\u3000\u3 Shengda Resources Co.Ltd(000603) 043 Guangzhou Restaurant Group Company Limited(603043) )
Quick freezing continued to grow and maintained the “overweight” rating
The company achieved a revenue of 747 million yuan in 2022q1, an increase of 11.5% year-on-year; The net profit attributable to the parent company was 53 million yuan, a year-on-year increase of 10.4%. We maintain the profit forecast for 20222024. It is estimated that the net profit attributable to the parent company in 20222024 will be 640, 750 and 860 million yuan, and the EPS will be 112, 1.32 and 1.52 yuan. The current share price corresponds to 21.0, 17.8 and 15.4 times of PE. In the future, driven by the two wheels of food and catering business, the company’s performance can grow steadily and maintain the “overweight” rating.
Rapid freezing and catering business continued to grow
(1) by business: the ratio of 2022q1 moon cake series products decreased by 2.26%; With the continuous release of Meizhou’s production capacity and better demand for quick-frozen food, the revenue of quick-frozen food increased by 27.66% year-on-year; Catering business increased by 26.1% year-on-year. (2) In terms of subregions, the base market continued to be deeply cultivated, and the market in the province grew steadily, with a year-on-year increase of 10.6%; We continued to explore markets outside the province, the number of dealers increased by 6 to 401, and the market revenue outside the province increased by 15.94% year-on-year. (3) In terms of sub channels, direct sales increased by 13.88% year-on-year and distribution increased by 8.73% year-on-year. Looking forward to 2022, with the release of production capacity, the further improvement of omni-channel layout, the coordinated development inside and outside the province, and the continuous recovery of catering business, the company’s revenue can still grow steadily.
In 2022q1, the net profit margin was basically flat and the gross profit margin increased
In 2022q1, the net profit margin was basically flat, and the gross profit margin increased by 1.3pct to 30.3% year-on-year, due to the increase in the proportion of high gross profit businesses, such as catering business, which increased by 3.5pct to 29.7%. During the period of market development, the sales rate remained high, and the sales expense rate in 2022q1 increased by 0.7pct to 9.5% year-on-year. Looking forward to 2022, the company can alleviate the cost pressure by raising prices and other means; During the market development period, the cost investment is still large, but under the refined management, the rate is expected to be relatively stable and the net profit can increase steadily.
The release of production capacity will boost growth, accelerate the layout and explore the East China market
Guangzhou Restaurant Group Company Limited(603043) food and catering businesses are driven by two wheels, establishing brands through catering business and expanding the scale of food business. In 2022, the production capacity of Meizhou base will climb and the technical transformation of Guangzhou and Maoming bases will be released one after another, which can support the accelerated growth of the company’s quick freezing and other businesses. The company’s multi-channel layout accelerates the development of the East China market and has great development potential.
Risk tips: macroeconomic fluctuation risk, market expansion and competition risk, raw material price fluctuation risk, etc
