\u3000\u3 Shengda Resources Co.Ltd(000603) 345 Fu Jian Anjoy Foods Co.Ltd(603345) )
Core view
Channel development and dishes have achieved stable growth in 21 years and a smooth transition under the short-term disturbance of 22q1. In 21 years, the company achieved revenue of 9.272 billion yuan (+ 33.12%), net profit attributable to parent company of 682 million yuan (+ 13%), net profit not attributable to parent company of 560 million yuan (+ 0.51%); Among them, 21q4 achieved a revenue of 3.176 billion yuan (+ 28.06%), a net profit attributable to the parent company of 188 million yuan (- 16.11%), and a net profit not attributable to the parent company of 178 million yuan (- 17.88%). In terms of products, the revenue of quick-frozen surimi products / quick-frozen meat products / quick-frozen noodle rice products / dish products in 21 years was 34.78/21.42/20.54/1.429 billion yuan respectively, with an increase of 23.07% / 19.16% / 23.60% / 112.41% respectively. The rapid growth of dish business is mainly due to the increase of the company’s dish products, Mr. frozen dishes, XINHONGYE crayfish products and so on. 22q1 company achieved a revenue of 2.339 billion yuan (+ 24.16%) and a net profit attributable to the parent company of 204 million yuan (+ 17.65%), which slowed down, mainly due to ① high base in the same period and the advance of the Spring Festival, and ② the repeated impact of the epidemic on terminal demand, logistics and production.
The cost is under pressure, the gross profit margin is under pressure, the channel development, the smooth transmission of price increase, the recovery of demand after the epidemic and the continuous development of dishes are expected to usher in improvement in the next 22 years. In 21 years, the gross profit margin of the company was 22.12%, down 3.56pct year-on-year. It is mainly because ① the price of raw materials such as oils and fats and protein isolate has increased significantly, ② the gross profit margin of the newly added frozen products and XINHONGYE company is lower than the original main business of the company, and ③ the increase of personnel wage cost, the increase of production investment and freight caused by technical transformation, etc. The company strengthened the control of expense investment. With the expansion of revenue volume, the sales rate / management rate / R & D rate were -0.1pct / – 0.8pct / – 0.11pct year-on-year respectively. Finally, the company achieved a net interest rate of 7.41% in 21 years, a year-on-year decrease of 1.26pct. 22q1 company achieved a gross profit margin of 24.20%, a year-on-year decrease of 2.29pct, and a year-on-year decrease of 0.26pct in net profit margin. At present, dealers are actively replenishing inventory through channels. As of Q1, the company’s contract liabilities were 640 million yuan, an increase of 146% compared with the end of 21. Meanwhile, the company plans to acquire 70% equity of xinliuwu food (mainly engaged in surimi production and crayfish processing) for no more than 644 million yuan, and the synergy of the industrial chain is expected to be further strengthened. We believe that with the development of channels, the smooth transmission of price increases, the gradual recovery of demand after the epidemic and the continuous development of dishes, the company’s performance in the past 22 years is expected to improve.
Risk warning: the epidemic situation affects the recovery of end B; Food safety risks; Risk of cost price fluctuation.
Investment suggestion: the leading company has strong business toughness and long-term logic. Maintaining the “buy” rating, the company is the absolute leader in China’s quick-frozen food industry. The stable growth of 22q1 under short-term disturbance once again verifies the company’s business toughness. We believe that with the advantages of production capacity, channels, products and other aspects, the company still has a large growth space for the original categories such as quick-frozen hot pot and quick-frozen rice flour products, Moreover, with the capacity construction and acquisition layout in the field of cuisine products, the company is expected to further open up growth space. We maintain the profit forecast. It is estimated that the company’s revenue from 2022 to 2024 will be 11.7/14.3/17.2 billion yuan respectively, with a year-on-year growth rate of 26% / 23% / 20%; The net profit attributable to the parent company was 9.2/11.8/1.41 billion yuan, with a year-on-year growth rate of 36% / 28% / 20%; The current share price corresponds to PE 39 / 31 / 26x, maintaining the “buy” rating.
