\u3000\u3000 Toly Bread Co.Ltd(603866) (603866)
Key investment points
Event: the company released the performance express for 2021: the annual revenue in 2021 was 6.343 billion yuan, yoy + 6.38%; Net profit attributable to parent company: 764 million yuan, yoy-13.51%; Deduct non net profit of 720 million yuan, yoy-13.85%.
The year-on-year growth rate of Q4 revenue is the same as that of Q3. Q4 price increase + continuous innovation are expected to continue to improve in the future. The company achieved revenue of RMB 1.68 billion in 21q4, yoy + 5.57%; The net profit attributable to the parent company was 195 million yuan, yoy-0.81%; Deduct non net profit of RMB 191 million, yoy + 1.41%. The year-on-year growth rate of Q4 revenue is the same as that of Q3. We believe that this is mainly related to the recurrence of Q4 epidemic. The company has raised the price of some products in Q4, accelerated the promotion of new products, and expected the improvement of revenue growth in the future.
Epidemic relief and Social Security + low return rate, resulting in high profit base + rising raw material prices, resulting in pressure on the company’s profit side. The company’s Q4 net profit attributable to the parent company was 11.62%, with a year-on-year ratio of -0.74pct and a month on month ratio of + 0.08pct. The main reasons include: ① in the same period of last year, affected by the national phased social security reduction policy, the company’s labor cost was lower than that in the current period; ② The price rise of some raw materials has led to an increase in product costs; ③ Affected by the epidemic situation in the same period last year, there were relatively few promotional activities, and the discount rate in this period was higher than that in the same period last year. With the price increase at the end of the year, we expect the company’s profitability to continue to improve month on month.
The medium and long-term logic of the short-term maintenance track is clear, the company’s new production capacity will be put into operation in the next 2-3 years, and the moat of the supply chain will be deepened. Short bread meets the consumption trend of consumers’ health needs and is a track with medium and long-term growth. The layout of the company’s production bases across the country has been improved. It is expected that the production capacity of Sichuan, Zhejiang, Guangxi, Shandong, Fujian, Liaoning and other places will be released in succession in 21-23 years. Among them, factories in Sichuan, Zhejiang and Shenyang are expected to be put into operation in 2022.
Investment suggestion: the short-term bread industry is growing in double digits. It is optimistic about Taoli to establish medium and long-term barriers and expand market share through management and supply chain. In the medium term, the company’s capacity expansion in many places has been promoted step by step, and the barriers at the end of the supply chain have been strengthened; In the long run, the company can improve its profitability with scale effect after completing the layout of production bases throughout the country. According to the company’s performance express and future layout in 2021, we adjusted the profit forecast. From 2021 to 2023, the revenue was 6.34 billion yuan, 7.32 billion yuan and 8.29 billion yuan respectively, with an increase of 6.4%, 15.4% and 13.2% at the same time. The net profit attributable to the parent company was 770 million yuan, 920 million yuan and 1.02 billion yuan respectively, with a year-on-year increase of – 13.4%, + 20.8% and + 10.5%, and EPS was 0.80, 0.97 and 1.07 yuan respectively (0.93, 1.07 and 1.22 yuan in the previous time), From 22 to 23 years, the corresponding current PE is 28x and 25X, maintaining the “buy” rating.
Risk tip: the industry competition intensifies, the development of new products and channel regions is less than expected, and the risk of food safety events.
