\u3000\u3 Shengda Resources Co.Ltd(000603) 027 Qianhe Condiment And Food Co.Ltd(603027) )
Events
The company issued the 2021 annual report and the performance announcement of the first quarterly report of 2022: the company achieved a total operating revenue of 1.93 billion yuan (+ 13.7%), a net profit attributable to the parent of 220 million yuan (+ 7.6%), and a net profit attributable to the parent of 218 million yuan (+ 8.3%) after deduction; In single 21q4, the company achieved a total operating revenue of 570 million yuan (+ 21.0%), a net profit attributable to the parent company of 90 million yuan (+ 594.2%), and a deduction of non net profit of 86.325 million yuan (+ 561.9%); 22q1, the company achieved a total operating revenue of 480 million yuan (+ 0.9%); The net profit attributable to the parent company is RMB 60 million (+ 38.5%), deducting non net profit of RMB 50 million (+ 27.1%), and the company’s 22q1 performance is slightly lower than expected.
Comments
The contribution of high-quality fresh products has increased, and the momentum of national expansion has not decreased
1) by product, in 2021, the company’s soy sauce revenue was 1.18 billion yuan (+ 12.2%), volume and price were + 30.2% / – 14.0%, 21q4 (+ 18.0%), 22q1 (- 1.3%); In 2021, vinegar achieved revenue of 320 million yuan (+ 10.0%), volume and price of + 10.0% / + 13.5%, 21q4 (+ 35.0%), 22q1 (+ 2.6%). In 2021, the core soy sauce category achieved steady growth, of which high fresh soy sauce accounted for more than 60%, effectively driving the growth of revenue. Since the second half of the year, the company has launched parity zero addition products, and the ton price has decreased under the adjustment of product structure. 22q1 revenue is under pressure, mainly because of the dislocation of the Spring Festival stock time and the impact of the epidemic, and the consumption of the company’s core supermarket channels is limited;
2) in terms of sub regions, in 2021, the Eastern / Southern / central / northern / western regions achieved operating revenue of RMB 390 / 1.2 / 1.8 / 2.7 / 940 million respectively, with a year-on-year increase of + 17.3% / + 51.7% / + 29.4% / + 10.5% / + 7.3% respectively; 21q4 + 15.4% / 313.2% / 41.1% / 12.7% / 15.2% year on year respectively; 22q1 was – 8.0% / – 3.1% / 12.6% / 15.7% / 1.0% year-on-year respectively. At the end of 2021, there were 1791 dealers, with a net increase of 387, including 63 in 21q4 and 108 to 1899 in 22q1 compared with the beginning of the year. The company has continued to cultivate channels in the western base areas and made key breakthroughs in foreign markets. Among them, the markets with strong business supermarket channels in the East and North have begun to orderly promote the layout of traditional channels, and the momentum of national expansion has not decreased,
The cost side is under pressure, and the cost contraction contributes to the profit elasticity
1) gross profit margin: in 2021, the gross profit margin of the company was 40.4% (- 3.5pct), that of 21q4 was 37.9% (+ 8.6pct), and that of 22q1 was 35.0% (- 8.4pct). The decline in gross profit margin is mainly due to the sharp rise in the cost of beans raw materials and the increase in the proportion of low-cost products, which reduces the gross profit margin space. It is expected that the short-term cost will remain high and the cost pressure is large;
The net interest rate of the company is 217t + 11.5% and the net interest rate in 2021t is 217t + 15.5%. The increase of net profit margin is mainly due to the contraction of advertising expenses of the company. It is expected that the net profit space is expected to be further thickened under the continuous reduction of fees and efficiency of the company;
3) expense rate: in 2021, the sales / management / R & D / financial expense rate was + 3.21 / – 0.25 / + 0.21 / + 0.05pct year on year respectively, and the 22q1 sales / management / R & D / financial expense rate was – 10.6 / + 0.03 / – 0.4 / – 0.2pct year on year respectively. The change in the sales expense ratio is mainly due to the company’s increased TV advertising in 2021, resulting in a large year-on-year increase in promotion and advertising expenses. The advertising expenses of 22q1 company return to normal, and the gross sales difference is significantly improved month on month. The company is expected to further optimize the cost distribution structure, improve the cost-effectiveness ratio and release the profit elasticity.
The short-term performance is expected to improve and the long-term growth path is clear
1) in the short term, the company actively adjusted and launched a new phase of equity incentive plan and fixed increase plan for major shareholders at the beginning of the year, demonstrating its confidence in the long-term development of the company. In addition, the company has actively developed traditional channels and continuously optimized channel policies. A round of distribution and dynamic sales feedback has been completed for parity zero addition products, with sufficient growth momentum; Superimposed with the release of price increase dividends, the convergence of publicity expenses and the improvement of promotion expenses, and the profitability of the whole year is expected to improve quarter by quarter;
2) in the medium and long term, the growth path of the company is clear, and we are optimistic about the promotion of the company to the head of the second echelon of the industry. The company’s channel strategies in different regions of the country are adapted to local conditions. In the initial stage, the market focuses on “business supermarket + Zero addition”. In the stable stage, the market focus turns to traditional channels, and in the mature stage, the market continues to cultivate channels. We believe that the company continues to enrich the channel structure, improve the operation efficiency and channel competitiveness, and there is still a large space for channel expansion and sinking in the future.
Profit forecast and valuation we predict that the revenue growth rate of the company from 2022 to 2024 will be 15.5%, 22.0% and 22.0% respectively; The growth rate of net profit attributable to the parent company was 37.7%, 32.6% and 26.1% respectively; EPS is 0.38, 0.51 and 0.64 yuan / share respectively (fixed increase dilution is not considered); PE was 47, 35 and 28 times respectively.
The risk indicates that the epidemic situation repeatedly affects the downstream demand, the dynamic sales of zero addition products is less than expected, and the channel development is less than expected.
