\u3000\u3 China Vanke Co.Ltd(000002) 507 Chongqing Fuling Zhacai Group Co.Ltd(002507) )
Event: the company disclosed the first quarterly report of 2022. 22q1 achieved revenue / net profit attributable to parent company / deduction of net profit not attributable to parent company of RMB 689 / 214 / 195 million, a year-on-year increase of – 2.88% / + 5.39% / – 3.08%. The performance is in line with expectations.
The price increase has been steadily promoted, and the income has improved month by month. 22q1 achieved a revenue of 689 million yuan, a year-on-year increase of – 2.88%. According to channel research, the sales volume was affected by the high base and price increase in January, the revenue fell by about 20%, and the growth rate returned to about 4% in February. In March, driven by the demand of the epidemic and the implementation of price increase, the revenue increased by more than 15% year-on-year, realizing a slight decrease in 22q1 revenue. In April, the company entered the list of guaranteed supply in Shanghai, and the consumption scene was further expanded. At the same time, the new product salt reduced mustard is in line with the healthy trend, and the channel feedback has good dynamic sales. We expect that the revenue side is expected to achieve rapid growth.
Gross profit pressure caused by rising costs, 22q2 is expected to ease. 22q1 achieved a gross profit margin of 52.37%, with a year-on-year increase of -7.70pct, mainly due to the high price of raw materials green vegetable head and semi-finished mustard, about the same ratio of + 50%. 22q2 (about April to May) company is expected to use the low-cost green vegetable head in this year’s procurement season, with prominent gross profit elasticity and quarterly profit improvement. The sales expense rate of 22q1 was 17.87%, and the gross sales difference was 34.51%, with a year-on-year increase of -1.40pct. After the price increase, the company invested in establishing a new price system, promoting product upgrading and iteration, connecting new and old packaging, laying channels, etc. it is expected that with the smooth implementation of the price increase, the gross sales difference is expected to improve. The management / financial expense ratio was 3.19% / – 3.72%, year-on-year + 1.08 / – 1.76pct, and the comprehensive net interest rate was 31.11%, year-on-year + 2.44pct. 22q1 investment income was 210165 million yuan, which was mainly the income of banks and securities financial products with fixed capital increase, and the comprehensive net interest rate of non return to parent was 27.86%.
The diversified development of categories, the continuous sinking of channels, the decline of cost certainty and the prominent elasticity in 2022. In 2022, the company will focus on the development of multiple categories, focus on new products such as radishes, pickles and meals, increase investment, provide policy support, increase promotion expenses and rebates, and help accelerate the development of new categories. At the same time, the establishment of the second catering department has been basically completed, and more than 70% of the staff have catering background, helping to accelerate the expansion of catering channels. With the continuous promotion of price increase and the continuous expansion of categories and channels, the revenue side is expected to rise both in volume and price. At the same time, the cost pressure slows down, the investment efficiency of superposition fee increases, and the elasticity of profit side can be expected.
Investment suggestion: it is estimated that the operating revenue of the company in 2022, 2023 and 2024 will be RMB 2.916, 3.245 and 3.621 billion, and the net profit will be RMB 1.015, 1.141 and 1.322 billion. The company will be given a Buy-A investment rating and a 12-month target price of RMB 45.0, corresponding to 35xpe in 2023.
Risk warning: channel sinking is less than expected, category expansion is less than expected, and raw material price fluctuation risk
