\u3000\u3 Shengda Resources Co.Ltd(000603) 866 Toly Bread Co.Ltd(603866) )
Key investment points
Event: the company released the first quarter report of 2022. In the first quarter, the company achieved a revenue of 1.45 billion yuan, a year-on-year increase of 9.4%, and a net profit attributable to the parent company of 160 million yuan, a year-on-year decrease of 2.8%, which is in line with the disclosure of performance forecast.
Bread products grew steadily, and the nationwide layout was gradually improved. 1. By category, bread and pastries achieved an operating revenue of 1.45 billion yuan, a year-on-year increase of 9.2%. The mellow series of star products grew steadily, and new rock baked cakes, cheese bread, pastry bread, cranberry slices and other products increased rapidly, and the competitiveness of products continued to improve; New bread products are gradually put on the market to further meet the needs of consumers. 2. In terms of subregions, North China, Northeast China, East China, central China, Southwest China, Northwest China and South China achieved operating revenue of 330 million yuan (+ 5.5%), 610 million yuan (+ 2.2%), 390 million yuan (+ 33.6%), 42.17 million yuan (+ 14.4%), 180 million yuan (+ 4.6%), 110 million yuan (+ 19.2%) and 120 million yuan (+ 11.1%) respectively. In new markets such as East China and South China, the investment in key customers continues to increase and the quality of single stores continues to be improved; Northeast, North China and other mature markets accelerated the refinement and sinking of channel network; The company will further expand the southwest market and Xinjiang market and further improve the national layout. In terms of dealer development, by the end of 2022q1, the company had 903 dealers, with a net increase of 63.
Raw material prices rose and profitability continued to be under pressure. 1. The overall gross profit margin was 25.6%, with a year-on-year decrease of 0.9pp, mainly due to: 1) the rise in the cost of some raw materials; 2) The cost of terminal distribution services increased. 2. In terms of expense ratio, the sales expense ratio was 8.4%, a year-on-year decrease of 0.8pp; The management fee rate was 2.2%, with a year-on-year increase of 0.2pp; The R & D expense ratio was 0.5%, with a year-on-year increase of 0.3pp; The financial expense rate was 0.1%, with a year-on-year increase of 0.7pp, mainly due to the higher exchange benefits and financial benefits in 2021q1. The overall net interest rate was 10.9%, down 1.4pp year-on-year.
Nationwide construction of production bases and steady progress in capacity expansion. 1. In terms of market, the company has established production bases in 20 regions across the country and radiated sales to the surrounding areas; Continue to increase investment in mature markets in North China and Northeast China, further tap market potential, consolidate and improve market share. 2. In terms of production capacity, gradually promote the expansion of production capacity. The production bases in Shenyang, Zhejiang, Qingdao, Quanzhou, Guangxi and Changchun are under construction, and it is expected to gradually release 292000 tons of new production capacity. Expanding production capacity will better meet the downstream demand, form the scale effect of production and sales in the mode of “central factory + wholesale” and improve profitability.
Profit forecast and investment suggestions. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 850 million yuan, 940 million yuan and 1.04 billion yuan respectively, and the EPS will be 0.89 yuan, 0.99 yuan and 1.09 yuan respectively. The corresponding dynamic PE will be 24 times, 22 times and 20 times respectively, maintaining the “hold” rating.
Risk warning: the price of raw materials may fluctuate sharply; Risk of market development failing to meet expectations.
