\u3000\u30 Chongqing Baiya Sanitary Products Co.Ltd(003006) 73 Petpal Pet Nutrition Technology Co.Ltd(300673) )
Event: the company released the annual report of 2021 and the first quarterly report of 22 years. In 21 years, the operating revenue was 1.271 billion yuan, a year-on-year decrease of 5.15%, and the net profit attributable to shareholders of listed companies was 60.02 million yuan, a year-on-year decrease of 47.73%. The net profit of Q1 was 2.27 billion yuan, a year-on-year increase of 2.23%.
Key investment points:
Many factors dragged down the performance of the whole year, and Q1 operation recovered in 22 years. 1) The epidemic led to the shutdown of Vietnamese factories (accounting for more than half of the company's production capacity in 21 years) for several months, and the cost in the resumption stage increased, which dragged down the company's performance. 2) Strategic investment has not yet been profitable. Cambodia's snack food project is still in the stage of capacity climbing, and the scale effect is not fully apparent, resulting in a loss of 184714 million yuan in the reporting period; The North Island town and New Zealand dry food projects are still under construction, with a total loss of 222859 million yuan in the reporting period; The initial expenses of private brand business were relatively large, and the loss in the reporting period was 286731 million yuan. 3) In the past 21 years, the RMB was in the channel of continuous appreciation against the US dollar, resulting in exchange losses of 225719 million yuan. The absolute value of the above losses accounted for 148.3% of the consolidated profit. In Q1 of the 22nd year, as the impact of the epidemic on production and consumption gradually subsided, the production and operation of the company's overseas factories were normal and the performance recovered. The operating revenue of 22q1 increased by 7.03% year-on-year and the net profit deducted increased by 33.71% year-on-year.
The projects invested with raised funds are promoted, and the capacity supports the performance potential. 1) The capacity of overseas projects has climbed, and it is expected to cross the break even and enter the profit period. The capacity release of Cambodia's 9200 ton snack food project and New Zealand's 40000 ton high-quality dry food factory in 22 years will reach 30% and 20% respectively. 2) The construction of the new raised investment project has started, and the New Zealand project of 30000 tons of wet grain and 50000 tons of new pet food per year is expected to be completed within three years. After the completion of all projects of the company, the overall production capacity is expected to reach more than 150000 tons. Capacity expansion will provide basic support for the company's performance explosion.
Product marketing overweight, continuous attention to landing efficiency: 1) products: combined with the development trend of pet industry, the company accelerated the layout of natural staple food, wet food, air-dried and freeze-dried new staple food, chewing snacks and other product lines. The income of staple grain and wet grain increased by 21.46% year-on-year in 21 years; 2) Channels: first, focus on cultivating online channels. In the next 22 years, we will give priority to building a private domain traffic platform and speed up the layout of content social e-commerce channels. Second, steadily promote offline channels and form long-term cooperative relations with pet stores, hospitals and product agents. Third, consolidate and strengthen overseas channels and promote the steady increase of market share. 3) Brand: the company continues to increase the promotion of Chinese independent brands. In 21 years, China's revenue increased by 5.62% year-on-year, and the direct sales revenue increased by 3.06% year-on-year. In the next 22 years, we will continue to focus on building staple food brands and professional functional food brands. At present, many products under our own brands have become online celebrities, and the brand awareness has been continuously improved.
Investment advice
As a leading pet food enterprise in China, the company actively promotes production capacity layout, channel construction and brand building. With the weakening of the impact of the epidemic and the recovery of operation, it is expected to make renewed efforts. We expect the net profit attributable to the parent company from 2022 to 2024 to be 142.26 million yuan, 191.33 million yuan and 232.24 million yuan respectively. EPS is 0.56 yuan, 0.76 yuan and 0.92 yuan respectively, and the corresponding PE is 27.41, 20.38 and 16.79 times respectively, which is rated as "buy".
Risk tips: epidemic fluctuation, food safety, exchange rate fluctuation and other risks.
