\u3000\u3 China Vanke Co.Ltd(000002) 216 Sanquan Food Co.Ltd(002216) )
Event: on April 18, the company released its annual report for 2021, with annual revenue of 6.943 billion yuan, a year-on-year increase of + 0.25%; The net profit attributable to the parent company was 641 million yuan, a year-on-year increase of – 16.55%. The basic EPS is 0.73 yuan. Q4 achieved a revenue of 1.864 billion yuan, a year-on-year increase of + 8.24%; The net profit attributable to the parent company was 255 million yuan, a year-on-year increase of + 29.37%.
The company has actively adjusted its product and channel structure, and its operating performance has improved quarter by quarter in the past 21 years. On the income side, 21q1 was affected by the high base during the 20-year epidemic period, and the income increased at a low rate year-on-year; The weak market demand of 21q2 / 21q3 led to a year-on-year decline in revenue. The company improved its operation by adjusting the stock product and channel structure, promoting new products, tapping potential efficiency and other measures, and the revenue growth picked up quarter by quarter; 21q4 revenue resumed growth, with a year-on-year increase of + 8.24%. On the profit side, affected by the high base during the 20-year epidemic, the profits of 21q1 ~ 21q3 decreased year-on-year, but the decline range gradually narrowed; 21q4 profit resumed growth, with a year-on-year increase of + 29.37%. It is expected that in 2022, with the gradual release of the company’s new channel layout and new product reserves, the good trend of operation since 21q4 will continue.
In terms of products, the income of quick-frozen rice noodles / quick-frozen preparation / refrigerated short-term insurance products in 21 years was 6.032746/123 billion yuan, a year-on-year increase of – 3.19% / + 29.67% / + 40.15%; In total, 21h2 achieved revenue of RMB 2.815503/066 billion, a year-on-year increase of + 2.18% / + 31.69% / + 21.34%. Affected by the high base of 20 years, the company’s quick-frozen rice noodle products fell slightly year-on-year. The quick-frozen modulation and cold storage short-term insurance products achieved rapid growth, and the product structure was further improved; In 21h2, the revenue of all product categories resumed growth. In the past 21 years, the sales of quick-frozen rice noodles / quick-frozen preparation / refrigerated short-term insurance products were 5961 / 5.45 / 7200 tons, with a year-on-year increase of -1.69% / + 12.52% / + 31.58%; The average selling price is 1.01/1.37/1.71 (10000 yuan / ton), with a year-on-year increase of – 1.53% / + 15.24% / + 6.51%. The volume and price of quick-frozen rice noodles decreased slightly year-on-year; The volume and price of quick-frozen, prepared and refrigerated short-term insurance products rose year-on-year.
The year-on-year decline in gross profit margin dragged down the profit performance, and the expense rate during the period decreased year-on-year. The gross profit margin of the company in 21 years was 27.17%, year-on-year -2.70ppt (21q4 was 30.02%, year-on-year + 20.91ppt). The main reason for the decline of gross profit margin is that the income is flat year-on-year, and the rise of raw materials, direct labor and manufacturing expenses cannot be effectively diluted. The company’s sales expense rate in 21 years was 12.98%, year-on-year -1.44ppt (21q4 was 10.32%, year-on-year + 20.17ppt), which was due to the optimization of traditional channel structure and the growth of emerging channels. The management expense ratio was 2.83%, with a year-on-year increase of -0.54ppt (21q4 was 2.04%, with a year-on-year increase of -0.60ppt), which was due to changes in personnel compensation and personnel funds. The R & D expense rate was 0.79%, year-on-year + 0.09ppt (21q4 was 1.54%, year-on-year + 0.46ppt). The financial expense rate was -0.13%, with a year-on-year rate of -0.04ppt (21q4 was -0.06%, with a year-on-year rate of -0.25ppt), which was due to the year-on-year increase in net capital income.
Investment suggestion: it is estimated that the company will achieve revenue of 7.992/91.36/10.396 billion yuan and net profit attributable to the parent company of 7.17/806908 billion yuan in 22-24 years, equivalent to EPS of 0.82/0.92/1.03 yuan respectively. At present, the corresponding share price of PE in 22-24 years is 21 / 18 / 16 times. The current valuation of the company is 31 times lower than the overall valuation level of the frozen food sector in 22 years. The company is a leading company in the frozen industry. In 2022, it will focus on the development of new categories and the layout of new channels, with good medium and long-term growth. Maintain a “recommended” rating.
Risk tip: Residents’ consumption propensity decreases, cost increases exceed expectations, food safety problems, etc.
