\u3000\u3 Shengda Resources Co.Ltd(000603) 288 Foshan Haitian Flavouring And Food Company Ltd(603288) )
Event: the company released the annual report. In 2021, the company realized revenue / net profit attributable to parent company / deduction of net profit not attributable to parent company of RMB 25.04/66.71/6.430 billion, with a year-on-year increase of 9.71% / 4.18% / 4.09%, of which 21q4 realized revenue / net profit attributable to parent company / deduction of net profit not attributable to parent company of RMB 7.010/19.63/1.849 billion, with a year-on-year increase of 22.85% / 7.19% / 4.02%. Both revenue and profit are in line with expectations.
During the period of industry adjustment, the industry achieved growth against the trend, and the core barriers were further reflected. By product, the revenue of soy sauce / oyster sauce / seasoning sauce / other categories reached 141.88/45.3226662211 billion yuan respectively, with a year-on-year increase of + 8.78% / 10.18% / 5.61% / 13.37%. The core categories maintained steady growth. Vinegar and cooking wine in other categories have begun to take shape and are expected to contribute a new growth curve to the company. 21q4’s revenue increased by 22.85%, mainly due to the Early Spring Festival + price increase, which promoted dealers to prepare goods in advance, resulting in a rapid growth in revenue. Revenue by category was + 20.8% / 21.3% / 13.6% / 23.1% year-on-year, with an increase of more than 20% except for seasoning sauce, with sufficient momentum. In terms of subregions, the North / South / East / central / West achieved revenue of RMB 6.056/44.70/48.18/53.092944 billion respectively, with a year-on-year increase of + 6.7% / 8.4% / 7.5% / 14.0% / 9.3%. The company achieved steady growth in regional revenue by deepening the reform of marketing manpower. In the period of collective pressure on the condiment industry, in view of the excellent cost control ability of the leader, the industry concentration is expected to increase. Haitian bucked the trend to achieve rapid growth, and the core competitive barriers were further reflected.
Rising costs put pressure on profits, and the efficiency of fee investment has been increasing. In 2021, the gross profit margin was 38.66%, with a year-on-year increase of -3.51pct, mainly due to the continuous rise in the prices of raw materials such as soybean / soybean meal / packaging materials and the year-on-year increase in the cost of soy sauce direct materials by + 20.29%, which put pressure on the profit. The sales expense rate was 5.43%, with a year-on-year increase of -0.56pct. Relying on the existing brand reputation, the company continued to improve the efficiency of sales expense investment. The management / financial expense ratio was -0.01 / -0.62pct year-on-year, resulting in a net interest rate of 26.68% and -1.41pct year-on-year. The gross profit margin of 21q4 was 38.13%, year-on-year -3.73pct, and the sales / management / financial expense rate was 4.30% / 1.57% / – 2.50%, resulting in a net profit margin of 28.01%, year-on-year -4.09pct.
The target for 2022 is stable and further opens up market space. According to the disclosure of the annual report, the company’s planned revenue target in 2022 is 28 billion yuan, a year-on-year increase of + 12.0%, and the profit target is 7.47 billion yuan, a year-on-year increase of + 12.2%. The overall target is relatively stable and achieves double-digit growth. Considering that the cost of raw materials in the condiment industry is still high, we think that the company is expected to continue to reduce costs and increase efficiency on the basis of raising prices in 2022. In order to speed up the innovation of channel / product / terminal construction, we should further expand the market increment space, achieve the high quality development of the market, and bring the whole sector back to healthy growth.
Investment suggestion: we expect the company’s revenue from 2022 to 2024 to be 28.082/32.52/36.344 billion yuan respectively, and net profit to be 74.72/85.12/10.039 billion yuan respectively. We maintain the investment rating of Buy-A, and the six-month target price is 106.43 yuan, which is equivalent to the dynamic P / E ratio of 60x in 2022.
Risk tip: the macroeconomic growth rate is lower than expected, food safety and epidemic situation repeatedly affect demand.
