\u3000\u3 Shengda Resources Co.Ltd(000603) 288 Foshan Haitian Flavouring And Food Company Ltd(603288) )
Event: Foshan Haitian Flavouring And Food Company Ltd(603288) released the annual report of 2021, and the company realized an operating revenue of 25 billion yuan in 2021, with a year-on-year increase of 9.7%; The net profit attributable to the parent company was 6.67 billion yuan, a year-on-year increase of 4.2%. Q4 achieved an operating revenue of 7.01 billion yuan in a single quarter, a year-on-year increase of 22.9%; The net profit attributable to the parent company was 1.96 billion yuan, a year-on-year increase of 7.2%.
The pre preparation of goods for the Spring Festival contributed to Q4 performance and basically achieved double-digit growth throughout the year. By category, the revenue of soy sauce / oyster sauce / seasoning sauce in 2021 was 14.19/45.3/2.67 billion yuan respectively, with a year-on-year increase of + 8.8% / + 10.2% / + 5.6% respectively. In terms of volume and price separation, the annual sales volume of soy sauce / oyster sauce / seasoning sauce was + 8.4% / + 11.5% / + 5.2% respectively year-on-year; The revenue of soy sauce / oyster sauce / seasoning sauce in Q4 in a single quarter was + 20.8% / + 21.3% / + 13.6% year-on-year respectively, and the growth rate was significantly higher than that in Q3. We believe that it is mainly because the dealers prepared goods in advance before the time point of the spring Festival. At the same time, the price increase on October 25 also contributed to it. The high growth of Q4 supported the double-digit growth recorded in the whole year. By channel, the offline / online revenue in 2021 was 22.89 billion yuan / 700 million yuan respectively, with a year-on-year increase of + 7.7% / 85.2%. The online growth rate was bright. We judged that it may be the rapid growth of community group buying, the high cost performance of products, and the strengthening of brand effect. Haitian has a strong competitive advantage in group buying channel. By region, the revenue of the Eastern / Southern / central / northern / western regions in 2021 will be + 7.5% / + 8.4% / + 14.0% / + 6.7% / + 9.3% respectively year-on-year, and coordinated development will be achieved among regions; At the end of the year, there were 7430 dealers, a net increase of 379 compared with the end of 2020, and the number of dealers in all regions showed a net increase.
The cost goes up, the profit is under pressure, and the rate goes down slightly. At the gross profit end, the gross profit margin in 2021 was 38.7%, with a year-on-year increase of -3.5pct. The high price of raw materials was the main suppression factor of the gross profit margin. Represented by soybeans, wheat and packaging materials, soy sauce / sauce was significantly affected, and the cost of single ton of direct materials was + 10.9% / 11.3% year-on-year respectively. On the expense side, the sales / management / R & D / financial expense ratio in 2021 was 5.4% / 1.6% / 3.1% / – 2.3% respectively, with a year-on-year increase of -0.6pct / – 0.01pct / – 0.04pct / – 0.6pct respectively. The expense ratio decreased to varying degrees, or because the company actively alleviated some external cost pressures through the improvement of business model and the optimization of cost investment efficiency. On the profit side, the net profit margin of sales in 2021 was 26.7%, with a year-on-year rate of -1.4pct, narrower than the gross profit margin gap (a year-on-year rate of -3.5pct). Due to the change of accounting standards, the year-on-year comparability of Q4 single quarter gross profit margin and expense rate is poor, so it is not analyzed.
Raise prices and hedge costs, and watch for recovery under the epidemic. Looking forward to 2022, Brazil’s soybean production will be reduced due to climate reasons, and the contraction of global soybean supply will support the high price. With the superposition of the conflict between Russia and Ukraine, the prices of wheat, corn, soybean and other Shenzhen Agricultural Products Group Co.Ltd(000061) and aluminum packaging materials will rise, and the cost side pressure is still on. Recently, the epidemic situation has been repeated, and the restrictions of China’s epidemic prevention policy still have an impact on the demand for condiments and catering and residents’ consumption. Under the double pressure of demand and cost, we judge that the company will show a weak recovery trend in 2022. Mainly due to (1) the smooth transmission of Haitian price increase, which can effectively hedge costs; (2) Haitian focuses on the layout of C-end under the epidemic, and its performance is still stable. After the epidemic slows down and catering recovers, BC resonance will bring greater flexibility; (3) The impact of community group buying is weakened, and Haitian also has advantages in group buying itself. It is difficult to reproduce the impact of new channels similar to community group buying. In the long run, cost reduction and epidemic repair are also the general trend.
Investment suggestion: in the short and medium term, the recovery of the industry will continue, and the company will take the lead in raising the price. The recovery trend will continue in 2022. When the cost drops in 2023, the price will enjoy profit thickening; In the long run, the company has solid fundamentals, significant competitive advantages, broad growth space and unchanged core logic. Referring to the business plan of the annual report, the operating revenue / profit target of the company in 2022 is 28.0/7.47 billion yuan respectively, and the corresponding revenue / profit yoy is 12% / 12% respectively; Combined with the annual report performance in 2021, we revised the profit forecast. It is estimated that the company will realize an operating revenue of 28.04/32.0/35.43 billion yuan from 2022 to 2024, with a year-on-year increase of 12.2% / 14.1% / 10.7%, and a net profit attributable to the parent company of 74.6/88.1/10.26 billion yuan, with a year-on-year increase of 11.8% / 18.1% / 16.5%, with corresponding EPS of 1.77/2.09/2.44 yuan and PE of 50.8/43.0/36.9x respectively. As the leader of national condiment, the company has stable performance, high growth ceiling and maintains the rating of “overweight”.
Risk warning: the price of raw materials is rising; Weak demand under the influence of the epidemic; Increased cost investment
