\u3000\u3 China Vanke Co.Ltd(000002) 507 Chongqing Fuling Zhacai Group Co.Ltd(002507) )
Event:
Chongqing Fuling Zhacai Group Co.Ltd(002507) released the annual report of 2021. The company achieved a revenue of 2.519 billion yuan, a year-on-year increase of + 10.82%, a net profit attributable to the parent company of 742 million yuan, a year-on-year increase of – 4.52%, and a net profit not attributable to the parent company of 694 million yuan, a year-on-year decrease of – 8.49%, of which Q4 achieved a revenue of 563 million yuan, a year-on-year increase of + 18.74%, a net profit attributable to the parent company of 238 million yuan, a year-on-year increase of + 45.75%, and a non net profit attributable to the parent company of 209 million yuan, a year-on-year.
The company announced its business plan: in 2022, it is expected to achieve a revenue of 2.896 billion yuan, a year-on-year increase of + 15%, an operating cost of 1.188 billion yuan, a year-on-year increase of – 1.03%, and an expected gross profit margin of 59.00%, an increase of 6.64pct over 2021.
Comments:
Income analysis: the unit price increases and the income increases. In 2021, the company achieved a revenue of 2.519 billion yuan, with a year-on-year increase of 10.82% (including Q1: + 46.86%; Q2: – 10.78%; Q3: + 1.30%; Q4: + 18.74%). The growth rate is different in each quarter, mainly related to the difference of base number and channel stock after Q4 price increase. 1) Volume and price cost: in 2021, the sales volume decreased by 1.65%, the sales unit price increased by 12.70%, and the cost increased by 30.28%. The annual profit growth rate was lower than the income growth rate, mainly because the cost rose faster than the unit price; 2) Category: the sales of pickled mustard was 2.226 billion yuan, a year-on-year increase of + 12.73%, pickled cabbage was 159 million yuan, a year-on-year increase of + 3.35%, radish was 69.04 million yuan, a year-on-year increase of – 30.77%, and the growth rate of the main category of pickled mustard was good; 3) Sub regions: sales in East China and South China increased by 23.19% and 15.15% respectively, while sales in North China, central China and Northeast China increased by 9.85%, 13.16% and 13.80% respectively. The growth rate in Northwest and central China was low, about 4%, and that in Southwest China decreased by 10.49%. 4) Dealers: at the end of the 21st century, the company had 3030 dealers, an increase of 382 over the previous year.
Profit analysis: the cost goes up, the expense increases, and the net interest rate goes down. In 2021, the company’s gross profit margin was 52.36%, with a year-on-year decrease of 5.90pct (q1:60.07%; q2:58.85%; q3:51.64%; q4:36.08%), and the gross profit margin fluctuated greatly, mainly related to the change of accounting standards. Therefore, we pay attention to the gross sales difference. The gross sales difference in 21 was 33.50%, with a year-on-year decrease of -8.57pct. On the one hand, the cost rose, on the other hand, the publicity fee increased significantly compared with 20 years. In the whole year of 21, the company invested 255million yuan to build a brand. The non net profit margin deducted in 21 years was 27.57%, with a year-on-year decrease of 5.82pct, which was mainly due to the significant increase of gross profit margin and publicity fee.
Future outlook: the cost dividend appears in 2022, and the revenue and profit outlook is positive. The company announced its 2022 plan. In 2022, it achieved a revenue of 2.896 billion yuan, a year-on-year increase of 15.00%, an operating cost of 1.188 billion yuan, a year-on-year decrease of 1.03%, and an expected gross profit margin of 59.00%, an increase of 6.64pct compared with 2021. The plan is positive. We believe that the company has a high possibility of realization. 1) revenue side: the price increase of some products in 21q4 is 3% – 19%, and the price increase effect is expected to be reflected in 22 years. The large-scale publicity cost in 21 years is also expected to drive the sales growth in 22 years. In addition, the development of catering channels and the listing of new light salt products in line with consumption upgrading are expected to contribute new increment; 2) Profit side: in 2022, Fuling area had a high yield of pickled mustard. At present, the average purchase price is about 800 yuan, which is significantly lower than that in 21 years. At the same time, considering that the investment of publicity expenses has shrunk in 22 years, the profit elasticity can be expected.
Profit forecast and rating: give “overweight” rating Chongqing Fuling Zhacai Group Co.Ltd(002507) is the absolute leader in China’s Pickle industry. In the long term, the company expects 10 billion revenue and 2 billion profit. In the medium term, the price increase effect and publicity investment effect in 22 years are expected to appear, and the revenue target is guaranteed. At the same time, the listing of new light salt products is in line with the new trend of consumption upgrading, and is also expected to become the selling point of the company’s products in the future. In addition, the downward trend of cost is determined, the publicity expenses are reduced, the profit is high, and the elasticity and certainty are strong. In the short term, Q1 may be affected by the epidemic to a certain extent, with a slightly lower growth rate, which is expected to stabilize gradually in the follow-up. The growth rate of our revenue is expected to be 13% in 2024 and 15% in 2024 and 2024 respectively; The growth rate of net profit was 32%, 16% and 15% respectively; The corresponding EPS is 1.11, 1.28 and 1.47. We gave 35 times PE’s phased target price of 39 yuan according to EPS in 2022, maintaining the company’s “buy” rating.
Risk warning: industry competition intensifies; Price fluctuation of raw materials; Food safety issues;
