\u3000\u3 China Vanke Co.Ltd(000002) 216 Sanquan Food Co.Ltd(002216) )
Event: the company released the first quarterly report of 2022. 22q1 achieved a revenue of 2.343 billion yuan, yoy + 0.49%; Net profit attributable to parent company was 261 million yuan, yoy + 48.36%; Deduct 240 million yuan of non net profit, yoy + 39.92%.
The revenue side remains stable under the high base, and the demand for epidemic catalysis is expected to improve month by month. The flat income is in line with expectations. Considering the local New Year atmosphere in 21q1, the overall income base of popular products is high. This year, according to the channel research feedback, affected by the repeated epidemic situation and intensified industry competition in January of 22, the industry demand showed a certain fatigue, and the three full income may decline slightly from January to February. In March, the epidemic situation in East China and Northeast China was repeated, and the hoarding demand for rice flour quick-frozen food broke out, which is expected to achieve double-digit growth in a single month.
21q4 continued the logic of improving profitability, and the release of performance flexibility exceeded expectations again. The company's 22q1 net interest rate was 11.14%, year-on-year + 3.60pct; Deduct non net interest rate of 10.26%, year-on-year + 2.89pct. The gross profit margin was 31.03%, with a year-on-year increase of + 2.38pct; The sales expense ratio was 14.40%, with a year-on-year increase of -1.84pct. Consider the continuation of Q4 logic, that is, the joint impact of channel reform (contraction of direct channels + fine control costs) and product structure optimization (new products with high gross profit replace old products with low gross profit). In addition, we expect that the price of pork, the company's main raw material, will go down + Q4 price increase to ease the rising pressure on the cost of oil and rice noodles, the overall cost side will be well controlled, and the gross sales difference will increase significantly, with a year-on-year increase of + 4.21pct. The management expense ratio was 2.21%, with a year-on-year increase of -0.17pct; The R & D expense rate was 0.23%, with a year-on-year increase of + 0.03pct. The financial expense rate was -0.06%, with a year-on-year increase of + 0.06pct.
Under the catalysis of the epidemic, Q2's revenue performance is expected to increase by double. According to the channel research feedback, since the epidemic, the company has a strong demand for storing rice flour products, and the delivery side is stable as a whole. The growth rate of the revenue side still increased month on month in April, showing a bright performance. Under the dual optimization of channel + product structure (new categories such as air fryer, microwave oven instant rice and so on will be continuously arranged this year), the net interest rate is expected to maintain a double-digit level, the superimposed 21q2 net interest rate base is relatively low (7.79% net interest rate), and the performance end is expected to continue to release elasticity. The annual income is expected to reach the incentive target (about 10% growth), and the net interest rate is still expected to reach the level of 9% +.
Profit forecast and investment suggestions: the company's short-term performance is under pressure, and the medium and long-term channel reform continues to improve. In recent years, the company has made a series of positive changes and adjustments from internal mechanism to business strategy and channels, superimposed equity incentives and investment in new production capacity, and the company's income is expected to achieve benign and high-quality growth. According to the company's latest annual report performance and recent channel research, we adjusted the profit forecast. It is estimated that the company's revenue from 2022 to 2024 will be RMB 7.76/85.7/9.43 billion respectively, with a year-on-year increase of + 11.7% / 10.5% / 10.0%, the net profit attributable to the parent company is expected to be RMB 7.4/8.3/920 billion, with a year-on-year increase of + 15.6% / 12.2% / 10.1%, EPS is RMB 0.84/0.95/1.04 respectively, and the corresponding PE is 22x, 20x and 18x respectively, maintaining the "buy" rating.
Risk tips: intensified industry competition, risk of food safety events and price fluctuation of raw materials.
