\u3000\u3 Shengda Resources Co.Ltd(000603) 345 Fu Jian Anjoy Foods Co.Ltd(603345) )
Event: the company released the 21st Annual Report and the first quarterly report of the 22nd year. In 2021, the company realized revenue / net profit attributable to parent company / deduction of net profit attributable to non parent company of RMB 9.272682/560 billion, with a year-on-year increase of + 33.1% / + 13.0% / + 0.5%, and single Q4 revenue / net profit attributable to parent company / deduction of net profit attributable to non parent company of RMB 3.176/1.88/178 billion, with a year-on-year increase of + 28.1% / – 16.1% / – 17.9%. 22q1 achieved revenue / net profit attributable to the parent company / deduction of net profit not attributable to the parent company of RMB 2339 / 204 / 178 million, a year-on-year increase of + 24.2% / + 17.7% / + 14.0%.
Prefabricated vegetables continued to grow at a high rate, and the epidemic affected Q1 structure. In terms of revenue categories, the revenue of rice noodles / meat products / surimi / dishes in 21 years was 20.5/21.4/34.8/1.43 billion yuan respectively, with a year-on-year increase of + 24% / + 19% / + 23% / + 112% respectively. Prefabricated dishes maintained rapid growth under Mr. bingbiao and XINHONGYE, and the second growth curve was significant. In terms of channels, the revenue of dealers / supermarkets / special communication direct sales / e-commerce in 21 years was 77.2 / 9.2 / 4.4 / 180 million yuan respectively, with a year-on-year increase of + 32% / + 10% / + 173% / + 102% respectively. The decline in the growth rate of supermarkets channels was mainly due to the high base of the epidemic in 20 years, and the newly established direct sales department was merged with the original special communication channel. The revenue of 22q1 meat products / surimi was + 0% / + 1% year-on-year respectively, mainly due to the impact of the epidemic in many places on the demand of b-end, while the C-end of rice noodles benefited from the epidemic, with a year-on-year increase of + 17%, and the year-on-year increase of + 130% of dish products remained high.
Cost pressure affected Q4 profitability, but the quarter on quarter improvement exceeded expectations. The net profit rates of 21q4 and 22q1 were 5.9% / 8.7% and 5.6% / 7.6% respectively, with deduction of non net profit. The year-on-year rate was – 3.1 / – 0.7pct. Specifically, 1) the gross profit rates of 21q4 and 22q1 were 22.4% / 24.2% respectively, the sales expense rates were 9.3% / 10.3% respectively, and the gross sales difference was 13.1% / 13.9% respectively, with year-on-year rate of – 3.8 / – 1.6pct, mainly due to the increase in the cost of raw materials such as oil and soybean protein, and the increase in freight and wages; 2) The management fee rates of 21q4 and 22q1 were 3.6% / 3.0% respectively, with a year-on-year increase of – 0.2 / + 0.3pct, mainly due to the decrease of equity incentive fees; 3) The financial expense rates of 21q4 and 22q1 were 0.1% / – 0.3% respectively, with a year-on-year increase of + 0.1 / – 0.3pct. The decrease in Q1 was mainly due to the arrival of fixed increase funds and the increase of interest income. From the month on month perspective, the profitability improved quarter by quarter. The non net interest rate deducted in 21q4 and 22q1 was + 2.1 / + 2.0pct respectively. The recovery in Q1 was stronger than expected, mainly due to the slight decrease in the procurement cost of meat and surimi. At the same time, the company’s Mr. frozen products and XINHONGYE had strong profitability in Q1 peak season.
It is planned to acquire Hubei xinliuwu and further improve the layout of upstream raw materials. The company plans to acquire 70% equity of Hubei xinliuwu food with no more than 644 million yuan. Xinliuwu is mainly engaged in crayfish and freshwater surimi processing. The revenue / net profit in 2021 is 820 / 60 million yuan respectively, and the net profit commitment from 2022 to 24 is no less than 7 / 0.8 / 0.9 million yuan respectively.
Profit forecast and investment suggestions
Considering the impact of the epidemic on b-end demand and the better than expected improvement of Q1 profitability, we slightly lowered the revenue assumption for 202223 and slightly increased the gross profit margin assumption. It is predicted that the net profit attributable to the parent company in 202224 will be RMB 957 / 1266 / 1609 million (compared with RMB 921 / 1190 million in 22-23 years before the adjustment). The layout of the company’s capacity channels is clear and the predictability of cash flow is strong. The corresponding target price under the FCFE model is RMB 181.20, maintaining the “overweight” rating.
Risk tips
Risk of price rise of raw materials; Risk of epidemic affecting catering demand; Production capacity expansion is less than expected risk, etc.
