\u3000\u3 Shengda Resources Co.Ltd(000603) 517 Juewei Food Co.Ltd(603517) )
Event: Jue Wei released the annual report and the first quarterly report of 2021. In 2021, the revenue was 6.55 billion yuan, a year-on-year increase of + 24.1%, and the net profit attributable to the parent company was 980 million yuan, a year-on-year increase of + 39.9%. Deduction of non parent net profit of 720 million yuan, a year-on-year increase of + 5.9%. The revenue of 21q4 was 1.7 billion yuan, a year-on-year increase of + 22.4%, and the parent company was 17 million yuan, a year-on-year increase of – 90.7%; 22q1’s revenue was 1.69 billion yuan, a year-on-year increase of + 12.1%, and the parent company’s revenue was 90 million yuan, a year-on-year increase of – 62.2%.
Counter trend accelerated the expansion of stores, and single stores were slightly under pressure due to the impact of the epidemic. In 2021, the revenue was 6.55 billion yuan, a year-on-year increase of + 24.1%, slightly lower than the equity incentive target of 25%. In terms of business, there were 1315 to 13700 stores in the main business, a year-on-year increase of + 10.6%; 440000 single stores, a year-on-year increase of + 4.88%, and the revenue of halogen products was 5.74 billion, a year-on-year increase of + 17.3%. Franchisee management and others amounted to 805 million, of which 540 million were the best match and supply chain, with a year-on-year increase of + 212.3%. The revenue of 22q1 was 1.69 billion yuan, a year-on-year increase of + 12%. According to our calculation, it is estimated that 600 new stores will be opened, a year-on-year increase of + 13%. The single store will drop slightly due to the impact of the epidemic in March. The revenue of halogen products was 1.43 billion yuan, a year-on-year increase of + 2.2%, and other revenue was 262 million yuan, a year-on-year increase of + 138%.
Q1 gross profit margin meets expectations, and franchisee subsidies affect short-term profits. The gross profit margin of 2021q4 / 2022q1 was 26.34% / 30.31% respectively, slightly lower than the same period, mainly due to the year-on-year rise of duck vice and oil price, the increase of goods supplement of franchisees and the increase of the proportion of supply chain. In terms of sales expense ratio, the total sales expense of 21q4 and 22q1 is 425 million yuan, and the sales expense ratio is 11.1% and 14.0% respectively, both of which belong to a historically high level. We believe that the company has worked with franchisees in the industry downturn. After the epidemic situation recovers, it is expected to work together in a win-win situation in the industry and continuously consolidate its leading position.
Stability leads to long-term development and waits for new opportunities for the reversal of difficulties after the epidemic. The company disclosed the performance of various store types in the annual report for the first time. Among them, the single store revenue of stock stores increases positively with the store age, and the store age of more than 2 years can basically achieve 20% revenue growth. We believe that in the 100 billion bittern market, the epidemic situation gives the brand a challenge and a turnaround. While stabilizing the confidence of franchisees, the company accelerates the market expansion with the help of the two toolkits of starting a prairie fire and accepting hundreds of rivers, opens stores against the trend and increases the market share. It is expected to enter the leading stage after the epidemic. In addition, relying on the advantages of the supply chain and the empowerment of the food ecosystem, the company has opened the medium and long-term imagination space. We believe that the loss of short-term profits does not change the value of the medium and long-term platform, and we are optimistic about the opportunity of dilemma reversal after the epidemic.
Profit forecast: we adjusted the profit forecast from 2022 to 2023 according to the annual report and the first quarterly report, and introduced the forecast for 2024. It is estimated that the operating revenue from 2022 to 2024 will be RMB 7.56/88.8/10.45 billion, with a year-on-year increase of + 15.4% / + 17.5% / + 17.7%, and the net profit attributable to the parent company will be RMB 990 / 13.1/1.56 billion (the net profit attributable to the parent company of the main business is RMB 790 / 1.01 / 1.36 billion), with a year-on-year increase of + 1.2% / + 32.2% / + 19.0% (+ 4.7% / 27.7% / + 34.5%), corresponding to pe27 / 20 / 17 times, maintaining the “buy” rating.
Risk tips: repeated epidemic risk, food safety risk, franchisee management and brand counterfeiting risk, raw material price fluctuation and poor investment income.
