\u3000\u3 Shengda Resources Co.Ltd(000603) 317 Sichuan Teway Food Group Co.Ltd(603317) )
Event: Sichuan Teway Food Group Co.Ltd(603317) released the annual report for 2021. The annual operating revenue was 2.03 billion, with a year-on-year increase of – 14.3%, the net profit attributable to the parent company was 180 million, with a year-on-year increase of – 49.3%, and the net profit attributable to the parent company after deduction was 120 million, with a year-on-year increase of – 60.5%; Single Q4 achieved an operating revenue of 630 million yuan, a year-on-year increase of – 25.2%, and a net profit attributable to the parent company of 100 million yuan, a year-on-year increase of + 136.8%. The performance slightly exceeded the previous performance express expectations.
The performance of winter tune was brilliant, driving the improvement of revenue in the fourth quarter. 1) In terms of products, the annual income of hot pot seasoning / Sichuan seasoning / winter seasoning was – 28% / – 10% / + 112% year-on-year, and the income of single Q4 was – 42% / – 32% / + 51% year-on-year. Winter seasoning benefited from the strong demand of residents for curing under the low pig price, realizing rapid growth; 2) Split volume and price: the annual hot pot seasoning / Sichuan seasoning / winter seasoning sales volume was – 31% / + 2% / + 103% year-on-year, and the ton price was + 4% / – 12% / + 4% year-on-year. The average price of Sichuan seasoning fell significantly year-on-year, mainly due to the increase in the promotion of “non spicy soup” hot pot seasoning in 2021; 3) In terms of sub regions, the annual revenue of Southwest / Central China / East China / Northwest / North China / Northeast / South China was – 11% / – 12% / – 13% / – 14% / – 21% / – 29% / – 20% year-on-year. Among them, the decline in non main sales areas was greater, mainly due to the contraction of the front in non main sales areas of the company throughout the year; 4) By channel, the annual distribution / customized meal adjustment / e-commerce revenue was – 22% / + 56% / + 1% year-on-year.
The contraction of publicity expenses superimposed on the reduction of discount, and the performance elasticity appeared in the fourth quarter. The company’s gross profit margin / gross sales difference in 2021 were 34.9% / 12.8% respectively, with a year-on-year increase of – 6.6 / – 8.7pct; The rates of sales / management / R & D / financial expenses were 22.2% / 5.4% / 1.3% / – 1.7%, year-on-year + 2.1 / + 1.1 / + 0.0 / – 1.1pct, and the net interest rate was 9.1%, year-on-year -6.3pct; The gross profit margin / gross sales difference of single Q4 was 36.8% / 17.3% respectively, with a year-on-year increase of – 2.0 / + 7.3pct, the sales / management / R & D / financial expense ratio was 19.5% / 7.1% / 1.2% / – 0.8% respectively, with a year-on-year increase of – 9.3 / + 1.9 / + 0.2 / – 0.1pct, and the net profit margin was 16.6%, with a year-on-year increase of + 11.4pct. The improvement of Q4 profit margin was driven by the increase of price + advertising expenses and the reduction of discount.
In 2022, we set a minimum growth target and expect the company to return to high growth. In 2022, the company plans to increase revenue by no less than 15% and net profit by no less than 30%. We believe that 1) the rebound of industry prosperity and the effect of price increase are expected to promote the recovery of revenue growth in 2022; 2) As the channel inventory tends to be benign, the market cost investment is expected to decrease, and the advertising cost shrinks, we are optimistic about the performance elasticity brought by the improvement of the cost rate in 2022.
Investment suggestion: we slightly adjusted the previous profit forecast according to the annual report and introduced the forecast for 2024. It is estimated that the operating revenue from 2022 to 2024 will be RMB 2.54/30.5/3.52 billion (the value before 20222023 will be RMB 2.54/3.1 billion), with a year-on-year increase of + 25.5% / + 19.9% / + 15.5%, and the net profit attributable to the parent company will be RMB 320 / 390 / 460 million (the value before 20222023 will be RMB 320 / 410 million), with a year-on-year increase of + 75.0% / + 20.3% / + 18.4%. The current stock price corresponds to pe42 / 35 / 29 times, maintaining the “buy” rating.
Risk tip: industry demand is lower than expected, raw material cost is higher than expected, and food safety risk.
