\u3000\u3 Shengda Resources Co.Ltd(000603) 866 Toly Bread Co.Ltd(603866) )
Event overview
Toly Bread Co.Ltd(603866) released the performance of 2022q1, realizing a revenue of 1.45 billion yuan, a year-on-year increase of + 9.4%. The net profit attributable to the parent company was 158 million yuan, a year-on-year increase of – 2.8%.
Analysis and judgment:
1. Q1 company’s revenue was + 9.4% year-on-year, which was higher than that of 2h21. Combined with Nielsen’s terminal retail data, we judged that from January to February, it was in the process of sales acceleration, but the trend was interrupted by the epidemic in March. The epidemic broke out in Jilin in mid and late March. We judged that it had a certain impact on the sales of peach and plum in the northeast region. Q1 Northeast regional revenue + 2.2% year-on-year, slower than the company as a whole. Jilin lifted the closure on April 14, and it is expected that the northeast region of Taoli will also show an improvement trend after that. Q1 East China’s revenue increased by + 34% year-on-year. In the past two years, it is in the process of market development and has a rapid growth rate. The Shanghai epidemic is expected to have a small impact on the income of Q1 in East China, and the main impact will be reflected in April. In the follow-up, we will look at the changes of epidemic sealing and control policies. In other regional markets, Q1 revenue growth in Northwest China, central China and South China is faster than the whole, and Q1 revenue growth in Northwest China has increased significantly month on month; The central and South China markets have maintained steady and rapid growth for several consecutive quarters on the basis of low base; The year-on-year growth rate of markets in North China and southwest China was slower than that of the whole.
2. In terms of profitability, the net interest rate attributable to the parent company in Q1 was 10.9%, with a year-on-year increase of -1.4pct. Among them, the gross profit margin was -0.9pct year-on-year, the sales expense rate was -0.8pct year-on-year, the management expense rate was + 0.2pct year-on-year, the R & D expense rate was + 0.3pct year-on-year, and the financial expense rate was + 0.7pct year-on-year. Since the middle of January this year, due to the influence of the Russian Ukrainian war, the market price of flour, the main raw material, has increased significantly, with a year-on-year increase of more than + 25%; Oil prices remain high; High oil prices also raise transportation costs. Under this cost environment, the gross profit margin of Q1 company is still relatively stable. We judge that it is due to the locking price on the cost side and the slight price increase on the product side. The sales expense ratio decreased slightly, hedged the decline in gross profit margin, and the gross sales difference was basically stable. The fluctuation range of other cost rates is small. The overall cost control ability of the company is better.
Investment advice
In 2022q1, the revenue growth rate of the company has increased, and the company has still achieved a relatively stable profit level in the environment of significant rise in the prices of raw materials and transportation. Looking ahead to Q2, it is expected that the epidemic situation in Jilin and Shanghai will have a certain negative impact on the company’s sales and find the bottom of the fundamentals. If the epidemic risk is relieved, it is expected to rebound. Considering the impact of the epidemic, the income forecast for 202223 is lowered from 7.6/8 billion yuan to 7.0/8 billion yuan, the net profit attributable to the parent is predicted to be 1.14/1.35 billion yuan to 8.3/9.8 yuan, the income forecast for 2024 is increased by 9.1 billion yuan, the net profit attributable to the parent is 1.16 billion yuan, and the EPS in 202224 is 0.87/1.02/1.22 yuan respectively. The closing price of 2022 / 4 / 20 is 21.61 yuan, corresponding to 25 / 21 / 18 times of P / E in 202224 respectively. It has cost performance and maintains the overweight rating.
Risk tips
① the sales of new products at normal temperature is less than expected; ② The duration of the epidemic is too long; ③ Market competition intensifies risks; ④ Food safety issues.
