\u3000\u3 Shengda Resources Co.Ltd(000603) 027 Qianhe Condiment And Food Co.Ltd(603027) )
Key investment points
Event: the company released the annual report of 2021 and the first quarterly report of 2022. In 2021, the operating revenue was 1.925 billion yuan, a year-on-year increase of 13.70%; The net profit attributable to the parent company was 221 million yuan, a year-on-year increase of 7.58%; The net profit attributable to the parent company was RMB 1.88 billion, a year-on-year increase of 2.68%. In the single quarter of 21q4, the company achieved an operating revenue of 570 million yuan, a year-on-year increase of 20.95%; The net profit attributable to the parent company was 89 million yuan, turning losses into profits year-on-year; Deduct 86 million yuan of net profit not attributable to the parent company, turning losses into profits year-on-year. 22q1 single quarter, the company achieved an operating revenue of 482 million yuan, a year-on-year increase of 0.93%; The net profit attributable to the parent company was 55 million yuan, a year-on-year increase of 38.47%; Net profit deducted from non parent company was 54 million yuan, with a year-on-year increase of 27.12%. 22q1 revenue and profit are lower than expected.
The business ended smoothly in 2021. Affected by the dislocation of the Spring Festival in 22q1, the actual performance of the revenue side was stable. In 2021, the revenue growth rate was 13.7%. Although it slowed down, it is not easy under the pressure of the industry. 22q1's revenue was basically flat year-on-year, mainly due to the change in the rhythm of goods preparation after the Spring Festival, and the performance was more reflected in 21q4. 21q4 revenue increased by 21.0% and handed over satisfactory answers; Combined with 22q1, 21q4 + 22q1 increased by 10.9% year-on-year, with double-digit growth. The overall performance of the company's revenue side is relatively stable. In terms of products, the revenue of soy sauce / vinegar in 2021 was + 12.2% / + 10.0% respectively, of which the volume increase was + 30.2% / + 13.5%, which showed a beautiful performance, and the price increase was - 13.8% / - 3.1%, which was related to the change of product structure (the proportion of middle and low end increased); The income of 21q4 + 22q1 soy sauce / vinegar was + 8.3% / + 17.7% respectively, all developing healthily. In terms of regions, in 2021, the revenue of the Eastern / Southern / central / northern / western regions was + 17.3% / + 51.7% / + 29.4% / + 10.4% / + 7.3% respectively, while that of the 21q4 + 22q1 Eastern / Southern / central / northern / western regions was + 1.9% / + 54.6% / + 27.6% / + 14.2% / + 8.5% respectively. The southern region with small business volume showed a relatively high growth rate, the growth rate of the western region of the base camp was stable, and the nationwide expansion was carried out in an orderly manner.
Cost pressure and product structure degradation put pressure on the gross profit margin, and the contraction of fee investment contributed to the net profit. At the gross profit end, the gross profit margin in 2021 was 40.4%, with a year-on-year rate of - 3.5pct, and the gross profit margin in 22q1 was 35.0%, with a year-on-year rate of - 8.4pct. We judged that it was mainly due to the rise in costs and changes in product structure. Since the rise in raw material prices almost ran through 2021 and even 22q1, the year-on-year pressure on the gross profit margin in 22q1 was more significant than that in 2021. On the expense side, in 2021, the sales / management / R & D / financial expense rates were 20.2% / 3.4% / 2.9% / - 0.1% respectively, with a year-on-year increase of + 3.2 / - 0.3 / + 0.2 / + 0.05pct. The increase in the sales expense rate was mainly due to the increased investment in advertising and publicity expenses; 22q1 sales / management / R & D / financial expense ratio was 15.1% / 3.3% / 2.6% / - 0.2% respectively, with a year-on-year increase of - 10.6 / + 0.03 / - 0.4 / - 0.2pct. The sales expense ratio contracted significantly and released profits; According to the company's financial budget for 2022 (announced on April 30), the annual sales / management / R & D / financial expense ratio in 2022 is 15.2% / 3.7% / 2.7% / - 0.3% respectively, and the sales expense ratio is expected to shrink by - 4.9pct year-on-year. On the profit side, the net profit margin in 2021 was 11.5%, with a year-on-year decrease of -0.7pct, which was smaller than the gross profit margin, mainly due to the provision for impairment of goodwill and intangible assets formed by the acquisition of Jinshan Temple in 2020; 22q1 net profit margin was 11.5%, year-on-year + 3.1pct, mainly due to the contraction of fee investment to offset the adverse impact of gross profit margin and create profit space.
In 2022, both revenue and profit are expected to grow healthily, and there is still room for improvement. In 2021, the general environment was unfavorable, and the cost, epidemic situation, channels and other factors resonated. The company mainly sold Ka channels, positioned at the medium and high end, and the business pressure increased significantly. On this basis, the company entered the circulation channels of foreign markets and actively arranged group buying. On the basis of group buying and channel increment, combined with the recovery of business supermarkets, tapping the potential of catering and the high growth of e-commerce, the company's operation has great room for improvement. According to the financial budget, the company's revenue target in 2022 is + 18.5%, which we believe is expected to be achieved (equity incentive target + 18%). On the profit side, due to the long brewing period of the company's soy sauce products (no less than 180 days), the cost will lag the reaction, and the high raw material prices of 21h2 and 22q1 basically lay the foundation for the pressure on the gross profit margin of the annual report in 2022, and the profit side will realize the growth supported by the cost contraction. Referring to the budget, there will be great pressure on the gross profit margin in 2022. We believe that the improvement of epidemic prevention and control situation and the decline of raw material costs are the general trend. The gross profit margin of the company will eventually be repaired, and the realization of profit elasticity will be late, but will not be absent. The potential improvement space of gross profit margin in 2022 may be realized successively after 2023, releasing sufficient profit elasticity.
The long-term potential is still sufficient to maintain the "overweight" rating. We are optimistic about the flexibility of the company's short and medium-term performance and the long-term deep cultivation of zero to add multi-channel growth space. Referring to the financial report and financial budget to adjust the profit forecast, the company is expected to achieve an operating revenue of 2.31/28.2/3.35 billion yuan from 2022 to 2024, with a year-on-year increase of 19.9% / 22.0% / 19.0% respectively; The net profit attributable to the parent company was 280 / 380 / 510 million yuan, with a year-on-year increase of 28.0% / 35.2% / 33.7% respectively; EPS is 0.35/0.48/0.64 yuan respectively, and the corresponding PE is 49.8/36.8/27.5x respectively, maintaining the "overweight" rating.
Risk tip: the construction of new channels is less than expected, the cost rise is higher than expected, and the epidemic situation repeatedly affects the demand
