\u3000\u3 Shengda Resources Co.Ltd(000603) 317 Sichuan Teway Food Group Co.Ltd(603317) .SH)
Event: the company released its 2021 annual report. In 2021, it realized an operating revenue of RMB 2.026 billion, a year-on-year increase of – 14.34%, a net profit attributable to the parent of RMB 185 million, a year-on-year increase of – 49.32%, and a net profit deducted from non attributable to the parent of RMB 122 million, a year-on-year decrease of – 60.53%. Among them, 21q4 achieved an operating revenue of 628 million yuan, a year-on-year increase of – 25.22%, a net profit attributable to the parent of 104 million yuan, a year-on-year increase of 136.78%, and a net profit deducted from non attributable to the parent of 58 million yuan, a year-on-year increase of 347.78%.
Comments:
21q4 revenue growth improved month on month, and sausage and bacon seasoning contributed greatly. 21q4’s revenue fell by 25.2% year-on-year, mainly due to weak industry demand and channel de inventory, but the revenue growth rate in the fourth quarter has improved month on month. In terms of products, the revenue of hot pot seasoning and Chinese dish seasoning decreased by 41.5% and 32.2% respectively year-on-year, and the sausage and bacon seasoning increased by 50.5% year-on-year, making a great contribution to the revenue growth. In terms of regions, the revenue growth of 21q4 Southwest / Central China / East China / Northwest / North China / Northeast / South China was – 15.9% / – 74.7% / – 45.9% / – 14.8% / – 14.9% / – 31.2% respectively. Due to the low base, central China performed better year-on-year, but other regions slipped to varying degrees. In terms of volume of direct business / small business channel, the growth rate of direct business / small business channel was -33.8% / 135.08% year-on-year, and the growth rate of direct business / small business channel was -61.5% / 213.08% year-on-year respectively.
In 21q4, the cost input was reduced and the net interest rate was significantly improved. 21q4’s gross profit margin was 28.1%, down 5.4 percentage points month on month, mainly due to the rise in raw material prices. The sales expense rate of 21q4 was 10.8%, a year-on-year decrease of 13 percentage points. On the one hand, the investment in advertising and publicity was reduced, on the other hand, the investment in promotion expenses was reduced due to the easing of industry competition. 21q4 gross sales difference was 17.3%, up 7.6 percentage points month on month. 21q4 management / R & D expense ratio was 7.1% / 1.2% respectively, with a year-on-year increase of 1.9/0.2 percentage points respectively. The increase of management expense ratio was mainly due to the increase of share based payment expenses. The net interest rate of 21q4 was 16.61%, an increase of 11.4 percentage points month on month, and the net profit margin was significantly improved.
Consolidate the foundation and develop steadily. In 2022, the company plans to increase its operating revenue by no less than 15% year-on-year and net profit by no less than 30%. The company’s revenue target is to grow steadily, pay more attention to building its own competitiveness, and adhere to the strategy of long-term development. For example, the conservative goal of the 22-year equity incentive plan is to ensure that the team can get incentives to improve the team cohesion and enthusiasm.
Profit forecast and investment rating: looking forward to 2022, the company’s channel inventory is benign, and we expect the cost of processing temporary products to be significantly reduced year-on-year. Under the scale effect, the unit manufacturing cost and labor cost will also decrease. In addition, the price increase of Sichuan seasoning products will also contribute to profit elasticity. As the leader of compound condiments, the company has brand and channel advantages. We expect that the company’s EPS in 22-24 years will be 0.42/0.53/0.71 yuan respectively, and the corresponding PE will be 42.15/33.36/25.13 times respectively, maintaining the “buy” rating.
Risk factors: the price rise of raw materials is higher than expected; The promotion of new products is less than expected; Industry competition intensifies.
