\u3000\u3000 Toly Bread Co.Ltd(603866) (603866)
Event: on January 11, the company released the 2021 annual performance express. In 2021, it is expected to achieve an operating revenue of 634300 yuan, a year-on-year increase of + 6.38%; The net profit attributable to the parent company was 764 million yuan, a year-on-year increase of – 13.51%. The basic EPS is 0.80 yuan. Single Q4 achieved a revenue of RMB 1.68 billion, a year-on-year increase of + 5.57%; The net profit attributable to the parent company was 195 million yuan, a year-on-year increase of -0.81%.
The main business developed steadily, with a slight year-on-year increase in revenue. The company’s annual and 21q4 revenue maintained low-speed growth in 2021, and the development of its main business was relatively stable. In 2021, the company’s operation was still greatly affected by the epidemic, resulting in the weakening of demand under the scenarios of transportation hub consumption, school consumption, hospital consumption, travel tourism consumption and so on. However, in the medium and long term, there is still room for growth in the frequency and amount of bread consumed by residents, and the downstream demand is stable. It is expected that under the condition of stable epidemic situation in the future, the revenue side of the company is expected to maintain steady growth.
Q4 profit was flat year-on-year, with a narrow decline. In 2021, the net profit attributable to the parent company showed a double-digit decline year-on-year; The net profit of 21q4 was flat year-on-year, which was significantly narrower than that of 21q3, indicating that the operation trend of the company was stable and good. The main reasons for the year-on-year decline of the company’s net profit in 2021 are as follows: (1) the company’s labor cost is low due to the impact of the national phased social security relief policy in 20 years; The gradual withdrawal of relevant policies in 21 years led to an increase in relevant costs. (2) The price rise of some raw materials has led to an increase in product costs. In 21 years, the prices of raw materials such as wheat, soybean and vegetable oil increased significantly year-on-year, driving down the company’s gross profit margin. It is expected that the prices of raw materials will remain relatively high in 22 years. The company will alleviate the cost pressure by improving operating efficiency and strengthening cost control, but the pressure of raw material cost on performance is still obvious. (3) Affected by the epidemic situation in the same period of 20 years, there were relatively few promotional activities; The downstream demand fell back to the normal level in 21 years, and the product discount rate was higher than that in the same period of 20 years.
Channels were steadily expanded and new production capacity was put into operation in an orderly manner. In 2021, the company will expand new markets in East China and South China and increase investment in key customers; At the same time, we will continue to accelerate the refinement and sinking of sales network in mature markets such as northeast and North China, develop subdivided consumer markets and sales channels, and tap market potential. In terms of new capacity, Shandong Taoli project has been put into operation in February 2020; Jiangsu Taoli project has been put into operation in March 2021; The production capacity of Dongguan factory in Guangdong has been fully released. Shenyang Taoli project, Zhejiang Taoli project, Sichuan Taoli project and Qingdao Taoli project are under construction as planned. New factories around the country will release new production capacity in an orderly manner.
Investment suggestion: according to the performance express, we slightly reduce the profit forecast. It is estimated that the company will achieve a revenue of RMB 6.343/71.12/8.052 billion and a net profit attributable to the parent company of RMB 764/8.53/962 million in 21-23 years, equivalent to EPS of RMB 0.80/0.90/1.01 respectively. At present, the corresponding share price of PE in 21-23 years is 34 / 31 / 27 times. The company is a leading company in the bread baking industry with a stable market position. In the future, under the high base of the expansion of revenue scale, the revenue growth center may move down and return to stability. Combined with the company’s valuation center in the past five years, the average valuation level of the leisure food industry, the company’s leading position in the short-term bread industry and the certainty of market growth, we believe that 35xpe can be valued at the level of profit forecast in 2022, corresponding to the target price of 31.50 yuan, Maintain a “recommended” rating.
Risk tip: the business expansion speed is lower than expected, the consumption tendency of residents decreases, food safety problems, etc.
