\u3000\u3 Shengda Resources Co.Ltd(000603) 076 Ningbo Lehui International Engineering Equipment Co.Ltd(603076) )
Events
On April 28, the company released the annual report of 2021 and the report of the first quarter of 2022.
Revenue in the first quarter increased by 41% year-on-year; Refined brewing business investment, freight and raw material prices affect the profit side
Revenue side: in 2021, the company achieved a revenue of 990 million yuan, a year-on-year increase of 16%; In 2022q1, the company achieved a revenue of 310 million yuan, a year-on-year increase of 41%. Benefiting from increased overseas demand and accelerated project acceptance, the company’s equipment business maintained high growth.
Profit side: in 2021, the company realized a net profit attributable to the parent company of 46.25 million yuan, a year-on-year decrease of 56%; In 2022, Q1 company realized a net profit attributable to its parent company of 18.72 million yuan, a year-on-year decrease of 50%. The main reasons are as follows: 1) the company’s arbitration case in Germany affected the one-time net profit of 31.14 million yuan in 2021; 2) The second main business, fine brewing, is in the expansion stage, affecting the annual net profit of 18.82 million yuan in 2021; The establishment of brand promotion channels has a great impact on the profits of Q1 and Q2 wineries in 2022.
The newly signed orders of the equipment sector increased by 92% year-on-year in 2021; Orders on hand reached 2.13 billion yuan, another record high
The increase in the price of overseas main business and the increase in the price of raw materials by 23.5t in 2027 were mainly affected by the year-on-year increase in the price of overseas main business and the decrease in the price of raw materials by 23.5t in 2027. In 2021, the company signed 1.75 billion yuan of new orders for equipment business, a year-on-year increase of 92%; At the end of the period, the orders on hand reached 2.13 billion yuan, a year-on-year increase of 39%. Benefiting from the continuous growth of the demand for industrial beer, fine brewed beer and Baijiu equipment outside China, the company’s on hand orders reached a new record. With the improvement of the company’s scale effect, the gradual confirmation of new orders and the decline of freight and raw material prices, we believe that the company’s profitability is expected to hit the bottom and rebound.
The expansion of independent brand operation accelerated, and the company’s own brand “fresh beer 30km” achieved a major breakthrough
We believe that the company’s channel progress, production capacity investment and remote expansion have accelerated, and the fresh beer business has achieved a great breakthrough. We are optimistic about the progress of channels and the expected substantial increase in fresh beer sales after the epidemic is alleviated!
B-end catering / large supermarket chain: the company’s own brand has entered the catering chain system of Fengmao kebab and buerjun Sichuan cuisine, and is expected to make a breakthrough in the follow-up. The company’s exclusive products in cooperation with HEMA have become the top 1 in the new wine list of HEMA system.
Business form of C-end tavern / liquor station: it has successfully entered the mode replication stage in the early stage, and the process of opening stores in different places has been started. The recent epidemic situation in Shanghai and other places has repeatedly affected the landing rhythm of the company’s C-end channel. It is expected that after the epidemic situation is alleviated, the early-stage reserve projects will enter the accelerated introduction period. Direct selling / dealer network: the 30 km direct selling / distribution network of fresh beer is accelerating. After the epidemic is alleviated, the sales of fresh beer is expected to exceed expectations. Online channel: fresh beer 30km products have been officially sold in wechat mall, jd.com, Taobao and tmall flagship stores. Tiktok live broadcast has been launched, and it is expected to increase online publicity and promotion in various forms in the future.
Profit forecast and valuation
The company’s profitability declined in 2021 due to raw material prices, rising shipping, contract disputes, refined brewing business development and other reasons. It is expected that the profitability will be significantly improved in 2022. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 140 / 2.2 / 390 million yuan respectively, with a growth rate of 201% / 57% / 77%, corresponding to 21 / 13 / 8 times of PE, maintaining the “buy” rating.
Risk warning: the epidemic situation affects the demand; The sales of fresh beer and fine brewed beer projects of independent brands were less than expected
