\u3000\u3 Shengda Resources Co.Ltd(000603) 317 Sichuan Teway Food Group Co.Ltd(603317) )
Core view
Event: the company released its annual report for 21 years, achieving revenue of 2.03 billion (- 14.3%) and net profit attributable to parent company of 180 million (- 49.3%). In Q4 alone, the revenue was 630 million (- 25.2%), the decline narrowed compared with Q3, and the net profit attributable to the parent company was 100 million (+ 136.8%).
Many factors put pressure on revenue, and the growth rate of customized meals is obvious. Under the pressure of weak demand, intensified competition and destocking, the company's revenue growth in 21 years was lower than expected, of which hot pot ingredients / Sichuan dispatching / winter dispatching contributed 880 million (- 28.3%) / 850 million (- 10.4%) / 210 million (+ 111.6%) respectively. For the price of main products, the hot pot material / Sichuan dispatching sells 37000 tons (- 31.2%) / 43000 tons (+ 1.7%), and the price per kilogram is 23.63 yuan (+ 4.3%) / 19.65 yuan (- 11.9%). In terms of channels, dealers / customized meal adjustment / e-commerce / direct business supermarkets achieved revenue of 1.57 billion (- 21.7%) / 250 million (+ 55.9%) / 160 million (+ 1.0%) / 20 million (+ 14.4%) respectively. The growth rate of customized meal adjustment was high and the operation recovered due to the epidemic of big B customers.
Destocking + high cost + market investment squeezed the annual profit, and Q4 improved. 1) After the restoration of the company in 21 years, the gross profit margin was 34.9% (- 6.6pct), mainly due to ① the rising cost of raw materials (the cost of direct materials per ton of main business increased by 7.5%) ② the adjustment of product structure (the gross profit margin of customized meals was low, but the proportion of revenue increased) ③ the increase of promotion. After the restoration of single Q4, the gross profit margin was 36.8% (- 2.0pct), and the month on month decline narrowed, which was reflected by the improvement of discount + price increase. 2) 21. In the whole year, the sales expense rate after restoration of single Q4 was 22.2% (+ 2.1pct) and 19.5% (- 9.3pct). The improvement in a single quarter was due to the reduction of advertising and promotion expenses. 3) The ratio of management / R & D / financial expenses in 21 years is 5.4% (+ 1.1pct) / 1.3% (+ 0.0pct) / - 1.7% (- 1.1pct), in which the proportion of equity incentive expenses is + 0.6pct and the proportion of interest income is + 1.1pct; The net interest rate attributable to the parent company is 9.1% (- 6.3pct). The single Q4 management / R & D / financial expense rate is 7.1% (+ 1.9pct) / 1.2% (+ 0.2pct) / - 0.8% (- 0.1pct), and the net profit attributable to the parent company is 16.6% (+ 11.4pct).
The business adjustment and income are expected to recover steadily in 22 years, and the net interest rate may benefit from the optimization of market strategy. 1) The company's target for the year of 22 was stable (revenue / profit increased by 15% / 30%) and multi-dimensional adjustment strategy ensured Revenue: for dealer management, on the one hand, slow down the expansion (the number of dealers in Q4 decreased by 154, a total of 3409 by the end of 21, which has basically covered regions / cities / counties across the country), on the other hand, launch the "excellent business + supporting business" system, which is expected to win growth space from the perspective of dealer quality improvement in the future; For business combing, ① ensure the leading position of good people at the C-end, ② expand Dahongpao to the small b-end on the basis of the C-end, ③ customize the meal tune, focus on the head chain restaurant enterprises, integrate resources in combination with the capital platform, and ④ develop new retail channels based on content e-commerce and quality e-commerce, making it an important place for future market opportunity insight, brand communication, new product trial sales and private domain operation. 2) Under the influence of external factors of demand to be recovered + high cost, the company's gross profit margin is still under pressure in the short term. However, with the optimization of marketing structure (establishment of Marketing Committee) + refinement of strategy (reducing large media advertising, focusing on content, e-commerce, local promotion, etc.), the market input end is expected to continue to reduce costs and increase efficiency and improve net profit margin to a certain extent. 3) At present, the competition pattern of the industry has improved. Driven by the contraction of business by some enterprises and the return of industry cognition to rationality, the trend of industry headedness and the aggregation of mature products will continue. However, the company has obvious advantages in Sichuan style products and national layout. In the future, it is expected to land with business adjustment and performance flexibility.
Profit forecast and investment suggestions
As the performance in 21 years was lower than expected and the period from 22 to 23 years was in the operation adjustment period, we lowered the revenue growth rate of main products and predicted that the company's earnings per share in 22-24 years would be 0.39, 0.51 and 0.64 yuan respectively (EPS in 22-23 years before adjustment was 0.48 yuan and 0.59 yuan). We used the comparable company valuation method to give the company a price earnings ratio of 45 times in 22 years, corresponding to the target price of 17.55 yuan in 22 years, maintaining the "overweight" rating.
Risk tips
Industry competition intensifies; Risk of improper management of dealers; Fluctuation of raw material price
