\u3000\u3 Ping An Bank Co.Ltd(000001) 215 Zhengzhou Qianweiyangchu Food Co.Ltd(001215) )
Wallace and Haidilao continue to expand in large quantities and are expected to continue to develop catering customers in the future. In 2020, the sales of Yum China / Wallace / Haidilao, the company’s top three customers, accounted for 23% / 4% / 2%. With the slowdown of KFC’s same store growth in China, we expect the company’s sales growth to Yum to remain at about 8%. At present, the company has established service systems in Wallace and Haidilao, and strengthened the service and product innovation of the two companies in 2021. With the continuous volume of single products and the continuous launch of new products, we expect that the sales of the two companies may double in 2021. In addition, the company continues to expand big B customers and add Ruixing and other chain catering enterprises. It is expected that except yum, other big B customers are expected to maintain an overall growth rate of more than 50%.
Strong product power superimposes the advantages of scale and small force. B channel has significant advantages. From 2019, the company began to allocate sales personnel for more than one million dealers to help dealers expand customers and enhance the stickiness of dealers. Judging from the current competition pattern of small b-end of rice flour products, although the industry is highly competitive, it is still in the incremental market. We expect that the annual growth rate of fried dough sticks industry may maintain about 20%. On the other hand, the homogenization of products in the current market is serious. We believe that with the increase of downstream demand for cost reduction and efficiency improvement, the company can rely on 1) strong brand power in small B channel; 2) High cost performance; 3) Rich product categories; 4) Supply chain stability and other advantages to realize continuous and large-scale production.
The ceiling of fried dough sticks is far from reaching, and the logic of product expansion has been verified. According to the prediction of yingminte, in 2021, the total consumption of breakfast food by Chinese consumers will be close to 2 trillion yuan, and all kinds of semi-finished breakfast products will continue to enter catering, canteen, group meal, hotel and other channels, only fried dough sticks, and the market capacity is expected to exceed 10 billion yuan. In addition, among the major consumption scenarios of quick-frozen fried dough sticks, hot pot and Malatang currently account for the top, with a market capacity of about 7.7 billion. As the leader of industrialized fried dough sticks, the company is far from reaching the ceiling. In 2021, the company will focus on the single product of steamed and fried dumplings, differentiate the competition, position the medium and low-end market, achieve rapid growth, and meet the demand of canteen and group meal products that can not be broken and can be served quickly. The product expansion logic may continue to be verified.
More than 40% of upstream price lock + smooth transmission of price increase, and the company’s profit margin is stable. Since the orders of the company’s major B customers are signed once a year, and the company locks the price with the upstream directly after signing the order, we expect that more than 40% of the raw material prices are not affected by market fluctuations, so the change of the company’s profit margin is relatively less affected by the raw material prices. Moreover, the cooperation mode between the company and big B is cost plus. Big B will not excessively squeeze the upstream price to ensure a stable profit margin. In December last year, the company began to raise the price of some products at the small b-end to offset the increase of the cost of some unlocked raw materials. Under the condition that the price continues to rise this year, we expect that the company Q1 will not be affected by the cost rise. If the price of Q2 is still high, it is expected that the company may raise the price to cope with the rise of the cost of unlocked raw materials and maintain the stability of profitability.
Profit forecast: the company is expected to achieve revenue of 1.272/1.591/1.990 billion yuan in 21-23 years, with a year-on-year increase of 34.68% / 25.06% / 25.13%; After deducting the incentive cost of rmb1.34 billion, the net profit is expected to be rmb1.63/1.37%, with a year-on-year increase of rmb1.34/1.02% and a year-on-year increase of rmb1.34/1.02%, respectively.
Risk tips: food safety and quality risks; Business risks caused by “covid-19 epidemic”: the risk of rising raw material prices; There is some subjectivity in the calculation, which is only for reference.
