\u3000\u30 China High-Speed Railway Technology Co.Ltd(000008) 60 Beijing Shunxin Agriculture Co.Ltd(000860) )
Event: the company issued the 2021 annual report. In 2021, the company achieved a total operating revenue of 14.869 billion yuan, a decrease of 4.1% and a net profit attributable to the parent company of 100 million yuan, a decrease of 75.6%; In a single quarter, 2021q4 achieved a total operating revenue of 3.26 billion yuan, an increase of 5.4% at the same time, and the net profit attributable to the parent company was – 270 million yuan, compared with – 14 million yuan in the same period last year; In 2022q1, the revenue was 3.91 billion yuan, a decrease of 28.8% and the net profit attributable to the parent company was 100 million yuan, a decrease of 72.1%, which was basically in line with the company’s performance forecast.
Baijiu revenue was flat and slightly decreased, and gross profit margin declined slightly. In terms of volume and price, the company’s Baijiu revenue was 10.23 billion yuan, down 0.4% at the same time, accounting for 3.1pcts to 68.8% of the company’s revenue, and the sales volume was 655000 kiloliters, down 5.0% at the same time. In terms of business, in 2021, the revenue of Baijiu from high, middle and low-grade liquor reached RMB 1.06/13.0/7.87 billion respectively, a year-on-year increase of +4.2%/-15.3%/+3.1%. The gross profit margin of Baijiu business was 37.7%, a year-on-year decrease of 1.5pcts, mainly due to the decline of product structure and the increase of discounts. Combined with the dealer data, the number of dealers of the company decreased by 33 in 2021.
The pork business was seriously dragged down and the company’s profitability declined. In terms of pork business, the company’s pork industry sector achieved an overall sales revenue of 3.6 billion yuan, a decrease of 22.3%. Among them, the sales revenue of slaughtering business is 3.31 billion yuan, and the sales revenue of breeding and livestock breeding industry is 290 million yuan. The overall decline is serious. Considering the fluctuation of pig price, we expect the profit of pork business to decline year-on-year; In terms of real estate business, the real estate business revenue in 2021 was 860 million yuan, an increase of 64.0% at the same time. Overall, the company’s gross profit margin in 2021 / 2022q1 was 27.9/32.9% respectively, with a year-on-year increase of -0.5 / + 3.9pcts; The annual sales expense ratio / management expense ratio in 2021 was – 0.5/0.7pcts year-on-year respectively. The sales expense and management expense in 2022q1 increased significantly, resulting in the decline of the company’s profitability.
The price of its products has been raised pending the recovery of the company. On the product side, the company focuses on making precious aging wine, continues to guide the upgrading of product structure, and raises the price of its products to alleviate the pressure on the cost side. In the future, the company will continue to focus on the two main businesses of liquor and meat. Among them, the Baijiu business will be upgraded in six aspects: refined management and digital operation, product structure, brand culture, marketing mode, value chain system and scientific research and development. It will continue to focus on the three strategic development markets of Beijing, Tianjin and Hebei, the Yangtze River Delta and the Pearl River Delta, create a “1+4+n” model market group and improve the product structure. In the medium and long term, Niulanshan, as the leader of the light bottle wine industry, is expected to increase the market share with high quality and high cost performance in the future and lead the continuous development of folk wine.
Profit forecast and investment suggestions: we adjusted the forecast of the company’s net profit attributable to the parent company from 2022 to 2024 to RMB 323 / 348 / 371 million (the original forecast value was RMB 406 / 436 / 482 million), corresponding to EPS of RMB 0.43/0.47/0.50 respectively, and the P / E ratio of the current stock price is 46 / 43 / 40x; Adjust the net profit forecast of Baijiu business to RMB 1.09/11.8/1.26 billion. If only considering the profit of Baijiu business, the P / E ratio of the current stock price is 14/13/12x, maintaining the “buy” rating.
Risk tip: the promotion of high-end products is not as expected; The real estate and slaughtering businesses were less than expected.
