\u3000\u3 Shengda Resources Co.Ltd(000603) 288 Foshan Haitian Flavouring And Food Company Ltd(603288) )
Event:
The company released the annual report of 2021. During the reporting period, the company achieved a revenue of 25.004 billion yuan, a year-on-year increase of + 9.71%, and a net profit attributable to the parent company of 6.671 billion yuan, a year-on-year increase of + 4.18%. After deducting the net profit not attributable to the parent company of 6.430 billion yuan, a year-on-year increase of + 4.09%, the basic EPS was 1.58 yuan, and the company’s performance basically met the previous expectations.
Comments:
Affected by multiple pressures, the company’s revenue continued to perform steadily
The company’s annual revenue grew steadily, with a revenue of 7.01 billion yuan in Q4 alone, a year-on-year increase of + 22.86%, mainly due to the company’s price increase in October, the recovery of terminal demand, the gradual decline of the impact of community group purchase and other factors. By category, the annual revenue of soy sauce / oyster sauce / sauce was 14.188/45.31/2.666 billion yuan, a year-on-year increase of + 9% / 10% / 6%. Under the downturn of terminal demand, soy sauce and oyster sauce maintained steady growth. In terms of regions, the East / South / middle / North / West are + 7% / 8% / 14% / 7% / 9% respectively, and the performance of the central region is outstanding. On the channel side, while maintaining the steady progress of traditional channels, the company continued to make efforts online, with an annual online revenue of 704 million yuan, a year-on-year increase of + 85%; At the end of 2021, there were 7430 offline distributors, with a year-on-year increase of + 379.
The cost pressure is still on, which inhibits the improvement of profitability in the short term
The gross profit margin of the company’s main business in 2021 was 39.78%, with a year-on-year increase of – 3.73 percentage points. The gross profit margin of soy sauce / oyster sauce / sauce was -4.47 / – 0.75 / – 4.68 percentage points respectively. The decline in gross profit margin was mainly due to the upward purchase cost of core raw materials such as soybeans. On the expense side, the company’s sales expense ratio was -0.56 percentage points year-on-year. Under the pressure of the cost side, the downward pressure on the net interest rate was alleviated through internal cost reduction.
Core categories grew steadily, and new categories opened up incremental space
In the short term, the company still faces the dual pressure of rising costs and slow demand recovery. It is expected that the year-on-year growth of revenue in 2022 is expected to rise to the low double digits with the promotion of high-end products and the fading impact of community group buying at the channel end. In the long run, while ensuring the steady expansion of the market share of the three core categories, the company is expected to realize the transformation from condiment enterprises to platform integrated kitchen enterprises and open up new growth space by cutting into new businesses such as grain, oil and rice noodles, hot pot seasoning and central kitchen in the future.
Investment advice
It is estimated that the company’s EPS from 2022 to 2024 will be 1.78/2.05/2.37 yuan respectively, corresponding to 50 / 43 / 37 times of the current share price PE. As the leader of condiment, the company has stronger anti risk ability under the influence of cost pressure in the industry. At present, the average PE of Shenwan condiment industry in 2022 is 45 times, and the historical center of the company is 68 times. The company is given a PE valuation of 55 times in 2022, corresponding to the target price of 97.9 yuan, maintaining the “overweight” rating.
Risk tips
The epidemic repeatedly affects the terminal demand, the incubation of new products is less than expected, and the cost of raw materials such as soybeans is at risk of rising
