\u3000\u3 Shengda Resources Co.Ltd(000603) 288 Foshan Haitian Flavouring And Food Company Ltd(603288) )
The highlights of this report are as follows: 1) a more detailed review of Haitian’s past successful experience; 2) This paper makes a more detailed analysis of the three subdivided industries of soy sauce, oyster sauce and sauce, including discussing the competition pattern of soy sauce industry from the perspective of quantity; 3) The channel advantages and supply chain advantages of the company are discussed in more detail, including the construction of indicators to compare the channel leverage of various consumer goods companies.
After more than 60 years of trials and hardships, it has finally become an absolute leader in the condiment industry, with a brilliant business performance. 1) In the early stage of the industry development, the company was only one of many local soy sauce enterprises, but its multiple leadership in incentive mechanism, development strategy and channel mode made it the absolute leader in the condiment industry, with a revenue of 25 billion in 21 years; 2) After listing, the company’s organizational vitality still exists. Driven by excellent management team and strong incentive, the company’s business performance is bright, with 13-20 years of revenue / profit cagr15 3% / 21.8%, achieving relatively steady growth in 21 years despite the difficulties of the industry, with revenue / profit yoy + 9.7% / + 4.2%
The condiment industry has a considerable scale, with steady growth driven by volume and price, and the Growth Logic of leading companies in the subdivided industry has been differentiated. 1) Condiment is a mandatory attribute and the scale of the industry is considerable. Driven by the increase in volume (stable expansion of demand + increase in the proportion of catering) and price increase (mainly direct price increase, supplemented by indirect price increase; the indirect price increase first affects the family end, and then slowly infiltrates into the whole industry), the growth rate of the industry is expected to remain stable. 2) The development stages of each subdivided industry are differentiated, and the growth drivers of head companies are also different. ① Soy sauce: the industry has entered a mature stage. It is estimated that the total soy sauce sales volume of the top five enterprises in the industry in 20 years is 3554450000 tons, and Cr5 is expected to be high. In terms of volume, the integration of the share of small and medium-sized brands and price increase are the main growth drivers of the leading companies in the industry; ② Oyster sauce: the industry is still in the stage of rapid increase in penetration, and the head company is expected to enjoy the development dividend of the industry; ③ Sauce: at present, the industry concentration is low, the expansion space is large, and the characteristics of a wide variety determine that companies in the industry are suitable for taking the route of driving large single products.
The company has outstanding advantages in products, brands, channels and supply chain. 1) Channel: we think we can understand the company’s channel advantages from three perspectives: ① breadth and depth: the breadth and depth of the company’s channel coverage far exceed that of the same industry, and it is expected that it will take more than ten years for the same industry to catch up; ② Grasp the catering channels with high stickiness: the catering end is characterized by large consumption, strong stickiness and high channel barriers (due to dependence on second batch distribution). Haitian’s volume at the catering end is much higher than that of its competitors, which is equivalent to grasping the channels with the highest consumption, strong stickiness and difficult to overcome; In addition, the company’s advantages in the product side and brand endorsement also continue to support its competitive advantage in the catering side. ③ High channel leverage brought by strong management and control ability: the number of dealers / sales personnel, distribution income / sales personnel and other indicators of the company are much higher than those of peers and other consumer goods companies, and the channel leverage is high, reflecting the strong management and control ability of the company on the channel. 2) Products: the company has cultivated five large flow single products with an annual sales value of more than 1 billion, and the product matrix is perfect (covering various product types / specifications / price bands), which brings strong customer stickiness to the company. 3) Supply chain: the company’s supply chain capability is outstanding, among which we have summarized two core points: ① cost control capability; ② Platform based capability: R & D capability, product promotion capability, etc. On the one hand, strong cost control ability brings cost intensification to the company and supports the expansion of the company in cost-effective products; On the other hand, the platform capability supports the company to continuously improve the product matrix and bring forth the new products.
Profit forecast and investment suggestions
We give the company’s EPS of 1.78/2.10/2.45 yuan for 22-24 years respectively. Using the historical valuation method, take the PE average of the company in the past five years, give 61 times the valuation for 22 years, corresponding to the target price of 108.58 yuan, and give “buy rating” for the first time.
Risk tips
The epidemic has been repeated, the recovery of consumption is less than expected, the price of raw materials has risen sharply, food safety and industry competition have intensified.
