\u3000\u3 Shengda Resources Co.Ltd(000603) 288 Foshan Haitian Flavouring And Food Company Ltd(603288) )
Event:
The company released the first quarterly report of 2022. During the reporting period, the company achieved a revenue of 7.210 billion yuan, a year-on-year increase of + 0.72%, and the net profit attributable to the parent was 1.829 billion yuan, a year-on-year increase of – 6.36%. The net profit not attributable to the parent was 1.791 billion yuan, a year-on-year increase of – 5.49%, and the basic EPS was 0.43 yuan. The company’s performance basically met the expectation under the current macro environment.
Comments:
The epidemic suppresses offline demand and new businesses grow against the trend
The company’s revenue growth rate in 2022q1 fell month on month. We believe that it is mainly due to the stagnation of offline catering in some regions caused by the epidemic, which affects the demand of condiment b-end scene. By category, the revenue of soy sauce / oyster sauce / sauce / other products reached RMB 40.76/11.31/807768 million respectively, with a year-on-year increase of – 0.5% / – 3.2% / – 8.6% / + 9.7%. The company’s core soy sauce, oyster sauce and sauce decreased slightly, while new products such as cooking wine and vinegar achieved contrarian growth, which is expected to become the fourth pole of the company’s growth. In terms of regions, the East / South / middle / North / West were + 5.6% / + 6% / – 9.3% / + 0.4% / – 7.3% respectively year-on-year, with a decline in the central and western regions. By channel, the company’s online / offline channels were + 202% / – 3.9% year-on-year, and the epidemic drove the passenger flow of commercial supermarket retail channels to be transferred to online channels. By the end of 2022q1, the company had 7139 offline distributors, a year-on-year decrease of 291.
The cost pressure continued, the product structure was upgraded and the gross profit margin was improved
The gross profit margin of the company in 2022q1 was 38.17%, with a year-on-year increase of – 2.77 percentage points. The decline in gross profit margin was mainly caused by the rising cost of raw materials such as soybeans, of which the price of soybean meal increased by about 36% year-on-year at the end of March. On the expense side, the company’s sales expense ratio is – 0.27 percentage points year-on-year. Under the pressure on the cost side, the company is expected to continue to promote cost reduction and efficiency increase, and alleviate the downward pressure on net interest rate by reducing expenses. In the short term, the company is expected to promote the average price increase mainly through the improvement of product structure in 2022 to cope with the upward pressure on costs.
Investment advice
We maintain the previous profit forecast. It is expected that the company will achieve a revenue of 28.224/31.734/35.961 billion yuan from 2022 to 2024, with a year-on-year increase of 12.88% / 12.44% / 13.32%; The net profit attributable to the parent company was RMB 7.500/8.588/9.894 billion, with a year-on-year increase of 12.44% / 14.50% / 15.20%; EPS is 1.78/2.04/2.35 yuan respectively, corresponding to 51 / 45 / 39 times of the current share price PE. As a leader in the condiment industry, the company has relatively stronger anti risk ability by relying on scale effect under the influence of cost pressure. At present, the average PE of Shenwan condiment industry in 2022 is 45 times, and the historical center of the company is 68 times. The company is given a PE valuation of 55 times in 2022, corresponding to the target price of 97.9 yuan, maintaining the “overweight” rating.
Risk tips
