\u3000\u3 Shengda Resources Co.Ltd(000603) 027 Qianhe Condiment And Food Co.Ltd(603027) )
Events
On the evening of April 26, 2022, the company released the 2021 annual report and the first quarterly report of 2022: in 2021, the company realized a revenue of 1.925 billion yuan (+ 13.70%), a net profit attributable to the parent company of 221 million yuan (+ 7.58%), and deducted a net profit not attributable to the parent company of 218 million yuan (+ 8.26%); 2022q1 revenue 482 million yuan (+ 0.93%); The net profit attributable to the parent company is 55 million yuan (+ 38.47%), and the non net profit deducted is 54 million yuan (+ 27.12%).
Key investment points
The fourth quarter improved month on month, and the profit continued to be under pressure
According to the annual report, the revenue in 2021q4 was 570 million yuan (+ 20.95%), the net profit attributable to the parent company was 89 million yuan (+ 594.17%), and the net profit not attributable to the parent company was 86 million yuan (+ 561.91%). The high growth rate in the fourth quarter was mainly due to the negative profit caused by the impairment of Q4 Jinshan Temple assets in 2020.
The gross profit margin of the company decreased by 38.38% in the fourth quarter of 2020 compared with that of the company in 2021t-474, mainly due to the improvement of the gross profit margin of 2021t-474. The ratio of sales expenses / administrative expenses / financial expenses in 2021 was 20.15% / 6.25% / – 0.14%, with a year-on-year increase of + 3.21 / – 0.04 / + 0.05pct. The increase of sales expense rate is mainly due to the increase of TV advertising investment during the period; The management expense rate is basically the same; The change of financial expense rate is mainly due to the increase of interest income. The net interest rate in 2021 is 11.50% (-0.65pct), which is basically the same; The net interest rate of 2021q4 is 15.71% (+ 19.11pct), which is mainly due to the negative profit caused by the asset impairment of Jinshan Temple in Q4 in 2020.
The revenue of 2022q1 was 482 million yuan (+ 0.93%), mainly due to the impact of the epidemic and the decline of revenue in East and South China; The net profit attributable to the parent company was 55 million yuan (+ 38.47%), mainly due to the decrease in advertising investment. The gross profit margin of 2022q1 company is 34.98% (-8.36pct), which is expected to be mainly due to the high price of raw materials. The ratio of sales expenses / administrative expenses / financial expenses was 15.06% / 5.84% / – 0.19%, respectively -10.63/0.39/ -0.17pct year-on-year. The decline in the ratio of sales expenses is expected to be mainly due to the decrease in advertising expenses. The net interest rate of 2022q1 is 11.46% (+ 3.11pct), mainly due to the decline of sales expense rate.
The ton price fell slightly, and the proportion of online business increased to 20%
By product, in 2021, the revenue of soy sauce / vinegar reached 1.182322 billion yuan respectively, with a year-on-year increase of + 12.15% / + 10.02% respectively. In 2022q1, the revenue of soy sauce / vinegar reached 290 million yuan / 79 million yuan respectively, with a year-on-year increase of – 1.32% / + 2.56% respectively.
In terms of component price, the sales volume of soy sauce / vinegar in 2021 was 263600 / 93600 tons, with a year-on-year increase of + 30.18% / + 13.51%, and the ton price was 4485 / 3434 yuan / ton, with a year-on-year increase of – 13.85% / – 3.07%. It is expected that it is mainly due to the adjustment of product structure, the ton price of high fresh soy sauce and parity zero addition soy sauce will be reduced, and the ton price will be reduced due to the increase of online sales.
By region, the revenue of the East / South / central / North / West in 2021 was 388 / 1.21 / 1.80 / 267 / 942 million yuan, a year-on-year increase of + 17.30% / + 51.68% / + 29.42% / + 10.45% / + 7.29%. 2022q1 Eastern / Southern / central / northern / Western Revenue of RMB 0.85/0.27/0.43/0.72/250 million, a year-on-year increase of -8.02% / – 3.09% / + 12.64% / + 15.72% / + 0.98%.
In terms of channels, the distribution / direct sales revenue in 2021 was 1.256642 billion yuan respectively, with a year-on-year increase of + 12.65% / + 15.79%; Among them, online sales amounted to 384 million yuan (+ 47.67%), accounting for 19.94% (+ 4.59pct) of revenue. In 2022q1, the distribution / direct sales revenue was RMB 327 million / 149 million respectively, with a year-on-year increase of + 3.05% / – 0.66%. In 2021, there was a net increase of 387 to 1791 dealers. By the end of Q1 in 2022, there were 1899 dealers, with a net increase of 108.
The goal is more pragmatic and is expected to be successfully completed in 2022
The company expects the operating revenue to be + 18.5% in 2022; Net profit attributable to parent company + 9.34%. Mainly from the following points:
Products: Launch high-end products, continue to consolidate Qianhe’s brand image at the high end, and make efforts to make high fresh soy sauce and cheap zero addition soy sauce, focusing on cost performance, so as to further expand the coverage of consumer groups.
Channels: strengthen the construction of marketing network, expand the market scope, and actively try new channels and models such as live broadcasting and goods.
In terms of production capacity: a fixed increase of 1.26 billion yuan will be added to build an intelligent seasoning manufacturing project with an annual output of Shanghai Pudong Development Bank Co.Ltd(600000) tons. The construction period is five years, of which the first phase will complete the construction of a production line with an annual output of 200000 tons of soy sauce and 100000 tons of cooking wine. After all construction and operation, the total production capacity of the company will exceed 1.1 million tons, effectively ensuring the long-term and stable development of the company.
Profit forecast
We believe that the industry demand may be improved in 2022. In 2021, the overall base of the company is low, and the rise of raw materials may be narrowed or even the price may fall, so the profitability of the company is expected to be improved. Optimistic about the company’s differentiation strategy of focusing on high-end zero addition, and the overall positive trend remains unchanged. Based on the consideration of prudence, the impact of additional issuance on the company’s performance and share capital is not considered for the time being. It is estimated that the EPS from 2022 to 2024 will be 0.30/0.39/0.48 yuan, and the corresponding PE of the current stock price will be 59, 46 and 38 times respectively, maintaining the “recommended” investment rating.
Risk tips
Macroeconomic downside risks, consumption dragged down by the epidemic, intensified industrial competition, less than expected regional expansion, less than expected new product promotion, less than expected price increase, less than expected progress in additional issuance, etc.
