapidly. In 2021, the company’s cheese business achieved a revenue of 3.34 billion yuan, a year-on-year increase of + 61%; In terms of quarterly frequency, Q1-Q4 achieved revenue of 697 / 8.3 / 7.6 / 1.05 billion yuan respectively, with a year-on-year increase of + 157% / + 58% / + 39% / + 44% respectively. Since Q2, the revenue has dropped from more than doubled year-on-year growth to about + 40-60% year-on-year, which is still a period of rapid growth. By product, in 2021, the income of instant nutrition, family dining table and catering industry series products was 2.51/3.5/470 billion yuan respectively, with a year-on-year increase of + 71% / + 6% / + 73% respectively. The products of retail and industrial customers achieved good growth. The family dining table series recovered in 2h21, realizing a year-on-year rapid growth of + 55%. In terms of large single cheese sticks, the output in 2021 was 31200 tons, a year-on-year increase of + 79%. Considering that most of the ready to eat nutrition series are cheese sticks, we judge that the income of cheese sticks in 2021 is close to 2.5 billion yuan.
2. The channel network has achieved faster expansion. By the end of 2021, the number of sales employees was 651, more than doubling. At the end of 2021, there were 5363 dealers, more than double the number at the end of 2020. In terms of the stability of dealer cooperation relationship, the number of dealers eliminated in 2021 / by the end of 2020 is 33%, which is not different from that in 2020. The absolute level of proportion is not low, which is in line with the characteristics of growth stage. From the perspective of average annual sales, the eliminated dealers belong to small and medium-sized dealers in the tail. There are 3606 new dealers, which has exceeded the company’s total number of 2626 by the end of 2020. This is mainly due to Q4’s rapid promotion of investment promotion of normal temperature cheese sticks. We believe that a large number of new dealers in 2021 can ensure the rapid start of normal temperature cheese stick sales in 2022. Correspondingly, the number of terminal outlets reached Shanghai Pudong Development Bank Co.Ltd(600000) at the end of 2021, more than double that at the end of 2020, covering more than 96% of prefecture level cities and more than 85% of county-level cities in China. In 2021, the expansion of sales network was faster than the growth of cheese business revenue, because after the listing of normal temperature cheese sticks in October last year, the company was in the second growth curve ready to go.
Previously, the profitability was weak and in line with the forecast of 2023. The annual net interest rate attributable to the parent company was 3.4%, of which the net interest rate of Q4 was only 0.8%, which was in a state of low profit. In terms of splitting, the gross profit margin performed well, with Q4 gross profit margin of 39.2%, year-on-year + 6.5pcts, month on month + 5pcts, and the annual gross profit margin of + 2.3pcts to 38.2% year-on-year, thanks to product upgrading, scale effect and stable raw material prices. Q4 has a large investment in sales expenses, with an expense rate of 29.4%, a year-on-year increase of + 9.6pcts, a month on month increase of + 4.9pcts, and a year-on-year sales expense rate of + 0.9pct to 25.9%. Among them, the annual advertising and promotion expenses were 910 million yuan, accounting for 20.2% of the revenue, with a large investment. In 2021, the management fee rate was 340 million yuan, with a fee rate of 7.7%, a year-on-year increase of + 2.7 PCTs, of which 130 million yuan was recognized as equity incentive fee, which promoted the rise of management fee rate. The rate of R & D expenses has decreased. The profit and loss of other expenses changed little year-on-year. In 2021, the company failed to achieve a good profit situation due to the company’s increasing cost investment and consolidating brand competitiveness in the intensified industry competition, but the actual profit is within the performance forecast range on January 26, which has been reflected in the stock price.
Investment advice
Throughout 2021, the company’s key business cheese business still showed rapid income growth and gross profit margin improvement, but the cost investment is still large due to industry competition factors. We believe that the share price has digested this part of the bad after the performance forecast on January 26. We still have expectations for the company in 2022, due to the launch of normal temperature cheese sticks and the continuous development of more new products, the expansion momentum of sales network has been reflected by the end of 2021, and more strict cost control is expected. Maintain the revenue forecast of 6.6/8.5 billion yuan in 202223, maintain the forecast of net profit attributable to parent company of 530 million yuan in 2022, reduce the forecast of net profit attributable to parent company of 970 million yuan to 860 million yuan in 2023, increase the forecast of revenue of 10.5 billion yuan in 2024 and the forecast of net profit attributable to parent company of 1.16 billion yuan. From 2022 to 2024, EPS was 1.02/1.66/2.24 yuan, corresponding to the closing price of 36.53 yuan on 2022 / 3 / 24, and P / E was 36 / 22 / 16 times respectively, maintaining the buy rating.
Risk tips
① the sales of new products at normal temperature is less than expected; ② Market competition intensifies risks; ③ Food safety issues.
