\u3000\u3 China Vanke Co.Ltd(000002) 946 New Hope Dairy Co.Ltd(002946) )
Event:
The company released the annual report of 2021 and the first quarterly report of 2022. In 2021, the company achieved a revenue of 8.967 billion yuan, a year-on-year increase of + 32.87%, deducting the net profit not attributable to the parent company of 2.566 billion yuan, a year-on-year increase of + 19.75%. In 2022, Q1 achieved a revenue of 2.317 billion yuan, a year-on-year increase of + 15.02%, deducting a net profit of 348 million yuan, a year-on-year increase of + 66.97%.
Comments:
The endogenous power is strong, and the M & A integration ability is verified again
The company’s revenue momentum in 2021 was strong, and Q1 in 2022 still made a smooth start in the face of the disturbance of the epidemic. By category, in 2021, liquid milk / milk powder / others achieved revenue of 8.3/0.72/593 billion yuan respectively, a year-on-year increase of + 32% / + 5% / + 46%; Among them, fresh milk / high-end fresh milk accounted for + 35% / + 50% year-on-year, and the company’s new products contributed about 10% of its overall revenue. The revenue / profit of Xiajin dairy industry consolidated in 2021 was + 18% / + 20% year-on-year, and the company’s M & A integration ability was verified again. On the channel side, the company’s e-commerce channel revenue increased by 80% year-on-year in 2021; The offline channel company continues to promote the national layout. In terms of sub regions, the dealers in Southwest / East / North / Northwest / Central China are – 1% / – 3% / + 15% / + 15% / + 31% respectively. The company continues to densify the channels in low permeability areas.
The cost was properly controlled and the expense rate fell steadily
The gross profit margin of the company in 2021 was 24.56%, with a year-on-year increase of + 0.07 percentage points. Under the background of high fluctuation in the price of raw milk in the upstream, the company stabilized the gross profit margin level through measures such as upgrading the product structure and launching new products with high gross profit margin. On the expense side, the sales / management expense ratio in 2021 was + 0.26 / + 0.02 percentage points year-on-year, and the sales / management expense ratio in Q1 was -0.64 / – 0.96 percentage points year-on-year in 2022. The expense ratio level fell steadily.
Fresh cube strategy as the core, the goal to enter the leading ranks of the global dairy industry
In the short term, the company takes the fresh cube strategy as the core, improves the proportion of fresh milk products and continues to improve the product structure. In the long run, the company is expected to continue to march into the leading ranks of the global dairy industry through M & A integration.
Profit forecast
Based on the changes of the company’s product structure at low temperature and normal temperature, the growth rate of various categories and cost expectations, the forecast is slightly reduced. It is estimated that the company will achieve a revenue of RMB 10.737127.31/14.865 billion from 2022 to 2024 (the previous forecast was RMB 10.715/13.262 billion from 2022 to 2023), with a year-on-year increase of 19.74% / 18.57% / 16.76%; The net profit attributable to the parent company was RMB 4.026/55.25/7.193 billion (the previous forecast was RMB 4.486/6.361 billion from 2022 to 2023), with a year-on-year increase of 28.92% / 37.24% / 30.21%; The corresponding EPS is 0.46/0.64/0.83 yuan; The PE corresponding to the current share price is 24 / 18 / 14 times. At present, the average PE of SW dairy industry in 2022 is 23 times, but the company has strong growth. The net profit CAGR in the next three years is 32%. Based on the valuation of PEG 1, we give the company a PE valuation of 32 times in 2022, with a target price of 14.72 yuan, maintaining the “buy” rating.
Risk tips
The price of raw milk and packaging materials rises, the improvement of product structure is less than expected, and the terminal price war intensifies.
