\u3000\u3 Ping An Bank Co.Ltd(000001) 215 Zhengzhou Qianweiyangchu Food Co.Ltd(001215) )
Event: the company released the annual report of 2021. In 2021, the company achieved a revenue of 1.274 billion yuan (+ 34.9%), a net profit attributable to the parent company of 88 million yuan (+ 15.5%), and a net profit not attributable to the parent company of 86 million yuan (+ 47.1%). In 2021q4, the operating revenue was 386 million yuan (+ 14.9%), and the net profit attributable to the parent company was 32 million yuan (+ 14.6%). In 2022q1, the operating revenue was 348 million yuan (+ 20.2%), and the net profit attributable to the parent company was 29 million yuan (+ 44.8%).
Under the background of the epidemic situation in the beginning of 22 years, the operation was super stable and the performance of revenue and profit exceeded expectations. In 2021, the company achieved a revenue of 1.274 billion yuan (+ 34.9%), an operating revenue of 348 million yuan (+ 20.2%) in 2022q1, and a net profit attributable to the parent company of 29 million yuan (+ 44.8%). From the perspective of splitting channels, the growth rate of big B was slightly affected by the epidemic, but there was still double-digit growth, while small B was less affected and made steady progress in reaching the annual growth target.
Fried dough sticks dealers channel volume, large single product steamed fried dumplings fast volume. In 2021, the revenue from frying was 660 million (+ 26.66%), that from baking was 223 million (+ 19.10%), that from cooking was 256 million (+ 39.20%), and that from dishes and others was 130 million (+ 162.11%, driven by the large volume of steamed and fried dumplings). Among the top three product lines, the number of fried dough sticks was 351 million (+ 34.65%), mainly due to the increment brought by the large volume of dealer channels. In addition to the 11% growth of single core key customers, the overall growth rate of fried dough sticks in other customers was 43.88%. The large-scale growth of steamed and fried dumplings is mainly due to the company’s increased R & D and promotion efforts in 2021, and hopes to reach more than 200 million in 2022. Steamed and fried dumplings increased rapidly by 135 million (+ 167.87%), pastries by 121 million + 29.98%, and cartoon bags helped increase sales. In addition, in 2021, the company began to lay out prefabricated dishes, realizing a revenue of more than 14 million, a year-on-year increase of 34.35%.
Big B and small B have made concerted efforts, and the direct distribution channels have increased simultaneously. In 2021, the revenue from direct channels was 511 million (+ 51.62%), and the revenue from distribution channels was 759 million (+ 25.35%). In 2021, the number of major customers of the company was 168 (+ 93%), mainly due to the consistent classification and return of major customers from the dealer caliber to the company after listing. There were also a few newly developed customers, and more existing customers increased the monomer scale one by one. Catering enterprises based on their growth and future development potential were also included in the major customer management system. From the perspective of the top five direct customers, yum China + 11.15%, exceeding the previous growth level. The second tier customers are growing rapidly, and the third tier is included in potential customers. In terms of distribution channels, at the end of 2021, the company had 968 distributors (+ 6.73%), and 213 sales and marketing personnel (+ 21.7%). The company gives support to key dealers. Key dealers grow rapidly, accounting for 206 million (+ 50.14%) of the top 20 dealers. In 2022q1, although the epidemic had a certain impact on downstream demand, the growth rate of small B was still bright, and the revenue of large B increased by about 10% in the first quarter (more than 30% excluding Yum).
Various ways to deal with the cost pressure, and the profitability is relatively stable. In 2021, the gross profit margin of the company was 22.4 (+ 0.6pct) and the net profit margin was 6.9% (- 1.2pct). In 2021q4, the company’s gross profit margin is 23.6% (+ 1.1pct), net profit margin is 8.3% (+ 0.0pct), sales expense rate is 3.1% (+ 0.0pct), and management expense rate is 8.4% (+ 1.5pct), which is related to the one-time recognition of annual equity incentive expenses in the fourth quarter. In 2022q1, the profitability of the company is stable. The net profit rate of the company is 8.2% (+ 1.4pct), deducting the non net profit rate of 6.8% (+ 0.2%), the gross profit rate is 22.6% (+ 0.4pct), the sales expense rate is 3.2% (+ 0.1pct), and the management expense rate is 8.7% (+ 0.3pct). Under the upward pressure of oil, soybean protein and other costs, the company still maintains the stability of profitability, mainly because the company stabilizes the cost pressure through the order locking mode of key customers, structural improvement and price increase of some products.
We will continue to promote production capacity and increase the layout of prefabricated dishes. In 2021, the company’s actual production capacity totaled 99500 tons, involving a capacity utilization rate of 70.05%, with a year-on-year increase of nearly 10 PCT; By the end of 2021, the capacity under construction was 22400 tons, the progress of Wuhu factory reconstruction project has reached 55.81%, and the progress of Xinxiang food processing project under construction has reached 100%. In 2022, the company will strengthen the R & D, production and sales of prefabricated dishes, establish a professional prefabricated dish company, and carry out customized development around the b-end catering business market. We believe that the company has the first mover advantage in the big b-end, and the prefabricated dishes are expected to successfully enter the big b-end that the company has cooperated with and bring increment.
Profit forecast and Valuation: we expect the growth rate of revenue from 2022 to 2024 to be 26.7%, 24.5% and 23.3%, and the growth rate of apparent parent net profit to be 28.3%, 23.4% and 22.9%. After deducting the impact of equity incentive expenses, the growth rate of net profit attributable to the parent company of the same caliber was 16.5%, 21.8% and 33.2% respectively. The target price was 58.75 yuan, corresponding to 36x in 2023, maintaining the buy rating.
Risk tip: raw material price fluctuation risk and intensified industry competition risk.
