\u3000\u3 Shengda Resources Co.Ltd(000603) 288 Foshan Haitian Flavouring And Food Company Ltd(603288) )
The price increase effect appears + dealers purchase goods intensively, and Q4 revenue increases brightly. In 2021, the company realized revenue of 25 billion yuan (+ 9.7%); The net profit attributable to the parent company was 6.67 billion yuan (+ 4.2%), of which 21q4 income was 7.01 billion yuan (+ 22.9%); The net profit attributable to the parent company was 1.96 billion yuan (+ 7.2%), and the growth rate of revenue / profit in Q4 increased by 19.7/4.6pct respectively compared with Q3. The obvious month on month increase in income growth is mainly due to: 1) the impact of emerging channels such as community group purchase on dynamic sales is gradually eliminated; 2) The company raised the ex factory price of most products in 21q4, with a range of 3% – 7%, contributing to some growth; 3) Dealers purchase goods intensively and prepare goods in advance during the Spring Festival.
New categories have maintained high growth, and remarkable results have been achieved in strengthening cooperation in new retail channels. In terms of categories, the revenue growth of the company’s three core categories of soy sauce / oyster sauce / seasoning sauce in 21 years was 8.8% / 10.2% / 5.6% respectively. Under the background of weak overall demand of the industry, it still achieved steady growth and increased its share against the trend; The revenue of vinegar, cooking wine and other categories increased by 16.3%, and the growth rate continued to be bright. In terms of channels, the company’s online revenue increased by + 85.2% year-on-year, and the proportion of revenue increased by 1.2pct to 3.0%, of which Q4 increased by + 186% year-on-year, mainly because 21h2 company strengthened the layout of new retail channels, including community group purchase, and achieved significant volume while in-depth cooperation with major e-commerce and group purchase platforms. In terms of subregions, the Eastern / Southern / central / northern / western regions were + 7.5% / 8.4% / 14.0% / 6.7% / 9.3% year-on-year respectively, and the central and Western markets continued to maintain rapid growth.
High costs put pressure on the company’s profitability. The gross profit margin of the company decreased by 3.5pct to 38.7% in 21 years, mainly due to the sharp rise in the price of raw materials. The price of direct materials per ton of soy sauce / oyster sauce / seasoning sauce was + 10.9% / 0.6% / 11.3% year-on-year, and the gross profit margin was – 4.5/0.8/4.4pct year-on-year respectively. In 21 years, the company’s sales / management / R & D expense ratio was -0.6 / – 0.01 / – 0.03pct year-on-year respectively, and the expense ratio decreased. In 21 years, the company’s net profit margin fell by 1.4pct to 26.7%, of which Q4 was – 4.1pct year-on-year, mainly affected by the decline of gross profit margin.
Cost reduction and efficiency increase help increase the share, and the leading condiment industry is stable and far-reaching. In 21 years, against the background of weak overall demand of the industry, Haitian still achieved steady growth, reflecting the company’s strong business resilience. At present, the transmission of the company’s price increase has been basically completed, but the epidemic hinders the recovery of demand and the continuous rise of costs, and the company’s operating pressure is still on. Therefore, the company’s growth target for operating revenue and net profit in 22 years is 12%. At the same time, the company will continue to further improve its share by accelerating market transformation, reducing cost and increasing efficiency, strengthening R & D and promotion.
Risk tips: the price of raw materials has risen sharply, industry competition has intensified, and the recovery of the epidemic is not as expected.
Investment suggestion: with significant competitive advantage, wait for the inflection point of demand and cost, and maintain the “buy” rating.
Taking into account the repeated disturbance of the epidemic this year and the further rise in costs in the near future, we lowered our previous profit forecast and expected the net profit attributable to the parent company to be 7.50/96.0/11.52 billion yuan from 2022 to 2024 (the previous forecast was 8.42/10.5/11.74 billion yuan), a year-on-year increase of 12% / 28% / 20%; The corresponding PE of the current stock price is 56 / 43 / 36x respectively. We believe that Haitian’s short-term operation is under pressure due to the disturbance of the epidemic and rising costs, but the company’s competitive advantage is still prominent, the medium and long-term share promotion trend is determined, and the “buy” rating is maintained.
