\u3000\u3 China Vanke Co.Ltd(000002) 507 Chongqing Fuling Zhacai Group Co.Ltd(002507) )
13 price increases drove the continuous growth of performance. In the 14 years from 2007 to 2021, the compound growth rate of the company’s revenue was 13.36%. With the 13 price increases before and after, the gross profit margin increased by 17pct, and the profitability increased significantly, driving the compound growth rate of net profit attributable to the parent company to maintain 26.42% in the past 14 years, far exceeding the growth rate of the company’s revenue.
Focus on pickled mustard business and absolutely lead the 10 billion market. Mustard business contributes 90% of the company’s revenue and gross profit, which is the core business of the company.
At present, the market scale of mustard industry is about 8.8 billion yuan, and the compound growth rate of the industry is expected to be 11.8%. By 2025, the market scale of mustard industry is expected to reach 13.8 billion yuan.
The competition pattern of mustard industry is scattered. As the only listed company, the company is in an absolute leading position in the industry, and its annual sales are 3.4 times that of the second place. Take root in the core resource area and control the key industry.
The composition of green vegetable head is the largest cost sub item of mustard enterprises. The price of green vegetable head fluctuates greatly, disturbing the profitability of mustard enterprises.
Qingcaitou has the characteristics of short listing period, difficult preservation, uneconomical transportation and difficult to expand production in other places, which determines that enterprises rooted in qingcaitou production area and supported by the government of origin have absolute advantages.
Abundant cash flow helps enterprises to be in an advantageous position in the collection and storage link. Enterprises with larger pit capacity, more advanced production technology and more modern manufacturing technology can stabilize the impact of green vegetables on costs. The channel has full stamina and obvious brand advantages.
The company has established a sales network covering the whole country, regional division of labor and going deep into villages and towns. With the help of sales personnel, the dealers can realize channel sinking and Wuxi Online Offline Communication Information Technology Co.Ltd(300959) coordination and complementarity.
In the last 3-4 years, the number of dealers, sales personnel and the proportion of sales personnel have increased significantly, which is expected to support the sales revenue in the period of 22-25 years.
Brand strength supports the company to raise prices, and the retail price of product terminals leads the industry. Iteration of consumption scenarios, supported by both volume and price
The target customers of the products are expanded from grass-roots workers to tourists, aviation catering, etc.
Strengthen the company’s marketing efforts to support future sales; The selling price per ton has continued to rise, and the price increase in 21 years has further increased the unit price.
Investment suggestion: it is predicted that the company will realize an operating revenue of RMB 2.963/3.244/3.537 billion from 2022 to 2024, with a year-on-year increase of 17.63% / 9.47% / 9.04%; The net profit attributable to the parent company was 1.008/10.77/1.217 billion yuan, with a year-on-year increase of 35.91% / 6.81% / 12.99%; The EPS is expected to be 1.14 yuan / 1.21 yuan / 1.37 yuan respectively, and the PE on the corresponding reporting date is 28.75/26.94/23.85 times respectively, giving a “buy” rating.
Risk tips: intensified industry competition, food safety risks, trademark infringement and counterfeiting risks, industry reputation risks, and the impact of the epidemic exceeded expectations.
