\u3000\u3 Shengda Resources Co.Ltd(000603) 288 Foshan Haitian Flavouring And Food Company Ltd(603288) )
Event: the company released its annual report for 2021. In 2021, it realized an operating revenue of 25.004 billion yuan, a year-on-year increase of + 9.71%, a net profit attributable to the parent company of 6.671 billion yuan, a year-on-year increase of + 4.18%, and a net profit not attributable to the parent company of 6.430 billion yuan, a year-on-year increase of + 4.09%. Among them, 21q4 achieved an operating revenue of RMB 7.010 billion, a year-on-year increase of + 22.85%, and the net profit attributable to the parent company was RMB 1.963 billion, a year-on-year increase of + 7.19%, deducting the net profit not attributable to the parent company of RMB 1.849 billion, a year-on-year increase of + 4.02%.
Comments:
21q4 revenue growth significantly improved month on month, performing better than expected. 21q4’s revenue increased by 22.8%, up 19.7 percentage points from the third quarter. We expect that due to the company’s acceleration of the layout of new retail channels and product price increase, dealers will prepare goods. In terms of products, 21q4 soy sauce / seasoning sauce / oyster sauce increased by 20.8% / 13.6% / 21.3% respectively, and the details of revenue growth of various categories improved month on month. In terms of channels, the revenue growth of 21q4 online and offline channels was 186.2% / 17.1% respectively. The high growth of online channels was mainly due to the company’s active layout and development of new retail channels and the strengthening of in-depth cooperation with community group purchase, Shida home platform and e-commerce of major platforms. 21q4 Eastern / Southern / central / northern / western regions increased by 20.3% / 21.0% / 30.5% / 12.1% / 19.1% respectively. Among them, the revenue performance of the northern region is poor, which is expected to be caused by the adjustment of dealers. By the end of 2021, the number of distributors of the company had reached 7430. The number of 21q4 dealers increased by 27 compared with the third quarter, reversing the downward trend of 21q3.
Affected by raw materials and power and production restrictions, there is still pressure on the profit side of 21q4. The gross profit margin of 21q4 was 38.1%, up 0.2 percentage points from 21q3. The gross sales difference in 21q4 was 31.2%, up 2.6 percentage points from 21q3, but down 8.7 percentage points year-on-year. The company raised the price of most of its products from October 25, 2021, which contributed to the gross profit margin of 21q4. However, due to the rising prices of raw materials such as soybeans and the impact of power and production restrictions, there is still pressure on the cost side of the company, so the improvement of gross profit margin is not obvious. In the past 21 years, the company’s R & D investment increased by 8.45% year-on-year. The company has not stopped in tackling key problems of core technology. The net interest rate of non parent company deduction in 21q4 was 26.4%, improved by 2.9 percentage points month on month compared with 21q3, but still decreased by 4.8 percentage points year-on-year.
In the past 22 years, the company set relatively stable goals. In 2022, the company plans to achieve an operating revenue target of 28 billion yuan and a profit target of 7.47 billion yuan, that is, it plans to achieve a year-on-year increase in revenue / profit of about 12% / 12% respectively. In the face of the complex environment in the post epidemic era, the company’s objectives are relatively stable. At present, catering channels are still affected by the epidemic, but the company actively expands C-end and online channels, speeds up market transformation and development, and grabs the increment from the stock.
Profit forecast and investment rating: looking forward to 2022, the price increase effect of the company’s products will be further reflected. At the same time, internal measures to reduce costs and increase efficiency will help alleviate the pressure of rising costs. We believe that Haitian has the strongest scale advantage in the industry. At the same time, the products are sticky and the consumer loyalty is high. Although Haitian was impacted by the external environment in 2021, the company’s core competitiveness remained unchanged. It is estimated that the company’s EPS in 22-24 years will be 1.79/2.14/2.47 yuan respectively, and the corresponding PE will be 50.18/41.97/36.49 times respectively, maintaining the “buy” rating.
Risk factors: the price rise of raw materials is higher than expected; Industry competition intensifies; The promotion of new products was less than expected.
