\u3000\u3 Shengda Resources Co.Ltd(000603) 317 Sichuan Teway Food Group Co.Ltd(603317) )
Event: the company achieved revenue of 629 million yuan in 2022q1, with a year-on-year increase of 20.60%; The net profit attributable to the parent company was 100 million yuan, a year-on-year increase of 25.27%; The net profit attributable to the parent company after non deduction was 98 million yuan, a year-on-year increase of 27.26%.
In 2022q1, the revenue recovered to rapid growth, and the light pack made a good start. In 2022q1, the company realized a seasoning revenue of 629 million yuan, with a year-on-year increase of 20.62%. After three consecutive quarters of revenue decline, the company resumed rapid growth. We believe that the main reasons are: (1) after the industry experienced the de inventory cycle in 2021, the channel inventory remained at a low level at the end of the year. In 2022, the company went into battle with light equipment and the dealers had a high enthusiasm for payment in the first quarter; (2) In 2021h1, the competition in the industry is obviously intensified, and the competition slows down with the gradual withdrawal of small and medium-sized brands in 2022; (3) 2021q3 also contributed to the price increase of some small items. The income of hot pot seasoning and hot pot seasoning products increased by -4.23 billion yuan and -2.42 billion yuan respectively year-on-year, with a year-on-year increase of -4.23% respectively. The decline of hot pot seasoning revenue is mainly due to the high base of 2021q1 (the current revenue increased by 84.53% year-on-year). The rapid growth of Chinese dish seasoning is mainly due to the company’s distribution of crayfish seasoning in advance. In terms of channels, 2022q1 dealers, customized meal adjustment and e-commerce channels achieved revenue of 523 million yuan, 523 million yuan and 33 million yuan respectively, with a year-on-year increase of 23.42%, 12.95% and – 20.20% respectively. By region, in 2022q1, the income of southwest, central, East, northwest, north, northeast and South China increased by 17.78%, 20.59%, 20.70%, 23.50%, 43.08%, – 8.49% and 22.69% respectively. The decline of income in Northeast China is mainly due to the repeated impact of the epidemic. In 2022q1, the number of dealers of the company decreased from 41 to 3368, and the company continued to optimize dealers.
The gross profit margin decreased slightly due to the rise of costs, and the sales expense rate was well controlled. The gross profit margin of 2022q1 decreased by 0.32 PCT to 35.95% year-on-year, mainly due to: (1) the rise in the price of raw materials such as oil, pepper and packaging had a negative impact on the gross profit margin; (2) The significant year-on-year decrease in complimentary promotion and the price increase of 2021q3 small items partially offset the adverse factors of rising costs. In 2022q1, the company’s sales, management, R & D and financial expense rates were – 3.50, – 0.16, + 0.19 and + 1.91 PCT respectively to 13.01%, 3.39%, 1.21% and – 0.73% year-on-year. The sales expense rate decreased significantly, mainly due to the obvious year-on-year contraction of advertising expenses in 2022q1. The increase of financial expense rate is mainly due to the decrease of interest income due to more bank deposits used for financial management. Overall, in 2022q1, the net profit attributable to the parent company increased by 0.59 PCT to 15.96% year-on-year.
2022 is a perfect start and looks forward to continuous improvement. In 2022, the company made a good start with light equipment and is expected to return to the stage of steady growth. The company has launched a new round of equity incentive scheme with more pragmatic objectives, which is expected to boost the confidence of the team and stimulate the enthusiasm of employees. At the same time, after the fierce competition in 2021, the industry will gradually enter the reshuffle stage in 2022, and the withdrawal of basic condiment leaders and regional brands will be accelerated, which will benefit the development of leaders.
Profit forecast: we expect the company’s revenue from 2022 to 2024 to be 2.467, 2.945 and 3.457 billion yuan respectively, the net profit attributable to the parent company to be 255, 384 and 513 million yuan respectively, and the EPS to be 0.34, 0.51 and 0.68 yuan respectively, corresponding to 49, 32 and 24 times of PE, maintaining the “overweight” rating.
Risk warning events: repeated global epidemics and slowdown of global economic growth; Food safety risks; Due to irresistible factors
