\u3000\u3 Shengda Resources Co.Ltd(000603) 517 Juewei Food Co.Ltd(603517) )
In 2021, the company achieved an operating revenue of 6.549 billion yuan, a year-on-year increase of + 24.12%; The net profit attributable to the parent company was 981 million yuan, a year-on-year increase of + 39.86%; Deduct the net profit not attributable to the parent company of 719 million yuan, a year-on-year increase of + 5.87%. In 21q4, the company achieved an operating revenue of 1.702 billion yuan, a year-on-year increase of + 22.39%; The net profit attributable to the parent company was 16.86 million yuan, a year-on-year increase of – 90.7%; 22q1, the company achieved an operating revenue of 1.688 billion yuan, a year-on-year increase of + 12.09%; The net profit attributable to the parent company was 89.07 million yuan, a year-on-year increase of – 62.24%.
Comments:
21. The annual performance is in line with expectations and can be improved quarter by quarter. The poor performance of net profit attributable to the parent company in 21q4 is mainly due to the company’s more investment in franchisee subsidies and other expenses, and the lower apparent gross profit margin in Q4 is mainly due to the significant increase in the proportion of supply chain revenue with low gross profit margin. 22q1 gross profit margin rose from – 4.2pct to 30.3% year-on-year, mainly due to the increase in the proportion of Supply Chain Revenue and the rise in the cost side price of raw materials. However, considering that the company usually has frozen goods inventory, the pressure on the cost side is expected to lag behind. The sales expense ratio of 22q1 increased from + 7.3pct to 14.0% year-on-year, which is mainly reflected in the expenses such as store opening subsidies, which lowered the net interest rate to 5.3%. In the follow-up, the cost ratio is expected to decline month on month.
In the past 21 years, there were 1315 net stores, and the single store returned to the level of about 91% in the same period of 19 years. In the whole year of 21, the revenue of the main business was + 17.27% year-on-year, and the total number of stores reached 13714. The net increase of stores contributed 11% of the growth rate, and the same store contributed about 6% of the growth rate. Among them, the ton price of fresh goods increased by about 2.85% year-on-year, the sales volume increased by + 12.26% year-on-year, the year-on-year + 230% to 136 million yuan after the consolidation of packaging products at Wuhan zero, and the gross profit margin of fresh goods increased by 0.94 PCT to 34.29%. It is expected that it is mainly due to the overall low price of raw materials. Other main businesses (mainly supply chain revenue) increased from + 212% to 541 million yuan year-on-year, with significant contribution from the revenue side, but the gross profit margin was 5.97%, and the overall profitability was weak. The main business of 22q1 halogen products increased by 2.18% year-on-year, and the supply chain revenue increased by + 251% year-on-year.
Termination of equity incentive is not expected to change the long-term upward goal. We believe that the company’s failure to complete the equity incentive target and terminate the equity incentive plan in 21 years is not a lack of confidence in the company’s medium and long-term development. It is expected that the uncertainty is further enhanced under the influence of the epidemic, regardless of the industry or capital market. The termination of the equity incentive target is expected to be more based on the consideration of the enthusiasm of internal organizations. Looking forward to the follow-up, the overall strategy of opening stores this year is still inclined to take stores against the trend. The opening plan of 1500 stores remains unchanged. With the promotion of the plan of accepting all rivers and starting a prairie fire, the opening of stores throughout the year may reach a new high. Under the influence of the overall epidemic this year, the uncertainty of single stores has increased. It is expected that the main business is expected to maintain a growth rate of 10-15% in 22 years, the equity incentive fee has been reflected in more than 31 million in 21 years, and the remaining payment is expected to be reflected in 22q2. In the medium and long term, the epidemic has a certain impact on the confidence of chain businesses, whether single stores or franchisees. However, Jue Wei has increased brand construction and marketing activities at the store end by subsidizing franchisees. These measures have substantially further enhanced the company’s competitive advantage.
Profit forecast and investment rating: under the short-term raw material cost pressure and the impact of the epidemic, juewe’s business model has been more questioned. We believe that the current expected response is sufficient. In the long run, Jue Wei continues to enhance its long-term core competitiveness through various measures such as taking stores against the trend and boosting single stores. When the epidemic is good, its performance has high flexibility and is waiting for a turnaround. We expect the earnings per share of the company to be 1.46 yuan, 1.98 yuan and 2.53 yuan respectively in 22-24 years, maintaining the “buy” rating of the company.
Risk factors: repeated epidemics, intensified regional market competition, sharp rise in raw material prices and food safety problems.
