\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 305 Jiangsu Hengshun Vinegar-Industry Co.Ltd(600305) )
Event: the company disclosed the annual report of 2021 and the first quarterly report of 2022. In 2021, the company realized operating income / net profit attributable to parent company / net profit not attributable to parent company deduction of 1.893119/108 billion yuan, with a year-on-year (after adjustment, the same below) -6.45% / – 62.28% / – 62.01%, of which 21q4 realized operating income / net profit attributable to parent company / net profit not attributable to parent company deduction of 534 million yuan / – 157325 / – 4663100 yuan, with a year-on-year ratio of – 6.65% / – 118.69% / – 105.91%. 22q1 achieved operating income / net profit attributable to parent company / deduction of net profit not attributable to parent company of RMB 572 / 0.77 / 0.70 million, with a year-on-year increase of + 10.43% / – 0.75% / + 1.85%.
The marketing reform has achieved initial results, 21q4 achieved the best performance in a single quarter of the year, and the 22q1 epidemic in East China blocked shipments. In terms of products, vinegar / soy sauce achieved a revenue of 333 / 93 million yuan in 21q4, a year-on-year increase of – 12.86% / + 30.87%. Affected by the weak demand of the industry and the epidemic, the revenue of condiments decreased by 5.28% in 2021. 22q1 vinegar / soy sauce achieved a revenue of 355 / 107 million yuan, a year-on-year increase of + 6.80/17.68%, condiment revenue of + 14.12%, and single products such as oil vinegar juice and braised meat seasoning bag also contributed to a large growth rate. In 2021, the company actively carried out marketing reform, appointed a new marketing director in November, vigorously promoted market-oriented reform, continued to deepen the Ninth World War area, and promoted 21q4 to achieve the best performance in a single quarter of the year. According to grassroots research, the company achieved rapid growth from January to February 2022. In March, affected by the epidemic in East China, the logistics of raw materials and finished products was blocked, resulting in damage to shipments. Therefore, the company increased channel expansion in non epidemic areas to hedge, and comprehensively realized a year-on-year increase of more than 14% in 22q1 condiments. The company continues to promote product upgrading and innovation. According to the annual report, it will launch a new series of soy sauce, oyster sauce and salt reduced soy sauce. By region, the distribution of East China / South China / Central China / West China / North China achieved a year-on-year increase of + 10.10% / 18.28% / 13.49% / 33.02% / 14.71%. Except for the damage of the epidemic in East China, other regions performed well.
The rising cost of raw materials + the adjustment of product structure put pressure on profits, waiting for the release of reform dividends. In 2021, the gross profit margin was 37.58%, with a year-on-year increase of -3.18pct, mainly due to the rise in the cost of raw materials and the increase in the proportion of Shanxi Hengshun old vinegar with low gross profit. The sales expense rate was 18.15%, with a year-on-year increase of + 4.86pct, mainly due to more investment in channel reform and an increase in advertising and market promotion fees. The management expense ratio was + 0.75pct year-on-year, resulting in a net interest rate of 6.28%, a year-on-year increase of -9.35pct and a month on month increase of + 16.45pct. 22q1 achieved a gross profit margin of 37.90%, a year-on-year -1.47pct, a quarterly improvement in gross profit margin, a year-on-year sales / management / financial expense ratio of -0.40 / – 0.19 / – 0.23pct, and a net profit margin of 13.50%, a year-on-year -1.74pct. In 2021, the company added 381 dealers, with 89.7% market coverage at prefecture level and 50.1% market coverage at county level. The person in charge of the theater emphasized performance, result orientation and process management. According to the annual report, in 2022, the company plans to increase condiment revenue by more than 10% and deduct non net profit to achieve an increase of more than 5%. We believe that although 22q2 is affected by the epidemic or will still be under pressure, the annual goal is relatively conservative, and the marketing reform is expected to be completed smoothly with the release of dividends.
Investment suggestion: we estimate that the company’s revenue from 2022 to 2024 will be RMB 2.096 billion, RMB 2.371 billion and RMB 2.651 billion respectively, and the net profit will be RMB 126 million, RMB 189 million and RMB 247 million respectively. We maintain the investment rating of Buy-A, and the 12-month target price is RMB 11.30, which is equivalent to the dynamic P / E ratio of 60x in 2023
Risk tips: macroeconomic and policy risks, food safety problems, and the risk that the epidemic recovery is less than expected
