\u3000\u3 China Vanke Co.Ltd(000002) 568 Shanghai Bairun Investment Holding Group Co.Ltd(002568) )
Event: the company released the annual report of 2021 and the quarterly report of the first quarter of 2022. In 2021, the company realized an operating revenue of 2.594 billion yuan, a year-on-year increase of 34.66%, and a net profit attributable to the parent company of 666 million yuan, a year-on-year increase of 24.38%; In 2022q1, the operating revenue was 539 million yuan, a year-on-year increase of 4.14%, and the net profit attributable to the parent company was 92 million yuan, a year-on-year decrease of 29.94%.
Channel reform brings short-term pain, and new product cultivation broadens future growth. In terms of products in 21 years, the company’s pre mixed cocktail / edible essence revenue was RMB 2.285273million, a year-on-year increase of 33.49%/37.72%; In terms of sales model, the company focuses on developing digital retail channels, achieving a year-on-year revenue growth of 70.29% in 21 years, and offline / ready to drink channels achieved a year-on-year growth of + 23.70% / + 52.35% respectively. From Q1 to Q4 in 2021, the company achieved revenue of RMB 517 / 6.95 / 7.03 / 680 million in each quarter, with a year-on-year increase of 52.88% / 54.35% / 30.98% / 12.97%; 22q1 achieved a revenue of 539 million yuan, a year-on-year increase of 4.14%. The company’s revenue decreased month on month. We believe that first, the company began to implement the channel flattening reform, and improved the efficiency of management and communication by canceling the regional level, which brought pain in the short term; Second, although Qingxin has recorded rapid growth and become the third largest category of the company, we judge that because the current crowd portrait and consumption scene are still in the cultivation stage, it will divert slightly drunk sales in the short term or to a certain extent; Third, the impact of events and epidemic situation on logistics and other delivery; Fourth, the intensification of market competition and the company’s price increase have a certain impact on sales.
The cost and marketing side put pressure on profits, so we should focus on the future without changing the growth logic. ① The company achieved a gross profit margin of 65.43% in 2021, with a year-on-year increase of -0.07pct; The rates of sales / management / Finance / R & D expenses were 21.85% / 5.26% / – 0.79% / 2.82% respectively, with a year-on-year change of -0.37 / + 0.03 / – 0.38 / – 0.49pct; ② In 22q1, the company achieved a gross profit margin of 62.51%, with a year-on-year rate of -4.81pct, and the rates of sales / management / Finance / R & D expenses were 25.58% / 6.76% / – 0.16% / 3.26% respectively, with a year-on-year change of + 2.93 / + 2.19 / + 1.43 / + 0.71pct. The profit side of 21q4 and 22q1 of the company is under pressure. We think it is related to the company’s increasing investment in consumer education. At the same time, the rising cost of upstream raw materials also puts some pressure on profits.
Channel reform and clear positioning have consolidated the foundation for growth, and consumption upgrading has accelerated the development of the company. We believe that channel reform and the further consolidation of refreshing positioning are the core of observing the fundamental changes of the company. In terms of channel reform, the company’s past channel management is more suitable for the sales growth under category dividends. In the future, with the gradual increase of the company’s SKUs and the continuous improvement of the channel network, fine management will be put on the agenda. The flattening of the channel is conducive to the sinking of the company’s channel and the improvement of management efficiency. In terms of refreshing positioning, with the increase of the company’s product series, the company’s price band layout becomes wider and the number of people covered is increasing, which also makes the positioning of products more accurate. The company increases the cost investment, which can better position its products, cultivate potential consumers for the echelon of key product lines, and accumulate crowd assets, which is conducive to the long-term development of the company. We believe that the core logic of the company lies in the continuous improvement of consumption scenarios. At present, the company’s reform and the launch of new products continue to consolidate around this point. We suggest actively paying attention to the reform and cultivation of the company and waiting for the acceleration of the company’s fundamentals.
Profit forecast: due to the influence of the company’s channel reform and rising costs, it is expected that the company’s revenue will be adjusted from 3.7/5 billion yuan to 3.3/4.2 billion yuan from 2022 to 2023, with a year-on-year increase of + 28.60% / 27.02%, and the net profit attributable to the parent company will be adjusted from 1.1/1 billion yuan to 8 / 1 billion yuan, with a year-on-year increase of + 20.18% / 30.03%.
Risk tip: food safety risk, intensified industry competition, covid-19 epidemic impact, cost rise risk.
