\u3000\u3 Shengda Resources Co.Ltd(000603) 288 Foshan Haitian Flavouring And Food Company Ltd(603288) )
Event description
In 2021, the company achieved an operating revenue of 25.004 billion yuan, a year-on-year increase of 9.71%; The net profit attributable to shareholders of listed companies was 6.671 billion yuan, a year-on-year increase of 4.18%.
Event comments
Steadily rising against the trend. In 2021, the company achieved an operating revenue of 25.004 billion yuan, a year-on-year increase of 9.71%; The net profit attributable to the parent company was 6.671 billion yuan, with a year-on-year increase of 4.18%, of which the single Q4 operating revenue was 7.010 billion yuan, with a year-on-year increase of 22.85%, and the net profit attributable to the parent company was 1.963 billion yuan, with a year-on-year increase of 7.19%. Specifically: 1) in terms of products, the company’s operating revenue of soy sauce / oyster sauce / seasoning sauce / other categories in 2021 was 141.88/45.32/26.662211 billion yuan respectively, with a year-on-year increase of + 8.78% / 10.18% / 5.61% / 13.37%. The three core categories grew steadily, among which vinegar, cooking wine and other products have begun to take shape. The accelerated development of new categories will further expand the company’s competition and leading edge and maintain strong development momentum and vitality. 2) From a regional perspective, 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 revenue of all regions increased steadily, and the central and Western markets continued to maintain a leading growth rate. 3) In terms of sub channels, offline / online channels achieved revenue of 22.892 billion / 704 million respectively, with a year-on-year increase of 7.73% / 85.2%. While ensuring the stable development of offline channels, the company accelerated the layout of online business, and the proportion of online revenue continued to increase.
The purchase cost increased and the net interest rate decreased. The net profit margin of the company’s sales in 2021 was 26.68%, a year-on-year decrease of 1.44pct. Specifically, 1) in 2021, the gross profit margin was 38.66%, a year-on-year decrease of 3.51 PCT, of which the direct materials increased by 18.17% year-on-year; 2) The company takes various measures to tap potential and increase efficiency, and digest the adverse effects of various cost increases. During the sales period, the expense ratio of the company was 7.75%, with a year-on-year decrease of 1.23pct, of which the sales expense ratio was 5.43%, with a year-on-year decrease of 0.56pct; The management expense ratio was 4.66%, with a year-on-year decrease of 0.05pct; The financial expense ratio was 3.09%, a year-on-year decrease of 0.03pct.
The target for 2022 is stable, reducing costs and increasing efficiency in an all-round way. According to the annual report, the company’s planned revenue target in 2022 is RMB 28 billion, a year-on-year increase of + 12.0%, and the profit target is RMB 7.47 billion, a year-on-year increase of + 12.2%. In the short term, the bulk raw materials are still at a high level and the cost pressure is still high. In 2022, the company will continue to tap the potential and increase efficiency, make full use of the scale advantages, category advantages and channel advantages accumulated by Haitian, accelerate the market transformation and development and seize opportunities, realize the coordinated development of Wuxi Online Offline Communication Information Technology Co.Ltd(300959) , multi-channel and multi category, further open the incremental space of the market and realize the high-quality development of the market. In the medium and long term, Haitian still enjoys its position in the industry, while accelerating business fission and new business development to promote sustainable development.
Investment advice
Covid-19 epidemic, weak consumer demand, rising prices of various raw materials, vicious competition in community group purchase, tight supply caused by power and production restriction, etc., led to the decline of the prosperity of the condiment industry. In 2021, the company achieved the growth of operating revenue, and its competitiveness was steadily improved in the adverse trend. In the short term, the pressure on the cost of raw materials is still large. On the basis of price increase, the company reduced costs and increased efficiency in an all-round way to ensure the double-digit growth of 2022 performance. Considering the continuous upward cost, we lowered the company’s EPS from 2021 to 2023 to 1.58/1.79/2.11 yuan. Corresponding to the current stock price, the PE from 2021 to 2023 was 50x / 43x / 36x respectively, and lowered the “overweight” rating.
There are risks
Industry demand is lower than expected, raw material price fluctuation risk, food safety risk and industry prosperity decline risk
