\u3000\u3 Bohai Water Industry Co.Ltd(000605) 337 Zhe Jiang Li Zi Yuan Food Co.Ltd(605337) )
Event:
The company issued its annual report for 2021. During the reporting period, the company achieved a revenue of 1.47 billion yuan, an increase of 35.14% year-on-year; 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%. Among them, the revenue in the fourth quarter was 414 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 above performance is basically consistent with the performance express disclosed by the company in the early stage, which is in line with expectations.
The rising price of raw materials and high selling expenses put pressure on the profit side
In 2021, the growth rate of the company's net profit attributable to the parent company was lower than that of the revenue end, and the sales gross profit margin and net profit margin were 35.88% / 17.86% respectively, with a year-on-year decrease of 3.5% / 9.5%, mainly due to the rise in the prices of raw materials such as large package powder and packaging materials and the increase in expenses. In order to enhance the popularity of Zhe Jiang Li Zi Yuan Food Co.Ltd(605337) brand in the new market, the company's advertising and channel construction expenses were significantly expanded in 2021, and the sales expenses increased by 66% year-on-year.
Classic pieces are enduring, and the effect of national expansion is beginning to show
During the reporting period, the East China market, the company's traditional advantageous region with 53% of revenue, still maintained rapid growth, and the revenue increased by 28% year-on-year in 2021, proving that the power of classic single products has been renewed for a long time. In addition, the revenue of the company's key regions in Central China and southwest China increased by 40.29% / 38.72% year-on-year respectively. The penetration of emerging markets accelerated, and the revenue of South China, North China, northeast and northwest regions doubled. We believe that the positioning of "taste + health" type of sweet milk products is clear, and the differentiated competitive advantage has been preliminarily verified in different regional markets such as income level and eating habits, and the effect of national expansion is beginning to show.
The construction of production capacity and channels is advancing rapidly, and the nationwide expansion is expected to accelerate
In terms of production capacity, the company's five major production bases currently have a planned production capacity of about 350000 tons. Combined with the current projects under construction, the long-term production capacity is expected to exceed Shanghai Pudong Development Bank Co.Ltd(600000) tons. In terms of channels, the company binds high-quality dealers through high channel profits. In 2021, the number of dealers increased steadily to 2650, a significant net increase of 562 compared with 2020, and the retention rate of dealers in the past years is high. With the gradual improvement of production capacity and channel construction, the company is expected to enter the national accelerated expansion period in the future.
Investment advice and profit forecast
Considering the unexpected impact of covid-19 epidemic since 2022 and the price of the company's main raw materials is still at an all-time high, we prospectively lowered the company's profit forecast for 2022 and maintained the profit forecast for 2023. It is expected to achieve an operating revenue of RMB 1.75/21.9/2.63 billion from 2022 to 2024, with a year-on-year increase of 19.10% / 25.00% / 20.00% and a net profit attributable to the parent of RMB 340 / 4.2/520 million, with a year-on-year increase of 30.92% / 22.86% / 22.60%, The corresponding EPS is 1.59/1.95/2.39 yuan and the corresponding PE is 22 / 18 / 14x, maintaining the "buy" rating.
Risk tips
Covid-19 epidemic situation is repeated, the price of raw materials continues to rise, and the production capacity is less than expected
