\u3000\u3 Bohai Water Industry Co.Ltd(000605) 338 Zhongyin Babi Food Co.Ltd(605338) )
Events
The company released the first quarterly report of 2021: the company realized an operating revenue of 310 million yuan in 22q1, a year-on-year increase of + 22.4%; The net profit attributable to the parent company was 1.45 million yuan, a year-on-year increase of - 89.5%; Deduct the net profit not attributable to the parent company of 39 million yuan, a year-on-year increase of + 192.6%, and the performance is in line with expectations.
Main contents
Question 1: why can Barbie, based in Shanghai, still achieve a remarkable deduction of 192.6% of non growth rate in the first quarter under the influence of the epidemic? Why does East China also maintain a stable proportion? East China still accounts for 41.91% of the company's revenue
Last year's base was low. In 2021q1, due to the increase of advertising expenses, the sales expenses increased to 30 million yuan, while this year's sales expenses decreased by 53.33% to 14 million yuan compared with the same period last year;
The pressure on the cost side is small. Pork accounts for a large proportion of the company's costs, and the downward trend of pig prices is good for the performance of the cost side;
Demand performance is stable. Benefiting from the significant growth in the number of stores and single store revenue in 2021, the revenue side of the company maintained stable development from January to February; Under the background of the outbreak of the epidemic in Shanghai in March, although the business development of some offline stores was blocked, the stores realized partial replenishment through community group purchase. At the same time, the rapid growth of group meal orders made the factory capacity tend to be saturated. Therefore, the overall operation of the company was limited by the epidemic.
Question 2: why is the group meal business of 22q1 growing rapidly? Why did the proportion of pastry products increase significantly?
22q1 group meal income increased significantly or the main reasons: 1) the demand for group meal increased significantly under the influence of the epidemic; 2) The expansion of group meal department personnel accelerated. According to the specific data, the revenue of franchise, Direct stores and group meal channels in 2022q1 was RMB 232 million, RMB 07 million and RMB 64 million respectively (with a year-on-year increase of 13.17%, 74.25% and 60.05% respectively, accounting for - 6.12, + 0.69, + 4.90 percentage points to 75.10%, 2.33% and 20.83% compared with the same period last year);
The increase in the proportion of pastry products in the revenue may be due to: 1) the demand for 22q1 group meal increased due to the high proportion of pastry in the group meal product structure compared with franchise stores; 2) Under the epidemic situation, community group purchase sells quick-frozen finished pastries. According to the specific data, in 2022q1, the income of food was 277 million yuan (accounting for the change of + 0.41 percentage points to 89.66% compared with the same period last year), and the income of pastry / stuffing / purchased food was 127 million yuan, 70 million yuan and 81 million yuan respectively (Accounting for the change of + 6.45, - 5.28, - 0.75 percentage points to 41.07%, 22.47% and 26.13% compared with the same period last year);
Question 3: why does the company's net profit margin drop sharply under the background of declining expense rate and increasing gross profit margin?
We believe that the sharp decline in the company's net profit margin is mainly due to the company's net income from changes in 22q1 fair value of - 51 million yuan, which dragged down the performance of the net profit side. In fact, the company's profitability has increased steadily and its cost control is strong. Specific data: the gross profit margin and net profit margin of 2022q1 company changed by 4.66% and - 5.04 percentage points respectively compared with the same period last year to 27.35% and 0.38%. In addition, the company has a strong ability to control the overall expenses. During the period, the expense rate, sales expense rate and management expense rate changed by - 5.05%, - 7.58%, 0.56% to 9.76%, 4.37% and 7.84% respectively compared with the same period last year.
Outlook 2022: a new chapter in the extended epitaxial spectrum, and the group meal is expected to continue its bright performance
New chapter of endogenous epitaxial spectrum, and the number of stores may exceed expectations. Extension in 2022 (the company will realize the national layout through accelerated acquisition, and 2022h1 company may merge the merger and acquisition project, which is expected to add more than 600 stores) + endogenous (under the background that the Nanjing factory will be launched in 2022, the East China region with strong brand strength will also accelerate the exhibition of stores, and the South China region will accelerate the development through increased public investment promotion) = it is expected to increase the net number of stores by more than 1300, So as to achieve the unexpected development in the number of stores.
The new volume of takeout business and the quality of stores exceeded expectations. 1) Takeout business: at the end of the year 21, the company has added takeout cooperation with meituan and other channels + the proportion of takeout stores has been continuously increased + many new Chinese and dinner products will contribute to the revenue of single store in 2022, which is sustainable; 2) Store upgrading, category expansion, regular price increase and other measures will continue; 3) 21 year price increase bonus release. Based on the above, we believe that the growth rate of single store revenue in 22 years is expected to remain positive and the development trend is getting better.
The development of group meal business has accelerated, and the performance may exceed expectations. We believe that the group meal business of the company will achieve more than expected development in 2022. The main reasons are as follows: 1) the accelerated landing of Nanjing factory is conducive to the expansion of group meal business in East China, and North China will continue to accelerate the development of group meal business; 2) In 2021, the company increased the staffing of key customer department, laying the foundation for the expansion of group meal business in 2022.
Strong cost control, and the gross profit margin may rebound at the bottom. Cost side: the cost side of the company is expected to be well controlled in 2022, mainly because the company has locked low-cost pork to ensure cost stability; Expense side: it is expected that the company's expenses will remain stable as a whole in 2022.
Re optimize the production capacity layout, and the Nanjing factory will be put into operation or accelerate the increase of the share in East China. In 2021, the company's capacity and capacity utilization rate increased steadily. Among them, the Shanghai phase II intelligent plant project in 2021 was officially put into operation in May 2021, which greatly alleviated the problem of capacity shortage. In 2021, the utilization rate of pastry capacity of central factories in Shanghai, Guangzhou and Tianjin were 91.62%, 27.45% and 7.24% respectively; The filling capacity utilization rates are 101.20%, 47.41% and 35.26% respectively. At present, the capacity in Shanghai is still in a tight balance. With the landing of Nanjing factory in 22 years, the market share of the company in East China is expected to further increase. At the same time, with the gradual landing of central China factory in the future, there is a lot of imagination for the development of central China.
Profit and valuation forecast
We believe that: 1) volume: the current expansion speed of the company's franchise stores is basically in line with expectations. In the future, the company will accelerate the speed of mergers and acquisitions to achieve a rapid increase in scale; 2) Price: the company increases the income of a single store by making efforts to create revenue increment from store takeout business, adjusting store product structure and locking fresh clothes; 3) In terms of incremental business, under the trend of finished products and specialization, the company's 2B business is expected to develop beyond expectations. To sum up, it is estimated that the company's revenue growth rate from 2022 to 2024 will be 44%, 23% and 20% respectively; The growth rate of net profit attributable to the parent company was - 15.4%, 23.6% and 26.7% respectively; EPS is 1.1, 1.3 and 1.7 yuan / share; PE is 30, 24 and 19 times respectively. Considering the strong certainty of the company's annual performance, the current valuation is very cost-effective, and the buy rating is maintained.
Risk warning: the second outbreak of the epidemic in China; Food safety issues; Franchise management risk; Failure risk of foreign investment; Raw material price fluctuation risk.
