\u3000\u3 Shengda Resources Co.Ltd(000603) 517 Juewei Food Co.Ltd(603517) )
Event: the company released its 2021 annual report. In the past 21 years, the company achieved an operating revenue of 6.549 billion yuan, a year-on-year increase of 24.1%, and a net profit attributable to the parent company of 981 million yuan, a year-on-year increase of 39.9%; Among them, 21q4 achieved an operating revenue of 1.702 billion yuan, a year-on-year increase of 22.4%, and a net profit attributable to the parent company of 17 million yuan, a year-on-year decrease of 90.7%. At the same time, the company announced the first quarterly report of 2022. 22q1 achieved an operating revenue of 1.688 billion yuan, a year-on-year increase of 12.1%, and a net profit attributable to the parent company of 89 million yuan, a year-on-year decrease of 62.2%.
Key investment points
The revenue growth in 21 years is in line with expectations, and the growth of the same store is still under pressure. The revenue of 21 / 21q4 company was RMB 6.549/1.702 billion respectively, with a year-on-year increase of + 24.1% / + 22.4%. 1) In terms of products, in 21 years, the revenue of fresh goods products was 5.607 billion yuan, a year-on-year increase of + 15.5%; the revenue of Poultry / livestock / vegetables / other products was 43.31/0.70/6.13/593 million yuan, a year-on-year increase of + 13.0% / + 115.1% / + 15.7% / + 28.7%; Poultry revenue is still the core of fresh goods business, maintaining steady growth year-on-year; 2) In terms of sub regions, the revenue of Southwest / Northwest / central / South China / East / North China in 21 years was 926 / 0.34 / 18.85 / 13.55 / 13.06 / 731 million yuan respectively, with a year-on-year increase of + 20% / – 42.3% / + 34.0% / + 33.9% / + 12.0% / + 15.7%. 3) From the perspective of different channels, in the past 21 years, the sales revenue of halogenated food / franchisee management / other channels was 5.743/0.67/541 billion yuan respectively, with a year-on-year increase of + 17.3% / – 1.5% / + 212.3%. By the end of 2021, there was a net increase of 1315 to 13714 stores. Affected by the epidemic and extreme weather, the overall pace of opening stores throughout the year was slightly affected. The overall single store revenue in 21 years was 440000 / store, a year-on-year increase of + 4.88% over 20 years. There was a slight gap over 19 years, mainly due to the large pressure on the opening and revenue of transportation hubs and supermarkets.
22q1 company achieved a revenue of 1.688 billion yuan, a year-on-year increase of + 12.1%. In terms of products, the revenue of 22q1 fresh products was 1.398 billion yuan, a year-on-year increase of + 2.8%; the revenue of Poultry / livestock / vegetables / other products was 1.098/0.09/1.53/138 billion yuan, a year-on-year increase of + 4.2% / – 62.8% / + 4.7% / + 1.4%; 2) In terms of sub regions, the revenue of 22q1 Southwest / Northwest / central / South China / East / North China was 241 / 0.09 / 5.44 / 3.19 / 3.13 / 188 million yuan respectively, with a year-on-year increase of + 1.6% / + 62.6% / + 37.0 / + 0.5% / + 0.7% / + 8.4%. Under the influence of the closure and control of the epidemic in many places in March, the opening speed and single store income of 22q1 are under pressure. It is expected that the number of 22q1 stores will be about 600. After the store opening competition and the plan to start a prairie fire in 22 years, the pace of opening stores is expected to accelerate. At the same time, the company will still increase activities to promote the recovery of single stores, actively launch new products and strive to expand the revenue growth pole.
The gross profit margin was under pressure in 21 years, and the investment income helped to improve the net profit margin. The gross profit margin of the company in 21 years was 31.68%, with a year-on-year increase of -1.80ptcs, mainly due to the rise of raw material costs and the company’s discount activities. The sales expense rate / management expense rate / financial expense rate were 8.00% / 6.38% / 0.13% respectively, with a year-on-year increase of + 1.9 / + 0.09 / + 0.29ptcs. The net interest rate of the company in the 21st year was 14.98%, with a year-on-year increase of + 1.69ptcs. In the third quarter of the 21st year, the company’s investment projects such as Hefu and Qianwei contributed investment income, and the company’s profit was stable throughout the year; The year-on-year increase in the company’s gross profit margin was mainly caused by the increase of -18ptcs.31% and -18ptcs.31% of the company’s gross profit margin. The sales expense ratio was 14.0%, with a year-on-year increase of + 7.33 PTCs, at a historically high level, mainly due to the increase of store subsidies and marketing promotion expenses. With the relief of epidemic control after Q2 and the release of slaughtering pressure, the profitability of the company is expected to improve marginally and release profit elasticity.
Investment suggestion: in the short term, the company’s main business is expected to continue to grow steadily through the active optimization of stores in mature markets, the development of stores in blank areas of growing markets and the improvement of management efficiency. In the medium and long term, pay attention to the improvement of brand potential energy and the building of “food ecosystem”. The company will enter the brand potential building period in the next three years, and the core driving force of the company’s development will change from channel thrust to brand pull. The company’s medium and long-term income growth curve is clear and predictable. According to the data of the annual report for 21 years, we slightly adjusted the profit forecast: the operating revenue of the company from 2022 to 2024 was RMB 75.33/88.53/10.614 billion respectively, with a year-on-year increase of 15% / 17.5% / 19.9%. The net profit attributable to the parent company was 1.008/13.11/1.539 billion yuan, with a year-on-year increase of 2.8% / 30.1% / 17.4%. The corresponding EPS is 1.64/2.13/2.51 yuan respectively, maintaining the company’s “Buy-A” investment rating.
Risk warning: repeated outbreaks in some areas; Channel expansion is less than expected; Industry competition intensifies; The cost of raw materials is rising rapidly; Food safety issues.
