\u3000\u3 Bohai Water Industry Co.Ltd(000605) 338 Zhongyin Babi Food Co.Ltd(605338) )
Event:
Zhongyin Babi Food Co.Ltd(605338) released the annual report of 2021: in 2021, the company achieved revenue, net profit attributable to parent company and non net profit attributable to parent company deduction of 1.375 billion yuan, 314 million yuan and 152 million yuan respectively, with a year-on-year increase of + 41.06%, + 78.92% and + 18.01%. Among them, Q4 achieved revenue, net profit attributable to parent company and non net profit attributable to parent company deduction of 402 million yuan, 88 million yuan and 51 million yuan respectively, with a year-on-year increase of + 25.99%, + 21.54% and - 0.92%.
Comments:
Revenue analysis: the number of group meals contributed to the growth rate. In 2021, the company achieved a revenue of 1.375 billion yuan, a year-on-year increase of + 41.06% (Q1: + 131.80%; Q2: + 39.75%; Q3: + 25.26%; Q4: + 25.99%). Split: 1) sub business: franchise revenue of 1.121 billion yuan, year-on-year + 38%, direct business of 25.55 million yuan, year-on-year + 107%, group meal of 215 million yuan, year-on-year + 61%; 2) Direct business: at the end of the year, the company had 19 Direct stores, with a net increase of 2. The same store revenue was 1.3064 million yuan / store, a year-on-year increase of + 79.7%. 3) Franchise business: at the end of the year, the company had 3461 franchise stores, with a year-on-year increase of + 12.04%, with a net increase of 372 stores (716 newly opened / 344 reduced). Among the franchise stores, there were 215 in East China, 101 in South China and 56 in North China; The revenue of a single store was 322900 yuan / store, with a year-on-year increase of + 23.11%. In 21 years, it has returned to the level of 19 years before the epidemic and is slightly higher, mainly due to the development of takeout business, the slight increase of supply price, the upgrading of third-generation stores, etc. 4) By Region: East China's revenue was 1.257 billion yuan, a year-on-year increase of + 42%, South China's revenue was 84 million yuan, a year-on-year increase of + 21%, and North China's revenue was 31 million yuan, a year-on-year increase of + 111%. There was a difference between South China's revenue growth and store growth, mainly related to group meal business.
Profit analysis: the gross profit margin decreased, driving the deduction of non net profit lower than the growth rate of revenue. In 2021, the net profit was 314 million yuan, a year-on-year increase of + 79% (Q1: + 5.45%; Q2: + 366%; Q3: - 69%, Q4: + 22%), and the growth rate of net profit fluctuated greatly, mainly due to the change of equity value of Dongpeng special drink; The non net profit deducted by the parent company was 152 million yuan, with a year-on-year increase of + 18% (Q1: turning losses into profits; Q2: + 10.71%; Q3: - 5.38%; Q4: + 17.5%). The lower growth rate of profit in 21 years was mainly due to the decline of gross profit margin. The gross profit margin of the company in 21 years was 25.70%, with a year-on-year increase of -2.20pct. In terms of quarterly split, the gross profit margin of Q2 and Q3 decreased significantly, and the main reasons for the decline of gross profit margin were: 1) pork price was at a high level; 2) Songjiang phase II was put into operation in June of 20 years, and it takes a certain time for the production capacity to climb, resulting in the rise of manufacturing costs; 3) The 20-year social security has certain support, resulting in a high base of gross profit margin. Q4 gross profit margin increased significantly, mainly due to the mitigation of the above three reasons. During the 21-year period, the expense rate was 10.42%, with a year-on-year increase of + 0.60pct, of which the sales expense rate was + 1.67pct, mainly due to the increase of marketing planning fees, the increase of employee bonuses under the high increase of income, the sharp increase of employee compensation, the year-on-year rate of administrative expenses was -0.42pct and the rate of financial expenses was -0.64pct. 21. The net profit rate attributable to the parent company was 22.83%, with a year-on-year increase of + 4.83pct, and the non net profit rate attributable to the parent company was 11.07%, with a year-on-year decrease of -2.16pct, mainly due to the decline of gross profit rate.
22 year Outlook: the prospect of opening the same store is positive, and the profit growth has a lot to see. Looking forward to 22 years, we believe that 1) revenue side: the company's store opening strategy is positive and stable. Driven by takeout, the same store revenue is expected to continue to achieve high growth. In addition, in the region, central China, South China and North China are in the store potential energy releaser, which is expected to contribute to good revenue growth; 2) Cost side: the pork price is expected to run at a low level in 22 years. In addition, Songjiang phase II, Guangzhou and Tianjin factories are expected to benefit from large sales volume, the average manufacturing cost is expected to decline, and the release of raw materials + production capacity will jointly drive the increase of gross profit margin; 3) Profit side: the 22-year sales expense ratio is expected to remain stable and decline slightly. Under the store opening effect, the advantages of brand marketing promotion are prominent. The staff salary is expected to be slightly lower than the revenue growth, and the profit growth is expected to be higher than the revenue growth.
Long term outlook: the track is naturally suitable for chain, the company's ability is industry-leading, high growth and strong certainty in the early stage of growth, and is optimistic about the development of the company. From the point of view of the track, the required attributes bring high unit time conversion rate and repurchase rate of the store, ensuring the single store model of the category. From the perspective of the company's ability, on the one hand, the company constructs an all-round daily distribution to store system of "close to stores, unified management, fast supply and maximizing quality and freshness"; On the other hand, the company has established a complete training system inside, and set up hierarchical management and incentive policies for franchisees outside the company, so as to realize the efficient management of franchisees through store supervision and communication mechanism and information system construction. In terms of life cycle, the company's store model is polished well. At present, it is in the stage of national expansion in the early stage of growth, and the revenue growth is highly deterministic. With the increase of the number of stores, the brand effect is reflected, and the scale effect is prominent. In the long-term trend, the profit growth rate is higher than the revenue growth rate, so it is optimistic about the development of the company at the current stage.
Profit forecast and rating: give the company a "buy" rating. We estimate that the revenue growth rate in 22-24 years will be 26%, 21% and 18% respectively, the net profit growth rate will be - 24%, 22% and 21% respectively, and the corresponding EPS will be 0.96 yuan, 1.17 yuan and 1.42 yuan respectively. After excluding the profit and loss of changes in fair value, the net profit growth rate will be 27%, 25% and 23% respectively. In the short term, the company opened stores steadily in the past 22 years, and the same store is expected to continue high growth. The pork price is running low + the manufacturing cost is down, and the main business profit is expected to be higher than the income growth. In the medium and long term, the company is in the stage of national expansion in the early stage of growth, with strong certainty of high growth. Considering the current market environment, we give 40x valuation according to the performance in 2022, with a one-year target price of 38.5 yuan, and give the company a "buy" rating for the first time.
Risk warning: industry competition intensifies; The opening of the store was not as expected; The epidemic brings uncertainty to the company's operation; Price fluctuation of raw materials; Food safety issues;
