\u3000\u3 Shengda Resources Co.Ltd(000603) 345 Fu Jian Anjoy Foods Co.Ltd(603345) )
Key investment points:
As the leader of the quick-frozen food industry, Anji still maintained a higher growth rate than the industry after the industry entered the stage of steady growth, and gradually opened the gap with its competitors. We believe that the core logic behind it is mainly divided into three points: 1) the company has professional and practical management, the short-term strategy conforms to the market, and the long-term strategy is firm and clear. The company adopts the management mode of professional managers. The main executives grow together with the company and hold shares. The short-term strategy is good at meeting the market demand. In the long term, through the strategic layout of capacity expansion, “real estate sales” mode and differentiated competition, the company leads the company to gradually become the leader of the industry. 2) The ability to create large single products is strong, and the scale effect brought by capacity expansion provides guarantee for the large-scale volume of large single products. The company takes product power as the cornerstone, strengthens the scale effect through steady capacity expansion, opens the gap with competitors in cost, and focuses on the promotion of channel resources to support the large-scale growth of large single products with the advantages of high quality, medium and high price. Over the years, the company has cultivated dozens of billions of large single products such as lock fresh packaging series, pee meatballs and Xiami dumplings. The annual revenue growth of large single products contributes about 50% to the overall revenue growth on average. 3) Strong channel service capability and the strength of the channel cultivated over the years support the rapid growth of the overall scale. The company has grown up with dealers for many years and has a large number of high-quality and stable dealer resources. Through the channel service mode of “close service”, the dealers have high loyalty, high sensitivity to the market and strong execution ability. At the same time, the company adopts the channel management strategy of adjusting measures to local conditions to maximize the effectiveness of local channels.
Future highlights:
1) the traditional quick freezing boom of the main business is still in progress, and the main melody is structural upgrading + concentration improvement. The traditional quick-frozen food industry still has incremental space in the future. Among them, the quick-frozen hot pot materials mainly benefit from the improvement of product structure and application scene penetration under the trend of consumption upgrading, while the quick-frozen rice flour products rely on the large volume of new products to drive the overall growth. At the same time, at present, the market share of Anji in the quick-frozen hot pot material industry is only 15.5%. In the long term, it can improve the market share through new product expansion, channel expansion and sinking.
2) the prefabricated food industry is growing rapidly, and the company is expected to become a national leader in prefabricated food. The prefabricated food industry has developed rapidly driven by the cost reduction and efficiency increase at the b-end and the change of consumption habits at the C-end. At present, there are many participants in the prefabricated food industry, and there are no large-scale national single products. Combined with the characteristics of categories and channels, we believe that large-scale oriented, supplemented by high profitability, is the key to the growth of categories. Small B-type catering has the fastest volume, and the family channel marketing investment is large, but the profitability is the best. Anji has rich experience in building large-scale single products, has keen market response ability, and has prominent advantages in capital scale. The superposition of fixed increase projects and Hubei Honghu project will add an annual production capacity of more than 200000 tons of prefabricated vegetables, which has the basis for building large-scale single products. After being converted to self-produced, the profitability of prefabricated vegetables may be effectively improved. At the same time, the company has a mature distribution network. Its main advantage channel is the small b-end with high volume speed, and the proportion of C-end has gradually increased in recent years. It is expected that the prefabricated dishes can cooperate well with the original channels. At present, the company is actively using the counter import mode to layout the terminals in advance, which is expected to work together at both ends of B and C to stabilize the foundation of nationwide promotion.
3) the long-term upgrading of product structure and the enhancement of scale effect have room to improve profitability. The company always adheres to the consumption upgrading trend on the basis of high cost performance, and continues to improve its profitability by launching medium and high-end new products and increasing C-end investment. In addition, the production capacity of new factories and fixed increase projects are also under active layout and construction. It is expected that the company will maintain a production capacity release rate of about 20% in the future and continuously strengthen its cost advantage. In the short term, the company is affected by the price rise of raw materials, low gross profit of OEM prefabricated vegetables, double reduction policy, weak consumption power and other factors, but the company has strong control over the price of raw materials and has raised the price to deal with the cost pressure, and the impact of double reduction has basically subsided. In the future, with the gradual release of production capacity and the gradual weakening of external influence, the level of net interest rate is expected to be effectively improved.
Profit forecast and investment rating: we expect the company’s EPS from 2021 to 2023 to be 2.88, 3.11 and 3.83 yuan / share respectively, and the corresponding PE is 39 / 35 / 29 respectively. Considering that the company, as the leader of the quick-frozen food industry, has a clear long-term business strategy, stable growth of the traditional main business and brilliant performance of the prefabricated vegetable business in the second growth curve, the company is expected to fully enjoy the growth dividend of the industry with excellent comprehensive strength. At the same time, the release of new production capacity is orderly, there is still room for improvement of long-term profitability, high growth certainty, first coverage, and a “buy” rating is given.
Risk tips: 1) intensified industry competition; 2) Food quality and safety issues; 3) Cold chain logistics transportation risk; 4) Economic downside risk; 5) Upstream raw material price fluctuation risk; 6) The future uncertainty of the penetration rate of the prefabricated vegetable industry; 7) Capacity release was less than expected.
