\u3000\u3 Shengda Resources Co.Ltd(000603) 866 Toly Bread Co.Ltd(603866) )
Event: the company released the first quarter report of 2022. In 2022q1, the company realized an operating 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 decrease of 2.80%.
Under the pressure of the epidemic, the revenue increased steadily, and the overall situation became stable and good. In terms of products, the operating revenue of the company’s bread and pastry was 1.449 billion yuan, a year-on-year increase of 9.19%; Other income is 30 million yuan, and the main business is stable. In terms of subregions, the company continued to plough deeply in the mature market. In 22q1, the Northeast / North China achieved a revenue of 608 / 333 million yuan, with a year-on-year increase of 2.18% / 5.71%. The North China market grew steadily. We judge that the slow growth of the Northeast market is mainly due to the repeated epidemic and limited logistics and transportation. While consolidating the strategic cooperation with Yonghui, China Resources Wanjia, Wal Mart, RT mart and other large KAS at home and abroad, the company continues to accelerate the refinement and sinking of sales network and consolidate the advantages of mature markets. In addition, the company actively expands the southwest and northwest markets on the basis of continuously focusing on the development of East and South China markets. The revenue in East / South China / Southwest / northwest regions is 389 / 119 / 183 / 107 million yuan respectively, A year-on-year increase of 33.22% / 11.21% / 4.57% / 18.89%. Using the market operation experience of mature regions and relying on the central city, the company expands to foreign markets, cultivates channels and strengthens terminals. At present, the market development in East China is progressing smoothly and the growth rate is brilliant. Both South China and Northwest China have achieved rapid growth of more than double digits.
The cost and freight rise, and there is still pressure on the profit side. The company’s 22q1 gross profit margin was 25.62%, down 0.94pct year-on-year; The rates of sales / management / Finance / R & D expenses were 8.45% / 2.74% / 0.13% / 0.52% respectively, with a year-on-year change of -0.77 / + 0.53 / + 0.70 + 0.31pct, and the overall expense rate remained stable. The company realized a net profit attributable to the parent company of 158 million in 22q1, a year-on-year decrease of 2.80%. The decline in profits was mainly due to: ① the increase in the price of raw materials such as oil and flour and the increase in terminal distribution service expenses led to a slight decrease in the company’s gross profit margin in the current period; ② In the same period last year, the company’s exchange income and financial management income were higher than that in the current period. Looking forward to the whole year of 22 years, there is still pressure on the profit side of the company, but compared with the fluctuation and decline in 21 years, the decline range may be gradually narrowed. With the gradual conduction and landing of the company’s product price increase at the end of 2021, the effect of price increase on the profit side is expected to be released gradually.
The company has deep industry barriers, and the promotion of nationalization promotes the realization of the double ten goals. The company has been deeply engaged in the bread industry for more than ten years, and has formed the large-scale comprehensive cost and efficiency advantages of the industrial chain from procurement, production, supply, sales and other links. The dealer channel education and supply chain management are mature. Looking forward to 22 years, the market growth momentum in East China and South China is good. With the gradual promotion of production base projects in Zhejiang, Shenyang, Qingdao, Quanzhou, Guangxi and Changchun, the production capacity is released in an orderly manner and the national layout is accelerated, which will help the company achieve the double ten growth goal of revenue and profit.
Profit forecast: at present, under the repeated epidemic and cost pressure, the profit expectation is slightly adjusted. It is expected that the company will achieve a revenue of 7.07/81.4/9.37 billion yuan from 2022 to 2024, with a year-on-year increase of 11.6% / 15.1% / 15.1%; The net profit attributable to the parent company was adjusted from 8.6/9.9/11.6 to 8.4/9.8/1.15 billion yuan, with a year-on-year increase of 10.4% / 16.6% / 16.8%, and EPS of 0.88/1.03/1.21 yuan / share, maintaining the “buy” rating.
Risk warning: macroeconomic downside risk; Covid-19 epidemic risk; Risk of rising costs
