\u3000\u3 Shengda Resources Co.Ltd(000603) 288 Foshan Haitian Flavouring And Food Company Ltd(603288) )
Event: Foshan Haitian Flavouring And Food Company Ltd(603288) released the first quarterly report of 2022. During the reporting period, the company achieved revenue / net profit attributable to parent company of RMB 7.210/1.829 billion, yoy + 0.72% / – 6.36%, and net profit attributable to parent company of RMB 1.791 billion, yoy-5.49%.
The condiment business is under pressure and the number of dealers is reduced.
Affected by the epidemic, the recovery of catering was less than expected, and the logistics in some regions was blocked. The overall business of the company in the first quarter of 2022 was under pressure: (1) according to the products, the revenue of soy sauce / oyster sauce / sauce / other condiments was 40.76/11.31/8.07/768 million yuan, yoy-5.03% / – 3.17% / – 8.61% / + 9.70%; (2) In terms of regions, the Eastern / Southern / central / northern / western regions achieved revenue of 1.377/12.13/14.82/18.86/825 billion yuan respectively, yoy + 5.61% / + 6.02% / – 9,27% / + 0.37% / – 7.25%; (3) From the perspective of channels, 22q1 company had a net decrease of 291 dealers. As of the end of the first quarter, there were 7139 dealers, and 31 / 78 / 77 / 27 / 78 dealers in the East / South / central / North / west respectively. 2022q1 company’s online / offline channels realized a revenue of 293 / 6.490 billion yuan, yoy + 202.23% / – 3.90%.
The rising price of raw materials put pressure on the profit of 22q1 company.
(1) the gross profit margin of 22q1 company was 38.17%, with a year-on-year / month on month change of -2.77pct / + 0.04pct, mainly due to the rise in the prices of raw soybeans and packaging materials. (2) The sales expense ratio of 22q1 company was 5.43%, with a year-on-year decrease of 0.27pct. (3) The ratio of administrative expenses / R & D expenses of 22q1 company was 1.35% / 2.56%. The ratio of administrative expenses increased by 0.20pct year-on-year, and the R & D expenses decreased by 0.36pct year-on-year. (4) Overall, the net profit margin of 22q1 company reached 25.39%, down 1.93pct from the same period last year.
Actively respond to the impact of the epidemic.
Under the influence of the epidemic, the company took a number of measures to actively respond: 1) actively carry out group purchase business; 2) Accelerate the layout of online business; 3) Enter the guarantee list. At present, although the channel inventory is on the high side, the enthusiasm of dealers has increased under the joint action of price increase and profit margin + gathering and coking of dealer resources, and the inventory is expected to be improved with the recovery of terminal demand. The company’s influence on the C-end continues to increase. In the future, with the mitigation of the epidemic and the recovery of the b-end, the company is expected to resume growth and achieve the annual goal.
Profit forecast, valuation and rating: we maintain the company’s net profit attributable to the parent company from 2022 to 2024 to be RMB 7.477/87.21/10.071 billion respectively, equivalent to EPS of RMB 1.61/1.88/2.17 respectively from 2022 to 2024, and the corresponding PE of the current stock price is 51x / 43x / 38x respectively, maintaining the “buy” rating.
Risk tip: raw material price fluctuations, food safety problems, category expansion is less than expected.
