\u3000\u3 China Vanke Co.Ltd(000002) 570 Beingmate Co.Ltd(002570) )
Events
On the evening of April 28, 2022, the company released the annual report of 2021 and the first quarterly report of 2022: the revenue in 2021 was 2.54 billion yuan (the same decrease of 4.7%), the net profit attributable to the parent company was 73 million yuan (the same increase of 123%), and the deduction was not 07 million yuan (the same increase of 101.5%). In 2022q1, the revenue was 814 million yuan (with an increase of 44%), the net profit attributable to the parent company was 20 million yuan (with an increase of 38.5%), and the deduction was 16 million yuan (with an increase of 266%).
Key investment points
Marginal improvement in the fourth quarter and beneficial opening in the first quarter
In 2021, the company’s revenue was 2.540 billion yuan (with a decrease of 4.7%), the net profit attributable to the parent company was 73 million yuan (with an increase of 123%), and the deduction of non-profit was 07 million yuan (with an increase of 101.5%); Among them, the revenue in 2021q4 was 881 million yuan (with an increase of 92%), the net profit attributable to the parent company was 35 million yuan (with an increase of 109%), and the deduction was 15 million yuan (with an increase of 103%), which accelerated the improvement month on month in the fourth quarter and ended smoothly in 2021. In 2022q1, the revenue was 814 million yuan (with an increase of 44%), the net profit attributable to the parent company was 20 million yuan (with an increase of 38.5%), and the deduction was 16 million yuan (with an increase of 266%), which was beneficial in the first quarter and accelerated the improvement. The gross profit margin in 2021 was 46.922% (with an increase of 1.1pct), of which 2021q4 was 36.13% (with an increase of 0.9pct) and 2022q1 was 38.37% (with a decrease of 14.5pct), which was caused by the rise of raw materials. The net profit margin in 2021 was 3.20% (with an increase of 15pct), of which 2021q4 was 4.29% (with an increase of 85pct) and 2022q1 was 2.58% (with a decrease of 0.7pct), mainly due to the decline of gross profit margin. At the end of 2022q1, the contract liabilities were 57 million yuan, a month on month decrease of 22 million yuan and a year-on-year increase of 22 million yuan, which is at a historically high position, and the reservoir effect is expected to restart; In 2022q1, the net cash flow from operating activities was 53 million yuan (an increase of 145%), of which the collection was 813 million yuan (an increase of 50.6%), and the Spring Festival effect was obvious.
The contribution of milk powder volume exceeds the price, and the new retail model is progressing smoothly
In terms of products, the revenue of milk powder in 2021 was 2.116 billion yuan (12.5% decrease), accounting for 83.34% (7 PCT decrease) and the gross profit margin was 54% (6 PCT increase); The revenue of rice flour was 18 million yuan (with a decrease of 45%), accounting for 0.72% (with a decrease of 0.5pct), and the gross profit margin was 30% (with a decrease of 5.6pct); The revenue of other categories was 405 million yuan (with an increase of 90%), accounting for 15.94% (with an increase of 8pct), and the gross profit margin was 10.46% (with a decrease of 11.5pct).
In terms of volume and price, the total sales volume of milk powder in 2021 was 17100 tons (with an increase of 2%), and the corresponding ton price was 123800 yuan / ton (with a decrease of 14%); The total sales volume of rice flour is 0400 tons (with a decrease of 40%), and the corresponding ton price is 51900 yuan / ton (with a decrease of 9%); Other total sales volume is 0200 tons (with a decrease of 38%), and the corresponding ton price is 2096300 yuan / ton (with an increase of 204%).
By channel, the dealer’s revenue in 2021 was 918 million yuan (with a decrease of 2%), accounting for 36% (with an increase of 1PCT); The revenue of direct supply customers is 93 million yuan (with a decrease of 82%), accounting for 4% (with a decrease of 16 PCT); E-commerce revenue was 392 million yuan (with an increase of 7%), accounting for 15.5% (with an increase of 1.7 PCT); The revenue of the general underwriter was 427 million yuan (with a decrease of 22%), accounting for 17% (with a decrease of 4pct); The revenue of the underwriters was 329 million yuan (106% increase at the same time), accounting for 13% (7 PCT increase at the same time). The successful promotion of the new retail model has enhanced the bargaining power of the company to downstream channels and stores; Other revenue was 13 million yuan (with a decrease of 19%), accounting for 0.5% (with a decrease of 0.1pct); Other business revenue was 366 million yuan (with an increase of 202%), accounting for 14% (with an increase of 10 PCT). By 2021, there were 1526 dealers, with a net increase of 584, including 226 in the East, 174 in the South First District, 277 in the South Second District, 248 in the west, 463 in the North First District, 109 in the North Second District and 29 in other regions.
In terms of production capacity, the total production capacity of milk powder in 2021 will be 18600 tons (with an increase of 5%), the total production capacity of rice flour will be 0400 tons (with a decrease of 34%), and the total production capacity of other products will be 0200 tons (with a decrease of 47%).
Continue to strengthen the main brands and cultivate new retail channels
On the brand side, by launching a series of variety shows such as “travel notes of youth ring” of Zhejiang satellite TV, and holding hands with important industry media such as Netease, baobaoshu, Meiyou and childcare network, the brand exposure rate is greatly improved; Through the offline store interactive program “beautiful mother has something to say”, we focused on key areas, conducted consumer interviews in more than 400 stores, and entered the z-era Mommy, covering a total of more than 150 million people.
On the product side, we continue to tap the nutritional needs of various groups under the new consumption situation, and innovate and launch new products such as “eye color” series lutein ester prepared milk tablets, “Mars baby” series children’s milk powder, Doudou milkshake, “sheep Yibei” series formula sheep milk powder and so on.
On the channel side, the new retail team has built a business layout with Beijia mall, tmall flagship store and jd.com flagship store as the core brand windows and content e-commerce platforms such as Tiktok, Kwai and xiaohongshu as the extension through “one store, one yard and one policy”.
2022 business plan: 1) build a big brand; Effectively improve brand voice through CCTV big country brand column; Sink the third, fourth and fifth tier market with the help of CCTV media; Launch a series of big country brand activities to enhance the brand tone; Continue to build IP and shape the young personality of the brand. 2) Strengthen the main categories, promote the functionalization of categories, build user reputation, improve user drainage efficiency, and explore market segments; 3) Comprehensively sort out and optimize channels, deeply cultivate and refine infant and child channels, and strengthen the new retail layout; 4) Optimize industrial layout and improve operation efficiency; 5) Build a vision organization and promote cultural innovation.
Profit forecast
At present, the company is in the dilemma reversal stage, and the marginal improvement is accelerated. We expect that the EPS will be 0.12/0.17/0.24 yuan from 2022 to 2024, and the current share price corresponding to PE will be 35 / 25 / 18 times respectively. It will be covered for the first time and given a “recommended” investment rating.
Risk tips
Macroeconomic downside risk, epidemic drag on consumption, new product promotion is less than expected, raw materials rise sharply, production capacity is less than expected, single product risk, etc.
