\u3000\u3 China Vanke Co.Ltd(000002) 507 Chongqing Fuling Zhacai Group Co.Ltd(002507) )
Events
On the evening of April 7, 2022, the company announced that the state owned assets supervision and Administration Commission of Fuling transferred its 100% equity of Fuling SDIC to Fufa group free of charge, forming an indirect acquisition of a listed company under the same control.
Key investment points
The reform of state-owned enterprises continued to deepen and improve the operation efficiency of the company
After this free transfer, the level of controlling shareholders of the company has changed. Fuling SDIC is still the controlling shareholder of the company, Fuling group is the indirect controlling shareholder of the company, and Fuling District SASAC is still the actual controller of the company.
At present, Fuling SDIC has become an entity company focusing on financial services, industrial investment, capital operation and land development. The transfer is to thoroughly implement the relevant requirements of the three-year action plan for state-owned enterprises, further integrate the state-owned assets of Fuling District, enhance the endogenous development momentum, promote the sustainable and healthy development of state-owned enterprises in Fuling District, and optimize the layout of state-owned capital. At the same time, it can effectively improve the company’s enterprise management level and operation efficiency.
Price increase + cost reduction + fee reduction, and dividends continue to be paid
At present, the company has made good progress in price increase, and the terminal has been basically completed. Under the effect of price increase, the price increase dividend is prominent. The overall cost side has decreased. The average purchase price of young vegetables in 2022 is about 800 yuan / ton (1100 yuan / ton in 2021). It is expected to launch new vegetables in succession around May. At that time, the cost will drop significantly, driving the increase of gross profit margin. In addition, the cost investment in 2022 is more accurate, the overall sales expense rate is expected to decline, and the profit side of the company is more flexible.
Profit forecast
With the release of production capacity and the large volume of new categories such as radish, it is optimistic that the smooth implementation of the company’s price increase will lead to the increase of price. The coordinated development of multiple categories, mainly mustard, will lead to the increase of volume. With the steady progress of channel sinking, the company’s performance will be gradually released. We expect EPS to be 1.17/1.42/1.70 yuan from 2022 to 2024, and the current share price corresponding to PE is 28, 23 and 19 times respectively, maintaining the “recommended” investment rating.
Risk tips
Macroeconomic downside risk, epidemic drag on consumption, regional expansion less than expected, new product promotion less than expected, price increase less than expected, new product promotion less than expected, capacity digestion less than expected, raw material price rise, etc.
