\u3000\u3 Bohai Water Industry Co.Ltd(000605) 337 Zhe Jiang Li Zi Yuan Food Co.Ltd(605337) )
The company issued the annual report of 2021 on April 18, 2022. In 2021, the company realized an operating revenue of 1.47 billion yuan, a year-on-year increase of 35.14%; The net profit attributable to the parent company was 262 million yuan, a year-on-year increase of 22.34%; The net profit attributable to the parent company after deduction was 243 million yuan, a year-on-year increase of 22.73%, and the performance in the first year of listing was stable. In the fourth quarter of 2021, the company realized an operating revenue of 415 million yuan, a year-on-year increase of 14.86%; The net profit attributable to the parent company was 68 million yuan, a year-on-year decrease of 4.35%; The net profit attributable to the parent company after deducting non-profit was 63 million yuan, a year-on-year decrease of 9.36%.
Milk containing drinks grew steadily and the development of peripheral markets was accelerated. By product: the revenue of milk beverage / milk flavor beverage / compound protein beverage / other categories was 14.27/0.2/0.05/0.12 billion yuan respectively, with a year-on-year increase of + 36.64% / + 173.63% / 12.29% / – 43.15%. The company adheres to the basic sector of milk containing drinks, with annual revenue accounting for 97.45%, year-on-year + 0.55pct, and other categories accounting for 2.55%. In terms of sub regions, East China / Central China / Southwest China, the top three sales regions of the company, are mature markets, with annual revenue of 782 / 287 / 245 million yuan respectively, with a year-on-year increase of + 27.7% / + 40.29% / + 38.72%, and still maintain benign growth under the high base. Most of the mature markets are China’s economically developed or densely populated provinces, accounting for 90% of the annual revenue. There is still much room for further exploration in the market. In addition, North China / South China / Northwest / northeast region is a peripheral market, with an annual revenue of 100 million, a year-on-year increase of + 155.4%, accounting for 10.3% of the annual revenue. Since 2021, the growth rate has been rapid. In the future, as a target area for further expansion of the company, it will provide development power for the national layout of the company.
The cost side pressure transmission superimposes the initial cost of channel expansion, and the profit side is under pressure. The company’s gross profit margin in 2021 was 35.88%, a year-on-year decrease of 1.30pct. The expense rate during the period was 14.62%, with a year-on-year increase of 0.57pct. Among them, the sales / management / financial expense rates were 11.36% / 5.08% / – 1.82% respectively, with a year-on-year increase of + 2.12pct / + 0.30pct / – 1.84pct. The net interest rate was 17.86%, a year-on-year decrease of 1.87pct. The double drop in gross profit and net interest rate was mainly affected by the rising purchase cost of large package powder, white granulated sugar and packaging PET bottles, pressure conduction and the initial cost investment of national expansion.
Diversified product matrix, nationwide capacity layout, cost reduction and efficiency increase. In terms of new products, following the 280ml series of new products “fruit and vegetable yogurt”, “milk coffee” and “coconut milk” launched in 2021, This year, it is planned to add “peach flavor”, and 280 series will still be the main new products; meanwhile, aseptic filling (cup filling) will be launched in 2022 New product series such as large fruit yoghurt milk beverage products and sports nutrition food gradually enrich product tastes and forms, expand consumer groups and scenes, and contribute to the increment of revenue. In terms of production capacity, the company’s five major production bases currently have a production capacity of 400000 tons. New bases are under construction in Longyou, Zhejiang, Shanggao, Jiangxi and Qujing, Yunnan. It is expected that they will reach Shanghai Pudong Development Bank Co.Ltd(600000) tons after completion. In the future, the company will still plan new production bases according to needs, opportunities and places. We believe that the nationwide production capacity layout will effectively shorten the transportation time, save the transportation cost, and strengthen the scale effect to reduce costs and increase efficiency.
Special channels in mature markets are constantly enriched, targeted products are launched, and small catering channels are mainly expanded. 2022 is the first year of the company’s nationwide layout. We believe that the future increment of mature markets comes from the accelerated sinking of circulation channels and the expansion and enrichment of special channels. While doing a good job in refining the existing channel terminals and building the image, the company has expanded the small catering channels (such as barbecue shops, Malatang, dumpling restaurants, large stalls, etc.) through the products developed by the company for small catering, so as to improve the market share, and promote the popularity, scale and brand influence through various promotions. The peripheral market adopts the way of first special communication and then circulation, and cooperates with certain channel cost inclination.
Investment suggestion: it is estimated that the company will realize revenue of RMB 1.88/23.5/2.87 billion from 2022 to 2024, with a year-on-year increase of + 28.4% / + 24.7% / + 22%; The net profit attributable to the parent company was 331 / 424 / 522 million yuan, a year-on-year increase of + 25.9% / + 28.4% / + 23%, EPS was 1.53/1.96/2.41 yuan respectively, and the corresponding PE was 23x / 18x / 14x respectively. Considering that the short-term cost pressure of the company is controllable, the types of special channels are continuously enriched in the medium term, the long-term national layout is continuously promoted, and the “recommended” rating is maintained.
Risk tip: the epidemic affects consumption, industry competition intensifies, and raw material prices rise.
