\u3000\u3 Shengda Resources Co.Ltd(000603) 288 Foshan Haitian Flavouring And Food Company Ltd(603288) )
Key investment points:
Event: the company released its annual report for 2021, and achieved an operating revenue of 25.004 billion yuan in 2021, with a year-on-year increase of 9.71%; The net profit attributable to the parent company was 6.671 billion yuan, a year-on-year increase of 4.18%; The non net profit attributable to the parent company was RMB 6.430 billion, with a year-on-year increase of 4.09%.
The annual revenue growth was mainly contributed by volume growth, and the ton price did not increase significantly. Among the core categories, soy sauce achieved a revenue of 14.188 billion, a year-on-year increase of 8.78%; Seasoning sauce achieved a revenue of 2.666 billion, a year-on-year increase of 5.61%; Oyster sauce achieved a revenue of 4.532 billion, a year-on-year increase of 10.18%. In terms of split volume and price, the sales volume of soy sauce was + 8.4% year-on-year and the ton price was + 0.3% year-on-year; Seasoning sauce sales volume + 5.2% year-on-year, and ton price + 0.4% year-on-year; The sales volume of oyster sauce was + 11.5% year-on-year, and the ton price was – 1.1% year-on-year. Other categories achieved a revenue of 2.211 billion yuan, a year-on-year increase of + 13.37%, of which vinegar, cooking wine and other products have begun to take shape. In 2021, household consumption demand continued to be weak, and the superposition of community group purchase had an impact on the competitive pattern of the condiment industry. Under the adjustment of product structure, the increase of ton price was restrained, and the annual income growth was mainly contributed by the increase of volume.
The cost pressure was highlighted, and the net interest rate declined slightly in response to cost reduction, efficiency increase and cost regulation. In 2021, the cost of direct materials increased by 18.17% year-on-year, mainly due to the obvious rise in the procurement cost of raw and auxiliary materials, which dragged down the gross profit margin. The gross profit margin of soy sauce / sauce / oyster sauce / other products was – 4.5% / – 4.7% / – 0.8% / – 1.2% year-on-year respectively. However, the company digested the adverse effects of rising costs to a certain extent by reducing costs and increasing efficiency. For example, the optimization of logistics network structure and the improvement of production and marketing linkage efficiency led to a year-on-year decrease of freight by 2.57%. The annual gross profit margin of sales was 38.7%, down 3.5% from the previous year. In terms of expense ratio, the sales expense ratio decreased by 0.6% year-on-year in 2021, of which the advertising expense ratio decreased by 0.3% year-on-year, indicating that the company optimized the expense delivery to cope with the operating pressure; The rate of administrative expenses and R & D expenses are basically the same; The financial expense rate decreased by 0.6% year-on-year, mainly due to the increase of the company’s interest income.
The annual net interest rate in 2021 was 26.7%, down 1.4% from the previous year.
In 2021q4, the revenue has improved significantly month on month, and strive to achieve double-digit growth in revenue and profit in 22 years. 2021q4 achieved an operating revenue of 7.01 billion yuan, a year-on-year increase of + 22.9% (2021q3 revenue of 56.62, a year-on-year increase of + 3.1%). Q4 revenue growth increased significantly month on month, mainly due to the positive collection of dealers after the company notified the price increase and the advance of goods preparation in the Spring Festival compared with the previous year. Benefiting from the price increase and expense control, Q4 realized a net profit attributable to the parent company of 1.96 billion yuan, a year-on-year increase of + 7.2%; Deducting the net profit not attributable to the parent company of RMB 1.85 billion, a year-on-year increase of + 4.0%. In 2022, the company will accelerate the market transformation and development, accelerate the continuous innovation in the construction of channels / products / terminals, further open the market increment space, and strive to achieve the goal of revenue of 28 billion yuan (year-on-year + 12%) and net profit attributable to parent company of 7.47 billion yuan (year-on-year + 12%).
There is still pressure on short-term operation, and the toughness of the leader should not be underestimated. Haitian’s share is expected to increase in the future, and we look forward to returning to the fast lane of growth. We believe that the short-term operation of the company still faces the pressure of weak demand and high cost, but 2021q4 Haitian took the lead in announcing the price increase. According to the channel feedback, under the refined management of the company’s channels, the current transmission of Haitian price increase is relatively smooth, and the channel inventory is 2.5-3 months, slightly higher than the normal level. In the medium and long term, the company has accumulated obvious scale advantages, category advantages, channel advantages and operation management ability advantages in the past development. The leading toughness can not be underestimated. We look forward to the company’s smooth passage of the difficult period. In addition, the current round of industry has encountered multiple pressure shocks, which may accelerate the withdrawal of small and medium-sized enterprises from the market, and the leading share is expected to be improved. With the gradual recovery of the catering industry and the gradual easing of global inflation, Haitian is expected to return to the fast lane of growth.
Profit forecast and investment suggestions: we predict that from 2022 to 2024, the company will realize an operating revenue of 28.160/32.158/36.732 billion yuan, a year-on-year increase of + 12.6% / + 14.2% / + 14.2%, a net profit attributable to the parent company of 7.119/80.68/9.296 billion yuan, a year-on-year increase of + 6.7% / + 13.3% / + 15.2%, and EPS of 1.69/1.92/2.21 yuan / share respectively. Considering that there is a large space for category expansion and structural upgrading in the condiment industry, the company has obvious scale advantages, category advantages and channel advantages in the industry, and has strong long-term growth certainty, it is given 45-50 times PE in 23 years, corresponding to the stock price target range of 86.4-96.0 yuan, and the rating of “prudent recommendation” is given for the first time.
Risk warning: cost pressure continues to increase; Demand recovery is less than expected; Industry competition intensifies; Food safety risks.
