\u3000\u3 Shengda Resources Co.Ltd(000603) 288 Foshan Haitian Flavouring And Food Company Ltd(603288) )
Event: the company released its 2021 annual report. In 2021, it realized an operating revenue of 25 billion yuan, a year-on-year increase of + 9.7%, and a net profit attributable to the parent company of 6.67 billion yuan, a year-on-year increase of + 4.2%; In 2021q4, the operating revenue was 7.01 billion yuan, a year-on-year increase of + 22.9%, and the net profit attributable to the parent company was 1.96 billion yuan, a year-on-year increase of + 7.2%.
With the increase of demand and channel readiness, 2021q4 has improved significantly. The revenue growth rate of 2021q1-q4 was + 21.7% / – 9.4% / + 3.1% / + 22.9% respectively. With the recovery of industry demand since 2021h2, the company actively embraces emerging channels and stimulates dealers to stock goods under the expectation of q3-q4 price increase, the revenue has improved significantly quarter by quarter; 1) By category, 2021q4 soy sauce / seasoning sauce / oyster sauce were + 20.8% / + 13.6% / + 21.3% year-on-year respectively; 2) In terms of channels, offline / online revenue in 2021q4 was + 17.1% / + 186.2% year-on-year respectively, and online revenue accounted for 3.0% in 2021, with a year-on-year increase of + 1.2pct; 3) In terms of subregions, the East / South / central / North / West of 2021q4 are + 20.3% / + 21.0% / + 30.5% / + 12.1% / + 19.8% year-on-year respectively; 4) By the end of 2021, there were 7430 dealers, a net increase of 379 compared with the end of last year, and the channels continued to sink.
Short term cost pressure will still drag down profit margin performance. Dragged down by the rise in the price of raw materials and packaging materials, the gross profit margin / gross sales difference / net profit margin in 2021 were 38.7% / 33.2% / 26.7% respectively, with a year-on-year increase of -3.5pct / – 3.0pct / – 1.4pct; 2021q4 gross profit margin / gross sales difference / net profit margin were 38.1% / 33.8% / 28.0% respectively, with a year-on-year increase of -3.7pct / – 8.6pct / – 4.1pct; Looking forward to the future, 1) the price of raw materials and packaging materials in the short term is still high and upward. We calculate that the cost of 2022q1 company has a year-on-year double-digit increase, and the cost pressure is still large; 2) In October 2021, the company took the lead in raising the price of some products by 3% – 7%. At present, the favorable price has been basically completed, and it is expected to hedge some costs upward; Overall, there will still be some pressure on the profit margin in the next 1-2 quarters.
It is expected to increase steadily under the high base of 2022q1, and it is optimistic that the annual revenue target will be achieved. 1) In the short term, since the beginning of 2022, the dynamic sales have improved year-on-year, and the inventory tends to be benign. Under the high base, the revenue of 2022q1 is expected to grow steadily. Dragged down by the profit margin, the performance end is expected to grow in the median single digit; 2) Looking forward to the whole year of 2022, the company’s 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%. We are optimistic about the achievement of the business target due to the contribution of price increase, the recovery of channel enthusiasm and the recovery of catering consumption.
Investment advice. We adjusted the profit forecast for 20222023 according to the annual report and introduced the forecast for 2024. It is estimated that the operating revenue in 20222024 will be 28.30/323.4/37.74 billion yuan (28.58/32.67 billion yuan before 20222023), a year-on-year increase of + 13.2% / + 14.3% / + 16.7%, and the net profit attributable to the parent company will be 75.5/89.6/10.75 billion yuan (8.36/9.68 billion yuan before 20222023), a year-on-year increase of + 13.1% / + 18.8% / + 19.9%. The current stock price corresponds to pe50 / 42 / 35 times, maintaining the “buy” rating.
Risk tip: the recovery of industry demand is less than expected, the industry competition is intensified, and the cost is higher than expected.
