\u3000\u3 China Vanke Co.Ltd(000002) 183 Eternal Asia Supply Chain Management Ltd(002183) )
Events
The company released the annual report of 2021: in 2021, the company realized a revenue of 70.208 billion yuan (+ 3.06%); The net profit attributable to the parent company was 506 million yuan (+ 310.29%); The net profit deducted from non parent company was 434 million yuan (+ 467.03%).
Comments
Brand operation business continues to contribute profit elasticity, and the performance of distribution and marketing business is stable
1) brand operation business: in 2021, the company’s brand operation revenue was 3.519 billion yuan (+ 70.38%), and the comprehensive gross profit was 640 million yuan (+ 71.38%), including 1.245 billion yuan (+ 43.10%), 497 million yuan (+ 84.96%), 717 million yuan (+ 1048428%), 984 million yuan (+ 9.20%) and 77 million yuan (+ 298.45%) respectively. A new force suddenly rises. In recent three years, Baijiu “treasure one” and “Taiwan black gold ten years” are important single products. In 2021, H1 added “digest 12” to Eternal Asia Supply Chain Management Ltd(002183) . It also launched the characteristic IP sauce wine product “Datang secret manufacturing” (the base wine supply distillery is located in the core sauce wine production area of Maotai Town, ranking the top five in terms of production capacity, adjacent to “Guotai liquor industry” and “Datang liquor industry” with an annual production capacity of more than 5000 tons, and the price band covers the range of Tianjin Jingwei Huikai Optoelectronic Co.Ltd(300120) 0).
2) distribution + marketing: in 2021, the company achieved a distribution + marketing business revenue of 65.162 billion yuan (+ 0.42%), including 4.2 billion yuan (- 23.64%), 15.747 billion yuan (- 2.61%), 12.976 billion yuan (- 0.34%), 13.707 billion yuan (+ 9.99%), 6.711 billion yuan (- 2.84%), 742 million yuan (+ 22.94%) and 6.241 billion yuan (+ 19.55%) from wine and beverage, home appliances, mother and baby, it communication, daily chemicals, medical treatment, industrial raw materials, food and other revenues respectively 3.641 billion yuan (- 27.79%), 1.197 billion yuan (+ 132.43%). Focusing on supply chain services, the company continues to expand the distribution + marketing business of FMCG. At the same time, it integrates the upstream and downstream enterprises of FMCG industry of local governments to help them develop in-depth in maternal and infant, daily chemical, wine and beverage, food, household appliances and other industries.
3) others: in 2021, the company’s revenue from cross-border and logistics services and related transactions between platforms were 19.38 (+84.29%) and -369million (+22.23%) respectively. In 2021, the company established a joint venture with local governments and state-owned enterprises to provide professional supply chain services. At the same time, this year, the company adhered to the platform operation mode of “zero inventory”, reduced the company’s debt ratio through capital return and capital operation, reduced operational risks and optimized the financing environment by stripping the joint venture with inefficient working capital of the past 380 platforms, reduced the company’s interest expense by 170 million yuan and the asset liability ratio by 4.41%; Roe was 7.12%, an increase of 5.05%.
The profit side performed steadily, and the stock option incentive plan was implemented
In 2021, the company’s gross profit margin / net profit margin increased by 0.81 and 0.52 percentage points to 6.35% and 0.64% compared with the same period last year, mainly benefiting from the high growth of brand operation business performance and strong cost control. In 2021, the company’s expense rate decreased by 0.19 percentage points to 5.60% compared with the same period last year, the sales expense rate increased by 0.22 percentage points to 1.51% compared with the same period last year, and the management expense rate decreased by 0.21 percentage points to 2.11% compared with the same period last year. In terms of cash flow, the company’s operating cash flow in 2021 was 1.589 billion yuan, a decrease of 509 million yuan compared with the same period last year. In addition, the company has launched the stock option incentive plan in February 2022, which may further stimulate the vitality of the company.
More than expected development point: take advantage of the wind of sauce and wine, and the brand operation business will rise
Based on the understanding of small B big B and C, the company has started to cultivate, empower and operate high-quality brands since 2017. Combined with the consumption trend, C2M has been fully developed, and the brand potential has been fully exploited. The brand operation business has been launched in the large consumption area, including the Baijiu sector showing its bright eye. In 2020, Baijiu Tai enamel and Taiwan, black gold and other ten pieces of single product were operated through the company’s liquor brand operation business. With less than 5% of the revenue and nearly 10% of the gross profit, the company will further add a number of exclusive products in 2021 to enrich the product matrix. In addition to the original large single products, the summary 12 launched by 21q3 has begun to thicken the performance and can be focused on. Under the sauce hot wine, we have estimated that the scale of 2025 is at least 4 billion yuan. We predict that the Baijiu is expected to achieve a super expected performance. With the successful experience of the company in the development of the Baijiu sector, we have copied it to the small household appliances and medical beauty fields with higher gross margin. We believe that the scale of the brand operation business of the company is 23-25 billion over the past decade, and the profit side can be expected to meet the deadline.
Profit forecast and valuation
We believe that Eternal Asia Supply Chain Management Ltd(002183) will benefit from the steady development of the basic market, the accelerated development of high margin brand operation business, the gradual stripping of drag projects and the implementation of fixed growth. It is estimated that the revenue growth rate from 2022 to 2024 will be 8.0%, 7.7% and 7.1% respectively; The growth rate of net profit attributable to the parent company was 54.9%, 37.0% and 30.1% respectively; EPS is 0.3, 0.4 and 0.5 yuan / share respectively; PE is 20, 14 and 11 times respectively. In the long run, the performance has strong growth, the current valuation is cost-effective, and the buy rating is maintained.
Catalyst: continuous consumption upgrading and smooth introduction of high priced products.
Risk warning: the two outbreak of China’s epidemic situation affects the whole Baijiu sale of liquor. The sales of high-end liquor was less than expected; Financial issues; Management change risk.
