\u3000\u3 China Vanke Co.Ltd(000002) 216 Sanquan Food Co.Ltd(002216) )
Key investment points
Event: the company released its annual report for 2021, achieving a revenue of 6.94 billion yuan, a year-on-year increase of 0.2%; The net profit attributable to the parent company was 640 million yuan, a year-on-year decrease of 16.5%, and the net profit not attributable to the parent company was 550 million yuan, a year-on-year decrease of 3.4%. Among them, 21q4 achieved a revenue of 1.86 billion yuan, a year-on-year increase of 8.2%, and a net profit attributable to the parent company of 260 million yuan, a year-on-year increase of 29.4%. At the same time, it is proposed to distribute a cash dividend of 2.00 yuan (including tax) for every 10 shares.
Rinse roast foreign exchange and short-term insurance maintained high growth, and the catering market performed well. In terms of products, the company’s quick-frozen noodle rice products achieved a revenue of 6.03 billion yuan, a year-on-year decrease of 3.2%; Among them, the income of traditional rice flour products represented by Tangyuan and dumplings was 4.21 billion yuan, a year-on-year increase of – 8.1%, and the income of new pastries represented by dim sum and milk yellow bag maintained a positive growth of 1.82 billion yuan, a year-on-year increase of + 10.4%. Thanks to customized services for large supermarkets and the development and deepening of cooperation with CVs strategic partners, quick-frozen prepared food and refrigerated short-term insurance products showed a rapid growth trend, with revenue of 750 / 120 million yuan respectively, a year-on-year increase of + 42% / + 40.2%. By market, the retail and innovation markets achieved a revenue of 5.73 billion yuan, a year-on-year increase of – 4.3%; The catering market benefited from the effective control of the epidemic and the development of emerging channels such as ready-made tea and drinks, with an annual revenue of 1.17 billion yuan, a year-on-year increase of + 24.6%. In terms of sub channels, on the basis of maintaining the steady growth of distribution channels, the company continued to promote the loss reduction of direct Ka channels, and increased the development of online channels. The revenue of online distribution / direct / direct e-commerce channels was 5.12/16.2/160 billion yuan respectively, with a year-on-year increase of + 5% / – 15.8% / + 76.2% respectively. In terms of sub regions, the market performance of the north part of the base camp is stable, with a year-on-year revenue of + 7.4%; The income growth of the East / South / West District has declined to varying degrees. In the past 20 years, the company has greatly expanded the number of dealers. In the past 21 years, the company slowed down the pace of investment attraction and focused on the cultivation and empowerment of new dealers. At the end of 21, the number of dealers increased by 16 to 5638.
The price of raw materials continued to rise, reducing fees and improving efficiency, driving the improvement of profitability. In 2021, the company’s gross profit margin was 27.2%, down 2.7pp year-on-year, of which 21q4 gross profit margin was 30%, up + 20.9pp year-on-year. The decline of gross profit margin in the whole year was mainly due to 1) the continuous rise in the prices of flour, oil and other main raw materials; 2) The company increased its efforts to sink the channels of the farmers’ market and increased the proportion of high-capacity cost-effective products; Benefiting from the price increase, Q4 gross profit margin rebounded significantly. In terms of cost rate, the company took the initiative to optimize the traditional channel structure, superimposed and contracted the advertising cost, and the annual sales cost decreased by 1.4pp to 13% year-on-year; The management expense ratio remained stable, with a slight year-on-year decrease of 0.5pp to 2.8% due to the changes of personnel salary and personnel funds. Under the continuous pressure on the cost side, the company actively carried out product structure upgrading, cost reduction and efficiency improvement, and the overall net interest rate of the whole year decreased by 1.9pp to 9.2%.
Equity incentives have boosted enthusiasm, and the implementation of reform has been revitalized. 1) In terms of channels, the company will continue to promote channel reform and sinking. On the one hand, it will attack farmers’ trade and low-line markets with the help of cost-effective products such as green label and fumanji; On the other hand, we will strengthen the development of new catering channels and continue to improve the penetration of catering channels. 2) In terms of products, rice noodles pay attention to cultivating new pastry products with great potential, and hot pot ingredients continue to increase the proportion of self-produced products on the basis of stabilizing the supply chain; In addition, the company continues to deepen cooperation with 711, HEMA and other platforms, and the fresh food business will maintain rapid growth. 3) The company implemented equity incentive at the end of the 21st year, with wide target coverage and steady growth target setting, which is conducive to deeply binding the future development of the company with the interests of the core management, effectively boosting the confidence and vitality of the team. The company’s position as a leader in the industry can be gradually expanded in the next period of rapid freezing, and the company’s performance can be improved in the future.
Profit forecast and investment suggestions. It is estimated that the EPS from 2022 to 2024 will be 0.82 yuan, 0.95 yuan and 1.06 yuan respectively, and the corresponding dynamic PE will be 20 times, 18 times and 16 times respectively, maintaining the “buy” rating.
Risk tips: raw material price fluctuation risk, covid-19 epidemic recurrence risk, and intensified industry competition risk.
