\u3000\u3 Shengda Resources Co.Ltd(000603) 866 Toly Bread Co.Ltd(603866) )
Event: on April 18, the company released the first quarterly report of 2022. 22q1 achieved a revenue of 1.452 billion yuan, a year-on-year increase of + 9.43%; The net profit attributable to the parent company was 158 million yuan, a year-on-year increase of – 2.98%. The basic EPS is 0.17 yuan.
The revenue of 21q1 started steadily, and the revenue growth in new markets was high. On the revenue side, the company’s 22q1 revenue increased at a medium and low speed year-on-year, the main business operation was generally stable, and the revenue growth in new markets was high. On the profit side, the net profit attributable to the parent company in 22q1 decreased slightly year-on-year, mainly due to: (1) the price rise of some raw materials such as wheat and oil; (2) The increase of terminal distribution service cost led to a slight year-on-year decrease in gross profit margin; (3) The exchange income of 21q1 is positive, and the higher interest expense of 22q1 leads to the obvious increase of financial expense rate.
In terms of regions, the revenue growth rate of 22q1 East / central / Northwest / South China market was high, with revenue of RMB 389 / 0.42 / 107 / 119 million respectively, with a year-on-year increase of + 33.57% / + 14.42% / + 19.15% / + 11.13% respectively. The growth rate of market revenue in East China exceeded 30%, which is expected to be due to: (1) the company actively explored the East China market, and the number of dealers increased significantly year-on-year; (2) The new production capacity in East China was gradually put into operation, resulting in a significant increase in revenue. New markets such as central China, Northwest China and South China are still in the development stage, with high income growth. 22q1 North China / Northeast / Southwest China achieved a revenue of 333 / 608 / 183 million yuan, a year-on-year increase of + 5.49% / + 2.15% / + 4.63%. Stable demand in mature markets such as North China, Northeast China and southwest China has led to low revenue growth and stable market share. Overall, North / Northeast / East China is the core source of income, with a total income of 1.33 billion yuan.
In terms of dealers, at the end of 22q1, there were 157 / 268 / 217 / 124 / 59 / 48 / 30 dealers in North / Northeast / East / Southwest / Northwest / South / Central China respectively, with a year-on-year increase of + 3.29% / + 2.68% / + 21.91% / – 2.36% / + 5.36% / + 2.13% / + 57.89%. The market in East China and central China has strengthened its development, and the number of dealers has increased significantly year-on-year; The number of dealers in other markets remained stable.
The gross profit margin decreased slightly year-on-year, and the expense rate increased significantly during the period. 22q1 company’s gross profit margin is 25.62%,
Year on year -0.95ppt, the reasons for the slight decline in gross profit margin are as follows: (1) the prices of some raw materials such as wheat and oil are rising; (2) The cost of logistics distribution increased year-on-year.
The sales expense ratio of 22q1 company was 8.45%, with a year-on-year increase of -0.77ppt, which was due to the reduction of sales expense investment and product discount. The management fee rate was 2.22%, with a year-on-year increase of + 0.21ppt. The R & D expense rate was 0.52%, with a year-on-year increase of + 0.32ppt, due to the year-on-year increase in R & D investment. The financial expense rate was 0.13%, year-on-year + 0.70ppt, which was due to the positive exchange income in 21q1 and the year-on-year increase in borrowing interest costs in 22q2.
Investment suggestion: it is estimated that the company will achieve a revenue of 7.112/80.52/9.036 billion yuan and a net profit attributable to the parent company of 8.53/9.62/1.077 billion yuan in 22-24 years, which is equivalent to 0.90/1.01/1.13 yuan of EPS respectively. At present, the stock price corresponds to 24 / 21 / 19 times of PE in 22-24 years. The current valuation of the company is equivalent to the overall valuation level of 24 times in the leisure food sector in 22 years. The company is a leading company in the bread baking industry, with a stable market position, continuous release of production capacity and good medium and long-term growth. To sum up, maintain the “recommended” rating.
Risk tip: the business expansion speed is lower than expected, the consumption tendency of residents decreases, the cost rise is higher than expected, food safety problems, etc.
