\u3000\u3 Bohai Water Industry Co.Ltd(000605) 338 Zhongyin Babi Food Co.Ltd(605338) )
Events
On the evening of April 28, 2022, the company released the first quarterly report of 2022: the revenue of 2022q1 was 310 million yuan (with an increase of 22.4%), the net profit attributable to the parent company was 01 million yuan (with a decrease of 89%), and the non net profit deducted was 39 million yuan (with an increase of 193%).
Key investment points
The performance is in line with expectations, and the fair value disturbs the net profit
The company’s 2022q1 revenue was 310 million yuan (increased by 22.4%), the net profit attributable to the parent company was 01 million yuan (decreased by 89%), and the non net profit deducted was 39 million yuan (increased by 193%). The faster growth rate of deduction than net profit is due to the decrease in income from changes in fair value (affecting net profit of 38 million yuan) caused by the company’s indirect holding of Eastroc Beverage (Group) Co.Ltd(605499) shares. The gross profit margin of 2022q1 was 27.4% (with an increase of 4.7pct), which was driven by the high growth of group meals. The net interest rate of 2022q1 is 0.38% (the same as minus 5pct), which is caused by changes in fair value. In 2022q1, the sales expense rate was 4.37%, with a decrease of 7.5pct, which was caused by the adjustment of the company’s product strategy and the reduction of corresponding expenses. At the end of 2022q1, the contract liabilities were 06 million yuan, and the ring increase and the same increase were both 01 million yuan. In 2022q1, the net cash flow from operating activities was – 19 million yuan (with an increase of 12%), of which the collection was 349 million yuan (with an increase of 24%).
Wuhan stores are under its command, and the group meal business continues to grow rapidly
In terms of stores, at the end of 2022q1, the company had 4177 stores, with a net increase of 716 stores, which was due to the company’s inclusion in the acquisition of Wuhan stores, including 247 Barbie stores. We expect franchisee stores to grow by double digits year-on-year in the first quarter. By the end of 2022q1, there were 30 dealers and 9 new ones.
In terms of products, the revenue of food in 2022q1 was 278 million yuan (a 23% increase), accounting for 90%; Among them, the revenue of pastry was 127 million yuan (with an increase of 45%), accounting for 41%; Fillings: 70 million yuan (same decrease of 1%), accounting for 22.5%; The purchased food was 81 million yuan (with an increase of 19%), accounting for 26%. In 2021, the packaging and auxiliary materials will be 21 million yuan (increased by 20% at the same time), accounting for 7%; The service fee was RMB 100 million (with an increase of 9%), accounting for 3.4%.
From the perspective of different channels, the franchise revenue in 2022q1 was 232 million yuan (with an increase of 13%), accounting for 75%; The direct operating revenue was 07 million yuan (with an increase of 74%), accounting for 2%; The group meal revenue was 64 million yuan (with an increase of 60%), accounting for 21%. The group meal continued to grow rapidly, of which the dealer group meal was 12 million yuan (with an increase of 158%), accounting for 4%.
In terms of subregions, the revenue of East China in 2022q1 was 283 million yuan (with an increase of 22%), accounting for 91%, and the growth rate of mature markets was stable; The revenue of South China was 18 million yuan (with an increase of 8%), accounting for 6%; The revenue of North China was 08 million yuan (with an increase of 68%), accounting for 2.5%; The revenue of other regions was 01 million yuan, accounting for 0.3%.
The organizational structure is clear, and the goal of adding more than 700 stores
At present, the organizational structure of the company is clear, the group meal business department is upgraded to the key customer business department, and the business positioning is clear; Upgrade Barbie mall as an e-commerce business center and strengthen business expansion in combination with the third-party platform; Upgrade the information management center to a digital R & D center, strengthen the company’s digital management ability, and build a new intelligent chemical plant.
Main measures of the company in 2022: 1) steadily expand production capacity, promote the construction of projects in Nanjing, Shanghai and Wuhan, improve the capacity utilization of factories in North and South China, and promote the nationwide layout of business; 2) Expand the two core businesses of chain stores and group meal customers, and target to add at least 700 stores in 2022; 3) Maintain R & D and innovation of core products and enrich the product types of the two core businesses; 4) Enhance brand influence through new media, live broadcast and other marketing means; 5) Strengthen the construction of human resources, focusing on the selection, cultivation and development of talents; 6) Promote mergers and acquisitions and expand sales scale and market share.
Profit forecast
At present, the profitability of the company’s stores continues to improve, and the superimposed group meal business continues to grow rapidly. We believe that the company is expected to reach a higher level in 2022 and its performance is expected to be further released. We expect EPS to be 1.09/1.33/1.59 yuan from 2022 to 2024, and the current share price corresponding to PE is 28 / 23 / 19 times respectively, maintaining the “recommended” investment rating.
Risk tips
Macroeconomic downside risks, consumption dragged down by the epidemic, opening stores less than expected, rising risks of raw materials, etc.
