\u3000\u3 Shengda Resources Co.Ltd(000603) 288 Foshan Haitian Flavouring And Food Company Ltd(603288) )
Events
On the evening of March 24, 2022, the company released its 2021 annual report: in 2021, the company achieved a revenue of 25.004 billion yuan (year-on-year + 9.71%), a net profit attributable to the parent company of 6.671 billion yuan (year-on-year + 4.18%), and a net profit not attributable to the parent company of 6.43 billion yuan (year-on-year + 4.09%); In 2021q4, the revenue was 7.010 billion yuan (year-on-year + 22.85%), the net profit attributable to the parent was 1.963 billion yuan (year-on-year + 7.19%), and the net profit not attributable to the parent was 1.849 billion yuan (year-on-year + 4.02%).
Key investment points
The fourth quarter was improved month on month, and the price was raised in the fourth quarter to cope with the rising cost
The growth rate of revenue and net profit in 2021q4 has increased, which is expected to be mainly due to the price increase of the company. In 2021, the company’s gross profit margin was 38.66%, year-on-year -3.51pct, and 2021q4 gross profit margin was 38.13% (year-on-year -3.71pct), mainly due to the rise of raw material costs. The ratio of sales expense / administrative expense / financial expense in 2021 was 5.43% / 4.66% / – 2.34%, with a year-on-year increase of -0.56 / – 0.45 / – 0.61pct. The decline of sales expense ratio was mainly due to strengthening expense control and reducing advertising. The decline of administrative expense ratio was mainly due to the high base of last year, the decline of financial expense ratio and the increase of interest income. The net interest rate in 2021 was 26.68%, with a year-on-year rate of -1.44pct, of which the net interest rate in 2021q4 was 27.99% (with a year-on-year rate of -4.12pct), mainly due to the decline of gross profit margin.
Core categories grew steadily, with volume growth as the main driving force
By product, the revenue of soy sauce / oyster sauce / sauce / other categories was 141.88/45.32/26.662211 billion yuan, a year-on-year increase of + 8.78% / + 10.18% / + 5.61% / + 13.37%. In 2021q4, the revenue of soy sauce / oyster sauce / sauce was 4.005/13.40/657 billion yuan, a year-on-year increase of + 20.78% / + 21.32% / + 13.58%. The three core categories grew steadily, and new categories developed at an accelerated pace. Among them, vinegar, cooking wine and other products have begun to take shape.
In terms of component price, the total sales volume of the three core products in 2021 was 3.9312 million tons, with a year-on-year increase of + 9.90%, and the corresponding ton price was 5440 yuan / ton, with a year-on-year increase of – 0.21%. The sales volume of soy sauce / oil consumption / sauce was 266.03/96.14309600 tons, with a year-on-year increase of + 8.44% / + 11.46% / + 5.19%, and the ton price was 5333 / 4714 / 8612 yuan / ton, with a year-on-year increase of + 0.31% / – 1.15% / + 0.40%. The average price was basically the same, and the sales volume increased steadily, which was the main driving force.
In terms of regions, the Eastern / Southern / central / northern / western regions achieved a revenue of RMB 4.818/44.70/53.09/60.562944 billion, a year-on-year increase of + 7.47% / + 8.40% / + 14.03% / + 6.69% / + 9.34%. Among them, 2021q4 sold 1.372/13.06/14.71/16.20/768 billion yuan respectively, a year-on-year increase of + 20.27% / + 20.97% / + 30.49% / + 12.10% / + 19.75%.
Offline / online revenue reached 22.892704 billion yuan, a year-on-year increase of + 7.73% / + 85.20%, accounting for 97.02% / 2.98%. In 2021q4, the revenue was 6.243295 billion yuan respectively, with a year-on-year increase of + 17.11% / + 186.18%, and the volume of e-commerce channels increased. In 2021, there was a net increase of 379 to 7430 dealers.
Product expansion + channel breakthrough + capacity release, steady growth can be expected
In 2022, the company’s planned operating revenue target is 28 billion yuan, a year-on-year increase of + 12%, and the profit target is 7.47 billion yuan, a year-on-year increase of + 12%. The layout is mainly from the following aspects:
Product side: expand the leading advantages of the three core categories of soy sauce, oyster sauce and sauce, and accelerate the development of new products such as vinegar, cooking wine and compound condiments.
Channel side: accelerate the innovation in the construction of channels, products and terminals, accelerate the substantive breakthrough in new retail, key customers and other channels, and realize the coordinated development of Wuxi Online Offline Communication Information Technology Co.Ltd(300959) , multi-channel.
Capacity side: the multi base capacity layout has been accelerated. The annual capacity of soy sauce and sauce in Gaoming base has increased by 300000 tons, and the annual capacity of oyster sauce and vinegar in Suqian base has increased by 200000 tons. The capacity of the new base will be gradually released in 2022, providing capacity guarantee.
Profit forecast
We are optimistic about the long-term development of the company. Considering that the price increase is underground, the profit elasticity is prominent, and new categories such as fermented bean curd and compound seasoning expand new growth points, it is expected to achieve steady growth in 2022. We expect that the EPS from 2022 to 2024 will be 1.81/2.07/2.36 yuan, and the current share price corresponding to PE will be 50, 43 and 38 times respectively. It will be covered for the first time and given a “recommended” investment rating.
Risk tips
Macroeconomic downside risks, consumption dragged down by the epidemic, intensified industry competition, capacity construction or utilization less than expected, price increase less than expected, etc.
