\u3000\u3000 Fu Jian Anjoy Foods Co.Ltd(603345) (603345)
In the third quarterly report, the dish products performed well, and the channel network was further opened
The company's 2021q1-q3 revenue was 6.096 billion yuan, an increase of 36% at the same time; The net profit attributable to the parent company was 494 million yuan, an increase of 30% at the same time; The net profit excluding non parent company was 382 million yuan, an increase of 12.3% at the same time. Among them, the revenue of 2021q3 was 2.203 billion yuan, an increase of 35% at the same time; The net profit attributable to the parent company was 146 million yuan, an increase of 22% at the same time; Deduct the net profit not attributable to the parent company of 77 million yuan, with a decrease of 28.36%. The third quarterly report continued to maintain high growth, which was caused by the company's consolidation of XINHONGYE, Kung Fu food and the increase in product sales brought by continuous market development.
In 2021q1-q3, the revenue of flour and rice products, meat products, surimi products and dishes products was RMB 1407 million, RMB 1421 million, RMB 2315 million and RMB 918 million respectively, with an increase of 24%, 24%, 28% and 126% respectively. Among them, the revenue of 2021q3 noodle rice products, meat products, surimi products and dishes products was 481 million yuan, 453 million yuan, 815 million yuan and 431 million yuan respectively, with an increase of 25%, 11%, 23% and 147% respectively. The remarkable performance of dish products is due to the increment of egg dumpling series, shrimp slide series, sub brand "Mr. frozen products" and the increment of XINHONGYE food, a holding subsidiary, included in the scope of consolidated financial statements. In terms of channels, the revenue of 2021q1-q3 distribution channels, supermarkets, special channels and e-commerce channels were RMB 51.40, 64.40, 1646 and 1473 million respectively, with an increase of 38%, 5%, 76% and 211% respectively. Special channels and e-commerce channels grew significantly, and the channel network was further improved.
The price increase is expected to effectively alleviate the rising cost in 2022
On November 1, 2021, the company issued a price increase announcement to reduce the promotion policies of some quick-frozen surimi products, quick-frozen dishes and quick-frozen rice flour products or increase the distribution price by 3% - 10%. The new price has been implemented since the date of price increase.
Since September, the company has indirectly raised prices by reducing promotion efforts and directly raised prices for some products to cope with the pressure of rising costs. However, due to the repeated epidemic and the impact of consumption environment, the transmission effect of price increase needs time to digest and test. As a leader in the frozen food industry, the company has strong bargaining power. We believe that the price increase effect is expected to appear in the first half of 2022.
In the field of prefabricated dishes, Mr. Kwai is expected to become a new growth point. In 2020, the company established Mr. frozen products, taking "multi category, less specifications", "all channels, the whole region, differentiated large single products" as the principle. The strategy is to establish "fast food sales area and BC balance". Braised pork with preserved vegetable in soya sauce, Kwai Chou bone, tempura, shrimp, pickled cabbage, sea food and poultry, chicken feet and bone jumping. We expect that Kwai Chi has already put in about 7000 freezers in 2021, and is expected to double in 2022. Mr. frozen product has exceeded the company's expectations since it was put on the market. We expect Mr. frozen product to contribute about 300 million sales to the company last year. With the company's in-depth development in the field of prefabricated dishes, we expect Mr. frozen products to become a new growth point of the company.
The overall company implements the business strategy of "all channels, all regions and large single products", comprehensively improves the competitiveness of large single products in all channels, and continuously improves the market share of quick-frozen food. Implement the channel strategy of "giving consideration to BC and two wheel drive", adhere to the product pricing strategy of "high quality, medium price and high price" according to the idea of "main food development and balanced development", and continuously improve the product cost performance.
Profit forecast
We are optimistic about the company's entry into the field of prefabricated vegetables and Mr. frozen products is expected to become a new growth curve of the company. It is expected that the EPS from 2021 to 2023 will be 2.94/3.99/5.27 yuan, and the current share price corresponding to PE will be 54 / 40 / 30 times respectively. It will be covered for the first time and given a "recommended" investment rating.
Risk tips
Macroeconomic downside risks, Kwai Chung consumption, fast food promotion less than expected, less than expected price increase, expansion of production capacity is less than expected, raw materials rose higher than expected.
