\u3000\u3 China Vanke Co.Ltd(000002) 216 Sanquan Food Co.Ltd(002216) )
Event: the company disclosed the annual report and the first quarterly report. In 2021, the operating revenue / net profit attributable to parent company / net profit not attributable to parent company deducted was RMB 6.943641/551 billion, with a year-on-year increase of + 0.25% / – 16.55% / – 3.44%, of which Q4 realized operating revenue / net profit attributable to parent company / net profit not attributable to parent company deducted was RMB 1.864/2.55/241 billion, with a year-on-year increase of + 8.24% / + 29.37% / + 39.02%. In 2022q1, the operating revenue / net profit attributable to the parent company / net profit deducted from non attributable to the parent company was 2.343/2.61/240 billion yuan, a year-on-year increase of + 0.49% / + 48.36% / + 39.92%.
Continuous optimization of product and channel structure and good business trend: the company continued to optimize product and channel structure and actively promoted innovation. Under the influence of high base and weak market demand in Q2 and Q3, the revenue increased slightly year-on-year. In terms of products, in 2021, the revenue of Tangyuan dumplings, zongzi / snacks and pastries / quick-frozen conditioning products (instant boiled and roasted) / refrigeration and short-term insurance was 42.1 / 18.2 / 7.5 / 120 million yuan, with a year-on-year increase of – 8.1% / + 10.4% / + 29.7% / + 40.1%. The decline of traditional categories was mainly due to the high base caused by the epidemic, the contraction of the company’s direct business supermarket and the high growth rate of new categories, which was mainly due to the company’s reorganizing products and channels according to the market demand, and the excellent performance of new products. In 2021, the revenue of retail and innovative market / catering market was 5.77/1.17 billion, with a year-on-year increase of – 3.6% / + 24.6%. The company’s catering market development was effective, and the proportion of catering increased by 3.3pct to 16.87% year-on-year.
The reform dividend was gradually released, and the profitability reached a new high: the gross profit margin in 2021 was 27.2%, with a year-on-year increase of -2.7pct, mainly due to the rise in the cost of some raw materials. The gross profit margin of 22q1 was 31.0%, with a year-on-year increase of + 2.4pcts, mainly due to the company’s price increase to alleviate the cost pressure and the increase in the proportion of new products and channels with high gross profit. In 2021, the sales / management expense ratio was 13% / 2.8% respectively, with a year-on-year ratio of – 1.4 / – 0.5pct, and the 22q1 sales / management expense ratio was 14.4% / 2.2% respectively, with a year-on-year ratio of – 1.8 / – 0.2pct. The decline in the expense ratio was mainly due to the improvement of the efficiency of the company’s refined management and the decline in the proportion of direct operators (the revenue of distribution / direct operation / direct operation e-commerce in 2021 was + 4.9% / – 15.8% / 76.2% year-on-year). In 2021, the net interest rate was 9.2%, year-on-year -1.9pct, and the net interest rate of 21q4 / 22q1 was 13.7% / 11.1%, year-on-year + 2.2 / + 3.6pct. The profitability reached a new level with the reform of product channels.
Products, channels and production make concerted efforts to build a new driving force for growth: the company continues to promote channel reform and sinking, shrink direct sales channels with low profitability, eliminate old products with low gross profit, launch new products with high gross profit around the three scenes of meal preparation / rinse and roast / breakfast, and actively layout growth categories such as prefabricated dishes. At the same time, multiple product lines at the production end expand production orderly to escort growth, and the performance can be improved continuously.
Investment suggestion: it is estimated that the company’s EPS in 2022, 2023 and 2024 will be 0.81, 0.94 and 1.08 respectively, and the six-month target price will be 23.5 yuan, corresponding to 25X PE in 2023.
Risk tip: weak demand, fluctuations in raw material costs and intensified industry competition
