\u3000\u3 China Vanke Co.Ltd(000002) 557 Chacha Food Company Limited(002557) )
Event:
According to the annual report issued by the company, the operating revenue in 2021 was 5.985 billion, the same as + 13.15%; The net profit attributable to the parent company is 929 million, the same as + 15.35%; Deduct non net profit of 799 million, the same as + 15.95%; EPS is 1.84 yuan / share, with a dividend of 8.5 yuan (including tax) for every 10 shares.
Key investment points:
1. The whole year ended smoothly and the nuts performed brilliantly. Due to the early spring festival this year, strong demand for gifts and other factors, the company’s annual sales are good, and the sales of melon seeds and nuts have increased rapidly. The revenue in 2021q4 increased by 28.33% year-on-year and increased month on month. By product, in 2021, Guokui / nuts / other products achieved revenue of 3.943/13.66/675 billion respectively, with a year-on-year increase of + 5.86% / + 43.82% / + 9.94%. (1) The growth rate of China huankui increased by 14.3% in the first half of the year. ① Classic red bag still has steady growth under multiple measures such as raw material upgrading, weak market upgrading, sinking market intensive cultivation and overseas market development. ② Flavor melon seeds have been cultivated steadily, the promotion of rattan pepper melon seeds has increased in cities, and the feedback of new tangerine peel melon seeds on trial sale in some areas is good. ③ High end melon seeds Kui Zhen upgraded its raw materials and product strength, and its sales increased rapidly. In the future, the company is expected to continue to promote the high-end process of melon seeds, and the product structure is expected to continue to upgrade. (2) Nuts maintain high growth, Q4 growth is bright. ① The company continued to focus on the small yellow bag of nuts, strengthened the two memory points of “fresh keeping” and “high nutrition”, and achieved sales of nearly 1 billion yuan in the whole year. ② The annual sales of probiotics and oatmeal nuts exceeded 100 million yuan. ③ The performance of nut gift boxes is brilliant, and the sales volume of new year’s festival is rising rapidly. In particular, the penetration of roof box nut gift boxes in the third and fourth tier market is improved, contributing to new revenue growth.
2. The gross profit margin of Q4 is increased, the profitability of the whole year is stable, and the price increase effect is expected to be released gradually. In 2021, the gross profit margin of the company was 31.95%, with a year-on-year increase of + 0.06pct, and the gross profit margin of Q4 was + 5.23pct to 33.43%. In terms of products, the gross profit margins of melon seeds and nuts were 35.6% / 31.2% and + 2.1/2.2pct respectively in the second half of the year. The benefits of melon seeds price increase appeared, and the gross profit margin also increased smoothly after the increase of nut volume. During the whole year, the rate changed slightly, with a year-on-year increase of + 0.21pct, a year-on-year increase of + 0.34 / – 0.16pct in sales rate / management rate respectively, and the net interest rate increased by 0.31pct to 15.53%, mainly due to the year-on-year decrease of 1.8pct to 17.5% in income tax rate. Q4 due to the increase in product publicity and Spring Festival Promotion, the company’s sales rate increased from + 5.60pct to 12.43% year-on-year. Therefore, the net interest rate of single Q4 decreased by 0.90pct to 15.90% year-on-year. Although the price of raw materials of melon seeds has continued to rise this year, the company has started a new procurement season of melon seeds before the Spring Festival, and it is expected that the price increase can basically cover the cost increase. The vigorous sales during the Spring Festival also drives the channel inventory to return to a lower level. The price increase is conducted smoothly, and the price increase effect should be released, which is expected to be beneficial to the profit performance this year. At the same time, the company is expected to take advantage of the opportunity of price increase to improve the quality of red bag melon seeds, continue to promote the upgrading of high-end melon seed brands and packaging, increase brand investment and optimize product structure. In the long run, the gross profit margin of melon seed series products is expected to rise steadily.
3. The internal adjustment and external channel expansion are steadily promoted, and the long-term growth logic is determined. Last year, the company adjusted its organizational structure internally, promoted the reform of marketing system, established two major systems of category and sales, strengthened Wuxi Online Offline Communication Information Technology Co.Ltd(300959) integration and coordination, and effectively improved its internal operation efficiency. The product side melon seeds category continues to develop flavored products, with frequent new flavors, such as ice cream melon seeds, sweet scented osmanthus milk tea melon seeds, etc. the scope of trial sales of rattan pepper melon seeds in cities is expected to be further expanded this year, nut side oatmeal and probiotics are still steadily promoted, and the penetration rate and contribution income are expected to continue to increase. In 2021, the company launched a series of marketing around the 20 years since its establishment, worked with China National Geographic to create the first nut documentary “Qiaqia, the seed of time”, and launched a variety of joint products. In terms of nuts, we are committed to popularizing nut nutrition knowledge and creating the exclusive IP of Dr. nuts for dynamic video transmission. The channel side actively promoted the channel intensive cultivation strategy, the channel digital platform controlled nearly 120000 terminal outlets, and the distribution rate of intensive cultivation market, the jump rate of stores and the monthly per capita output gradually increased. The channel of e-commerce has broken through the new channels such as marketing innovation, voice and live broadcast, Wuxi Online Offline Communication Information Technology Co.Ltd(300959) resources tiktok and marketing synergy, and operation of private sector members. The recent epidemic situation is fermented, but the company entered the off-season in March, and the impact is expected to be limited. In 2022, the company will firmly implement the “double hundred strategy” of “ten billion revenue and one million terminals”, continuously optimize and upgrade the product structure, and the terminal coverage and control are expected to continue to improve, helping the performance to maintain rapid growth.
Profit forecast and investment rating Chacha Food Company Limited(002557) is a leading enterprise in the snack food industry, with high brand awareness and reputation, strong bargaining power and excellent anti risk ability in the face of rising costs. We expect the company’s EPS to be 2.18 yuan, 2.55 yuan and 2.96 yuan respectively from 2022 to 2024, and the corresponding PE to be 27, 23 and 20, giving a “buy” rating.
Risk Tips 1) food safety risks; 2) The promotion of new products is less than expected; 3) The impact of the epidemic exceeded expectations; 4) The cost rise is higher than expected; 5) Risks such as channel development falling short of expectations.
