\u3000\u3000 Juewei Food Co.Ltd(603517) (603517)
The third quarterly report showed steady growth, and the investment income thickened the profit
The company’s 2021q1-q3 revenue was 4.85 billion yuan, an increase of 24.7% at the same time; The net profit attributable to the parent company was 960 million yuan, an increase of 85.4% at the same time; Deduct RMB 9.27 for non, with an increase of 83.5% at the same time. Among them, the revenue of 2021q3 was 1.7 billion yuan, an increase of 15.7%; The net profit attributable to the parent company was 460 million yuan, an increase of 88.2%. Among them, 2021q3 achieved an investment income of RMB 272 million, including RMB 110 million from the transfer of equity of Jiangsu Hefu and RMB 100 million from the investment income confirmed by Zhengzhou Qianweiyangchu Food Co.Ltd(001215) listing. Excluding the impact of investment income and equity expenses, we expect the growth rate of net profit in 2021q3 to be about 10%.
The goal of expanding stores was successfully completed and the market share was accelerated
Since the epidemic in 2020, the company has accelerated the pace of opening stores. In 2020, the company has increased 1445 stores to 12399, occupying the market share of regional small brands and further improving the industry concentration. In 2021h1, the company opened 13136 stores in total. We expect that the company will successfully complete the plan of opening 1200-1500 stores throughout the year. The company will further strengthen its leading position in the halogen products industry and further increase the market share of competitive products.
The three-year target of equity incentive is locked, and the target of fixed increase, expansion and guarantee is realized
The company issued the equity incentive plan at the end of January 2021, agreed to take March 8, 2021 as the first grant date of restricted shares, and agreed to grant 5.598 million shares (excluding the reserved part) of restricted shares to 124 incentive objects at the price of 41.46 yuan / share. At the end of November, the company granted 488300 shares to 19 people at 32.77 yuan / share on November 29. The equity incentive target requires that the revenue in 2021 shall not be less than 25%, and the revenue growth rate from 2022 to 2023 shall not be less than 20% and 20% respectively. The total expenses of restricted shares for the two times are RMB 185 million, with amortization of RMB 90 million, RMB 64 million, RMB 25 million and RMB 05 million respectively from 2021 to 2024.
The company issued a fixed increase plan in August 2021, and plans to raise 2.384 billion yuan for 65700 tons of halogenated meat products in Guangdong Ahua, 30000 tons of halogenated meat products in Jiangsu ahui, 25000 tons of halogenated meat products in Guangxi ahxiu, 13000 tons of halogenated meat products in Panshan ahmiao, 10000 tons of halogenated meat products in Hunan areI and 16300 tons of halogenated meat products in Sichuan aning. We expect that if the fixed growth plan is adopted, it will effectively improve the company’s automatic production level, expand the company’s capacity and effectively alleviate the company’s capacity bottleneck.
Profit forecast
For a long time, the company has adhered to the development strategy of “deeply cultivating the main business of duck neck, building a food ecology and striving to build a first-class characteristic food platform”: 1) adhere to the main business of duck neck and improve the market share of duck neck: upgrade from “horse racing, enclosure and saturation store opening” to “deep coverage and intensive channel cultivation”, and further improve the market share through step-by-step compound saturation store opening, Consolidate the company’s leading position in the industry; 2) Expand product categories based on subdivided tracks; 3) Build a food Ecology: focus on the core track of Luwei, take the project as the center, service as the driving force, result as the guidance, and work closely with the main business to form a “endogenous + extension” and “industry” supporting the company through investment incubation and capital integration × The “dual engine” of strategic capital growth.
Adhering to the strategic policy of “deeply cultivating the main business of duck neck and building a food ecology”, the company has opened up its core capabilities such as supply chain network, chain channel management and control and organizational capacity-building, empowered partners through “industrial investment + value-added services” to grow together with the enterprise, Through the “six Communists” coordination (shared procurement, shared storage, shared capacity, shared distribution, shared sales system and shared intellectual resources), we are committed to becoming the “accelerator of characteristic food and light catering” to achieve symbiosis, CO creation and win-win. The company cooperates with external professional investment institutions through online gathering investment, focuses on industrial tracks closely related to the company’s core strategy, such as halogen flavor, characteristic flavor condiments and light catering, explores and distributes the company’s “second and third growth curves” in the future, and finally realizes the goal of “building food ecology”.
We are optimistic that the leading position of the company’s Halogen products is becoming more and more stable, and strengthen the advantages of the supply chain to enable the food ecosystem; Without considering the impact of additional issuance, we expect EPS to be 1.86/2.11/2.59 yuan from 2021 to 2023, and the current share price corresponding to PE is 32 / 28 / 23 times respectively. It is covered for the first time and given a “recommended” investment rating.
Risk tips
Macroeconomic downside risk, epidemic drag on consumption, store development is less than expected, raw material rise risk, additional issuance progress is less than expected, etc.
