\u3000\u3 Shengda Resources Co.Ltd(000603) 517 Juewei Food Co.Ltd(603517) )
Key investment points
Event: Juewei Food Co.Ltd(603517) released the annual report of 2021 and the first quarterly report of 2022. In 2021, the revenue was 6.55 billion, a year-on-year increase of 24.1%, and the net profit attributable to the parent company was 980 million, a year-on-year increase of 39.8%. 22q1 achieved a revenue of 1.69 billion, a year-on-year increase of 12.1%, and the net profit attributable to the parent company was 89.07 million yuan, a year-on-year decrease of 62.2%.
Operation in 21 years: (1) product structure: the revenue of fresh goods products was 5.607 billion yuan, a year-on-year increase of + 15.5%, of which the revenue of Poultry / livestock / vegetables / other fresh goods products was 43.31/0.70/6.13/593 million yuan respectively, a year-on-year increase of + 13.0% / + 115.1% / + 15.7% / + 28.7%. The revenue of fresh goods business accounted for 85.62% of the company’s revenue, a decrease of 6.41 PCT compared with 20 years. The revenue of packaging products / franchisee management / other products reached 136 / 0.67 / 541 million yuan respectively, with a year-on-year increase of + 229.64% / – 1.46% / + 212.27%. (2) Store structure: the number of stores along the street / community / comprehensive / supermarket / other accounts for 49% / 20% / 13% / 8% / 10% respectively. (3) Channel structure: food wholesale / food retail / franchisee management / other channels achieved revenue of 53.19/4.24/0.67/541 million yuan respectively, with a year-on-year increase of + 15.7% / + 42.0% / – 1.5% / + 212.3%.
Repeated outbreaks have put pressure on business. 21q4 achieved an operating revenue of 1.702 billion yuan, a year-on-year increase of + 22.4%; The net profit attributable to the parent company was 17 million yuan, a year-on-year increase of – 90.7%. The epidemic has led to a reduction in offline consumer demand, especially the sharp decline in the number of passenger flow in transportation hubs, shopping centers and tourist destinations, which has led to a precipitous decline in the consumption power of the original high potential consumption areas. Jue Wei single store has not fully recovered to the pre epidemic level in 2021, 91% of that in 19 years. 22q1 company achieved a revenue of 1.688 billion yuan, a year-on-year increase of + 12.1%; In terms of products, 22q1 fresh products achieved a revenue of 1.398 billion yuan, a year-on-year increase of + 2.8%, and the growth slowed down due to the impact of the epidemic.
The dealer system comes first, and the cost investment increases, which is due to the long-term. 21q4’s gross profit margin was 26.3%, down 1.3 PCT year-on-year, and its net profit margin was 1.1%, down 11.6 PCT year-on-year. The sales rate / management rate were 11.1% / 7.2% respectively, with a month on month ratio of + 4.1pct / + 1.5pct. The gross profit margin / net profit margin of 22q1 company is 30.3% / 4.99% respectively, and the sales rate / management rate is 14.0% / 6.5% respectively, month on month + 2.9pct / – 0.7pct. The continuous increase of sales expenses is mainly due to the company’s goal of improving market share and ensuring the quality of life of franchisees during the epidemic period. On the one hand, it has increased investment in brands, on the other hand, it has also given subsidies to franchisees. In 22 years, the company will implement the plan of starting a prairie fire, and the number of stores is expected to increase significantly. At the same time, the store opening competition is also expected to help improve the income of single stores. The company will increase its support to dealers in the short term. Although it will cause some pressure on the profit side, it is a beneficial measure in the long term. We believe that with the effective control of the epidemic, after the company’s single store income rebounds, the company’s expense side may be greatly improved, and the profit rebound is expected.
Investment suggestion: in the short term, the performance will still be suppressed by the epidemic. Excluding the short-term disturbance of the epidemic, the opening of the company is progressing smoothly, the franchisee system is stable, and the income of a single store is expected to rise after the epidemic. Considering that the company’s short-term single store income will still be affected by the epidemic, the expense side will pay more subsidies to franchisees. It is estimated that the company’s total operating revenue from 2022 to 2024 will be RMB 7.547/9.751099 billion, with a year-on-year increase of 15.2% / 20.2% / 21.0%, and the net profit attributable to the parent company from 2022 to 2024 will be RMB 1.080/12.351407 billion, with a year-on-year increase of 10.1% / 14.4% / 13.9%, corresponding to PE of 25X / 22x / 19x from 2022 to 2024, maintaining the “buy” rating.
Prompt: less than the expected cost of opening stores, less than the expected risk of opening stores, etc
