\u3000\u3 China Vanke Co.Ltd(000002) 557 Chacha Food Company Limited(002557) )
Event:
The company released the first quarterly report, Q1 achieved an operating revenue of 1.432 billion, the same as + 3.86%; The net profit attributable to the parent company is 208 million, the same as + 5.15%; Deduct non net profit of 182 million, the same as + 2.64%.
1. The dislocation of peak season leads to the low growth rate of Q1, and the annual performance target remains unchanged. This year’s Spring Festival gift demand is strong, and the company’s annual sales are good. However, due to the early spring festival this year, part of the revenue is included in 2021q4. Since March, the epidemic has led to the obstruction of logistics transportation and e-commerce delivery in some regions, affecting sales. However, the Q1 base last year was high, so the growth rate of revenue and profit decreased. Among them, the growth of melon seeds is relatively stable, the demand is damaged under the nut epidemic, and the growth rate slows down. However, combined with the results of the two quarters, the company still maintained steady and rapid growth. The total growth rate of revenue and profit 2021q4 + 2022q1 was 17.15% / 14.65% respectively, and the total growth rate of deducting non net profit was 19.13%. Although the price increase on the profit side was conducted smoothly, the increase in the proportion of low gross profit nuts, the rise in the price of packaging materials and the increase in cost investment led to a slower growth rate than that on the income side, which was slightly lower than expected. Home life can promote the consumption of melon seeds. In April, the sealing control in some areas was upgraded, but the sales still increased well. After the subsequent delivery logistics returns to normal, there is expected to be a demand for replenishment of inventory. At present, the impact of the epidemic on the annual income is limited, and the growth target at the beginning of the year will still be successfully achieved.
2. The profitability is stable, and the operating cash flow is negative, mainly due to the difference of payment rhythm. The gross profit margin of Q4 last year and Q1 this year is estimated to be 32.29%, up 3.06 PCT year-on-year. The gross profit margin of 2022q1 is + 0.18 PCT to 30.86% year-on-year. The increase is narrowed, mainly due to the increase in the proportion of low gross profit nut products and the increase in the cost of packaging materials. On the expense side, due to the large launch of annual goods Festival Promotion and promotion expenses, the total sales rate in the two quarters increased by 3.14pct year-on-year, which was mainly recorded in Q4 last year. Therefore, the sales rate in Q1 this year decreased by 0.14pct to 9.23% year-on-year. Therefore, the total net interest rate in the two quarters decreased slightly by 0.33pct to 15.34%. The Q1 net interest rate of this year increased slightly by 0.18pct to 14.51% year-on-year, and the overall profitability was stable. The cash flow from operating activities in Q1 was -77 million yuan, compared with 273 million yuan in the same period last year, mainly due to the poor payment time for upstream raw materials. From the perspective of Q4 last year and Q1 this year, the total net cash flow from operating activities was -108 million yuan, compared with -194 million yuan in the same period last year, which is the normal payment rhythm.
3. Internal adjustment and external channel expansion are steadily promoted, and the long-term growth logic is determined. Last year, the company adjusted its organizational structure internally, promoted the reform of marketing system, established two major systems of category and sales, strengthened Wuxi Online Offline Communication Information Technology Co.Ltd(300959) integration and coordination, and effectively improved its internal operation efficiency. The product side melon seeds category continues to develop flavored products, with frequent new flavors, such as ice cream melon seeds, sweet scented osmanthus milk tea melon seeds, etc. the scope of trial sales of rattan pepper melon seeds in cities is expected to be further expanded this year, nut side oatmeal and probiotics are still steadily promoted, and the penetration rate and contribution income are expected to continue to increase. In 2021, the company launched a series of marketing around the 20 years since its establishment, joined hands with China National Geographic to create the first nut documentary “Qiaqia, the seed of time”, and launched a variety of CO branded products. In terms of nuts, we are committed to popularizing nut nutrition knowledge and creating the exclusive IP of Dr. nuts for dynamic video transmission. The channel side actively promoted the channel intensive cultivation strategy, the channel digital platform controlled nearly 120000 terminal outlets, and the distribution rate of intensive cultivation market, the jump rate of stores and the monthly per capita output gradually increased. The e-commerce channel achieved positive growth in the whole year of last year through new channel breakthroughs such as marketing innovation, Tiktok live broadcast, Wuxi Online Offline Communication Information Technology Co.Ltd(300959) . Although the prices of melon seed raw materials and packaging materials have continued to rise this year, it is expected that the price increase can basically cover the cost increase. At the same time, the company is expected to take advantage of the price increase to improve the quality of red bag melon seeds, continue to promote the upgrading of high-end melon seed brands and packaging, increase brand investment and optimize product structure. In the long run, the gross profit margin of melon seed series products is expected to rise steadily. In 2022, the company will firmly implement the “double hundred strategy” of “ten billion revenue and one million terminals”, continuously optimize and upgrade the product structure, and the terminal coverage and control are expected to continue to improve, helping the performance to maintain rapid growth.
4. Profit forecast and investment rating Chacha Food Company Limited(002557) is a leading enterprise in the snack food industry, with high brand awareness and reputation, strong bargaining power and excellent anti risk ability in the face of rising costs. We expect that the company’s EPS from 2022 to 2024 will be 2.18 yuan, 2.55 yuan and 2.96 yuan respectively, and the corresponding PE will be 24, 21 and 18, giving a “buy” rating.
5. Risk Tips 1) food safety risks; 2) The promotion of new products is less than expected; 3) The impact of the epidemic exceeded expectations; 4) The cost rise is higher than expected; 5) Risks such as channel development falling short of expectations.
