\u3000\u3 Shengda Resources Co.Ltd(000603) 288 Foshan Haitian Flavouring And Food Company Ltd(603288) )
Events
At 2 p.m. on April 15, 2022, the company held the 2021 annual general meeting of shareholders in Foshan City, Guangdong Province.
Key investment points
Take multiple measures to reduce the impact, and the impact of community group purchase can be controlled
In 2022, the epidemic continued to occur frequently in many places. The company took the following measures to reduce the epidemic and other external impacts:
1. The catering channel is affected, and the sales end is facing pressure and challenges. At present, the loss of catering sales is made up by accelerating the expansion of residential channels and the breakthrough of online and special channels. Haitian will accelerate sales transformation and strive to achieve double-digit growth target.
2. Reduce the impact of community group buying through adjustment: 1) expand the new retail team and do a good job in online business. 2) Accelerate the layout of professional network channels and expand professional dealers. 3) Vigorously rectify the market environment and improve the ability of dealers. 4) strengthen strategic cooperation with the US, tiktok and other platforms.
3. New categories such as prefabricated dishes: because condiments account for a small proportion of the production cost of prefabricated dishes, prefabricated dish enterprises still process by outsourcing condiments. Therefore, prefabricated dish enterprises are important customers in the company’s food processing channel, increasing the sales of basic condiments of the company to a certain extent.
Vinegar and cooking wine are expected to be in large quantities, and the annual target is expected to be achieved
The categories will expand orderly, and vinegar and cooking wine will be the fourth and fifth categories of the company. After the “Three Five Year Plan”, cooking wine will strive to be the first in the industry, and vinegar will enter the top three in the industry. The company will increase product innovation, continuously launch new products and occupy the market. For new products, the company has adjusted its organizational structure and established a special organization for integration.
The annual sales expense rate is expected to remain stable, and we expect it to remain at 5% – 6%. Considering the impact of the epidemic this year, we believe that the company’s annual revenue and profit growth target of 12% is expected to be achieved.
Profit forecast
We are optimistic about the long-term development of the company. Considering that the price increase is underground, the profit elasticity is prominent, and new categories such as composite seasonings expand new growth points, it is expected to achieve steady growth in 2022. We expect that the EPS from 2022 to 2024 will be 1.81/2.06/2.33 yuan, and the current share price corresponding to PE will be 50, 44 and 39 times respectively, maintaining the “recommended” investment rating.
Risk tips
Macroeconomic downside risks, consumption dragged down by the epidemic, intensified industry competition, capacity construction or utilization less than expected, price increase less than expected, etc.
