\u3000\u3 Bohai Water Industry Co.Ltd(000605) 338 Zhongyin Babi Food Co.Ltd(605338) )
Events
On the evening of April 8, 2022, the company released its annual report for 2021: the revenue in 2021 was 1.375 billion yuan, an increase of 41.06% at the same time; The net profit attributable to the parent company was 314 million yuan, an increase of 78.92% at the same time; Deduct non net profit of 152 million yuan, an increase of 18.01% at the same time.
Key investment points
Short term factors disturbed the net profit and the gross profit margin rebounded in the fourth quarter
In 2021, the company’s revenue was 1.375 billion yuan (+ 41.06%), the net profit attributable to the parent was 314 million yuan (+ 78.92%), and the non net profit deducted was 152 million yuan (+ 18.01%). It is basically consistent with the previously released 2021 performance express. Including 2021q4 revenue of 402 million yuan (+ 26.00%); The net profit attributable to the parent company was 88 million yuan (+ 21.54%); Deduct non RMB 51 million (+ 17.50%). The growth rate of non net profit deducted is slower than that of net profit attributable to the parent, which is due to the increase in income from changes in fair value (an increase of 147 million yuan in net profit attributable to the parent) caused by the company’s indirect holding of Eastroc Beverage (Group) Co.Ltd(605499) shares.
The gross profit margin in 2021 was 25.70% (with a decrease of 2.20pct), of which the gross profit margin in 2012q4 was 54.79% (with an increase of 5.17pct), mainly due to the following reasons: 1) the consumption cost of pork products remained at a high level in the first three quarters, especially in the first two quarters, and the pork cost decreased in the fourth quarter; 2) In 2020, the state reduced the old-age insurance, but not in 2021, and the labor cost increased year-on-year; 3) Songjiang phase II smart factory was put into operation in June 2021. Since the third quarter, there has been a depreciation process. It will take some time for the capacity to climb, which will reduce the gross profit margin; The capacity utilization rate returned to the normal level in the fourth quarter; 5) Vegetable prices and other disturbing factors in the third quarter. It is expected that the gross profit margin in 2022 is expected to maintain the level of 2021q4.
The net interest rate in 2021 was 22.77% (with an increase of 4.81 PCT), of which the net interest rate in 2021q4 was 21.88% (with a decrease of 0.87 PCT). In 2021, the sales expense was 90 million yuan (an increase of 89% at the same time), which was caused by the company’s advertising and promotion expenses, the increase of employee salary and the provision of bonus in the fourth quarter.
Smooth store expansion and high growth of group meal business
In terms of stores, by the end of 2021, the third-generation stores accounted for nearly 80%. By the end of 2021, there were 3461 franchise stores (including 2950 in East China, 370 in South China and 141 in North China), a net increase of 372 over last year, a new high in recent five years. The average income of franchise stores in 2021 was 323900 yuan (an increase of 3% compared with 2019), which has recovered and exceeded the level before the epidemic in 2019. In 2021, the average revenue of Direct stores was 1306400 yuan (an increase of 25% compared with 2019), which has also recovered and exceeded the level before the epidemic in 2019. By the end of 2021, there were 21 dealers, with a net increase of 6.
In terms of products, in 2021, the revenue of pastry was 469 million yuan (with an increase of 53%) and the gross profit margin was 22.48% (with a decrease of 2.10 PCT), accounting for 34%; Among them, the revenue of 2021q4 was 144 million yuan (with an increase of 46%). The revenue of fillings was 365 million yuan (with an increase of 25%) and the gross profit margin was 25.00% (with a decrease of 1.93 PCT), accounting for 27%; Among them, the revenue of 2021q4 was 99 million yuan (with an increase of 5.44%). The revenue of purchased food was 405 million yuan (with an increase of 55%) and the gross profit margin was 26.36% (with a decrease of 0.25 PCT), accounting for 29%. The revenue of packaging auxiliary materials was 90 million yuan (with an increase of 20%), and the gross profit margin was 28.76% (with a decrease of 3PCT), accounting for 6.6%; Among them, the revenue of 2021q4 is 27 million yuan (with a decrease of 5%). The franchisee’s management revenue is 46 million yuan (+ 18.17%), and the gross profit margin is 51.22%, accounting for 3%.
From the perspective of different channels, the franchise sales revenue in 2021 was 1.121 billion yuan (with an increase of 38%), accounting for 81.5%; Among them, the revenue of 2021q4 was 317 million yuan (with an increase of 21%). In 2021, the sales revenue of Direct stores was 26 million yuan (an increase of 107%), accounting for 2%; Among them, the revenue of 2021q4 was 08 million yuan (an increase of 118%). In 2021, the sales revenue of group meals was 215 million yuan (an increase of 61%), accounting for 15.6%; Among them, the revenue of 2021q4 is 73 million yuan (with an increase of 51%), and the group meal business is expected to continue to develop in 2022; The total revenue of other channels is 13 million yuan (with a decrease of 16%), accounting for 1%; Among them, the revenue of 2021q4 is 03 million yuan (the same decrease of 19%).
In terms of subregions, the revenue of East China in 2021 was 1.257 billion yuan (with an increase of 42%), accounting for 91%; Among them, the revenue of 2021q4 was 366 million yuan (an increase of 29%). In 2021, the revenue of South China was 84 million yuan (with an increase of 21%), accounting for 6%; Among them, the revenue of 2021q4 is 24 million yuan (with a decrease of 6%). In 2021, the revenue of North China was 31 million yuan (with an increase of 111%), accounting for 2%; Among them, the revenue of 2021q4 was 10 million yuan (with an increase of 62%%). In 2021, the revenue of other regions was 03 million yuan (with a decrease of 17%), of which 2021q4 revenue was 01 million yuan (with a decrease of 57%), which was caused by the impact of the epidemic.
In terms of capacity, the total capacity of pastry products in 2021 will be 47800 tons (with an increase of 48%), of which the output of Shanghai factory will be 44000 tons (with an increase of 48%), and the capacity utilization rate will be 91.62%; The total capacity of stuffing products is 23000 tons (with an increase of 21%), of which the Shanghai plant is 29200 tons (with an increase of 29%), and the capacity utilization rate is 101.20%. The Nanjing project is planned to be put into operation in the second half of 2022. It is expected that after being put into operation, the annual production capacity of 186 million steamed buns, 11 million prepackaged bags and 22800 tons of fillings will be formed; After the completion of the 620 million Songjiang project, the production capacity supply in Shanghai and East China will be improved.
The organizational structure is clear, and the goal of adding more than 700 stores
At present, the organizational structure of the company is clear, the group meal business department is upgraded to the key customer business department, and the business positioning is clear; Upgrade Barbie mall as an e-commerce business center and strengthen business expansion in combination with the third-party platform; Upgrade the information management center to a digital R & D center, strengthen the company’s digital management ability, and build a new intelligent chemical plant.
Main measures of the company in 2022: 1) steadily expand production capacity, promote the construction of projects in Nanjing, Shanghai and Wuhan, improve the capacity utilization of factories in North and South China, and promote the nationwide layout of business; 2) Expand the two core businesses of chain stores and group meal customers, and target to add at least 700 stores in 2022; 3) Maintain R & D and innovation of core products and enrich the product types of the two core businesses; 4) Enhance brand influence through new media, live broadcast and other marketing means; 5) Strengthen the construction of human resources, focusing on the selection, cultivation and development of talents; 6) Promote mergers and acquisitions and expand sales scale and market share.
Profit forecast
At present, the profitability of the company’s stores continues to improve, and the superimposed group meal business continues to grow rapidly. We believe that the company is expected to reach a higher level in 2022 and its performance is expected to be further released. We expect that the EPS from 2022 to 2024 will be 1.09/1.33/1.59 yuan, and the current share price corresponding to PE will be 27 / 22 / 19 times respectively. It will be covered for the first time and given a “recommended” investment rating.
Risk tips
Macroeconomic downside risks, consumption dragged down by the epidemic, opening stores less than expected, rising risks of raw materials, etc.
