\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. In 2022q1, the operating revenue was 7.21 billion yuan, a year-on-year increase of + 0.7%, the net profit attributable to the parent company was 1.83 billion yuan, a year-on-year increase of – 6.4%, and the net profit attributable to the parent company after deduction was 1.79 billion yuan, a year-on-year increase of – 5.5%. The performance was in line with expectations.
Stable income and strong business resilience. On the whole, in the external environment of high base and repeated outbreaks, 2022q1 company still achieved steady growth on the revenue side, showing strong business resilience. 1) By category: in 2022q1, the income of soy sauce / sauce / oyster sauce / other categories was – 0.5% / – 8.6% / – 3.2% / + 9.7% year-on-year, and potential varieties such as vinegar and cooking wine contributed to higher income increment; 2) In terms of subregions, the Eastern / Southern / central / northern / western regions have a year-on-year increase of + 5.6% / + 6.0% / – 9.3% / + 0.4% / – 7.3%. The relatively weak regions in the central / northern / western regions have a high income base and a slowdown in Q1 growth after accelerated sinking of early channels and blank market coverage; 3) Number of dealers: at the end of 2022q1, there were 7139 dealers, a decrease of 291 compared with the end of 2021. The revenue volume of a single dealer was + 1.7% year-on-year. The channel quality continued to be optimized. It is expected to increase the share of competitors in the stock competition of the industry.
The cost pressure reflects that the profit stability is stronger than that of the industry. 2022q1 gross profit margin is 38.2%, year-on-year -2.8pct, sales / management / R & D / financial expense rate is 5.4% / 1.4% 2.6% / – 1.5%, year-on-year -0.3 / + 0.2 / – 0.4 / + 0.1pct, net profit margin is 25.4%, year-on-year -1.9pct; Cost pressure is the main reason for the decline in profits. We estimate that the cost of 2022q1 tons has a double-digit increase over the same period, which is difficult to cover in the early price increase. However, Haitian completed the transmission of the early price increase earlier and has stronger cost control power, showing stronger profit stability than the industry as a whole.
It is expected to be stable in the short term, waiting for the industry to pick up and the cost to fall. 1) Revenue Outlook: at present, the company’s catering channel inventory is higher than the normal level. In the follow-up, we need to actively pay attention to the development of the epidemic. We look forward to the improvement of the revenue end in 2022q2; 2) Profit outlook: the year-on-year change of the company’s expense rate is relatively rigid. The core of subsequent profit elasticity is the trend of raw material cost. We expect the raw material cost to fall from 2022h2 and gradually contribute to profit elasticity.
Investment advice. We maintain the previous profit forecast. It is estimated that the operating revenue from 2022 to 2024 will be RMB 28.30/323.4/37.74 billion, with a year-on-year increase of + 13.2% / + 14.3% / + 16.7%, and the net profit attributable to the parent company will be RMB 75.5/89.6/10.75 billion, with a year-on-year increase of + 13.1% / + 18.8% / + 19.9%. The current stock price corresponds to pe51 / 43 / 36 times, maintaining the “buy” rating.
Risk tip: the recovery of industry demand is less than expected, the industry competition is intensified, and the cost is higher than expected.
