\u3000\u3 Shengda Resources Co.Ltd(000603) 027 Qianhe Condiment And Food Co.Ltd(603027) )
Event:
Qianhe Condiment And Food Co.Ltd(603027) released the 2021 annual report, with a revenue of 1.925 billion yuan (+ 13.70%) in 2021; The net profit attributable to the parent company was 221 million yuan (+ 7.58%); Deduct non net profit of 218 million yuan (+ 8.26%). The revenue of 2021q4 was 570 million yuan (+ 20.95%); The net profit attributable to the parent company is 90 million yuan (turning losses into profits); Deduct 86 million yuan of non parent net profit (turn loss into profit).
The company released the first quarterly report of 22 years. The company achieved revenue, net profit attributable to the parent and non attributable deduction of 482 million yuan, 55 million yuan and 54 million yuan, with a year-on-year increase of + 0.93%, + 38.47% and + 27.12% respectively. Q1 cash collection was 554 million yuan, a year-on-year increase of + 5.44%, advance collection + contract liabilities were 46 million yuan, a year-on-year increase of + 61%, and the quality of statements was good.
The company released the 22 year budget. It is estimated that the company’s 22 year revenue is 2.28 billion yuan, a year-on-year increase of + 18.5%, the net profit attributable to the parent is 240 million yuan, a year-on-year increase of + 9.34%, and the non net profit attributable to the parent is 230 million yuan, a year-on-year increase of + 6.95%.
Comments:
Revenue analysis: Q4’s revenue continued to increase rapidly, and the southern region performed well throughout the year. In 2021, the company achieved a revenue of 1.925 billion yuan, a year-on-year increase of + 13.70% (Q1: + 32.91%; Q2: – 7.24%; Q3: + 11.08%; Q4: + 20.95%). 1) Sub products: in 2021, the revenue of soy sauce was 1.182 billion yuan (+ 12.15%), and the gross profit margin was 43.93% (- 4.41 PCT); The revenue of vinegar was 322 million yuan (+ 10.02%), and the gross profit margin was 37.86% (- 3.99pct). 2) Splitting of volume and price: the sales volume of soy sauce is 263600 tons (+ 30.18%), and the corresponding ton price is 4485 yuan / ton (- 16.07%); The sales volume of vinegar is 93600 tons (+ 13.51%), and the corresponding ton price is 3434 yuan / ton (- 3.07%). 3) Sub region: 388 million yuan (+ 17.30%) in the eastern region; 121 million yuan (+ 51.68%) in the southern region; Central region: 180 million yuan (+ 29.42%); 267 million yuan (+ 10.45%) in the northern region; Western region 942 million yuan (+ 7.29%) 4) dealers: by the end of 2021, the company had 1791 dealers, with a net increase of 387..
Profit analysis: the cost goes up and the net profit goes down, which leads to the growth rate of Q4 report slightly abnormal. In 2021, the gross profit margin was 40.38% (- 3.47pct), mainly due to the rising cost of raw materials and the net profit margin was 11.50% (- 0.65pct). When the gross profit margin decreased and the sales expense rate increased, the net profit margin decreased slightly due to the large amount of asset impairment loss accrued in 20 years. During the 21-year period, the cost rate is 26.26% (+ 3.21pct), of which the sales cost rate is 20.15% (+ 3.21pct). In 2021q4, the gross profit margin is 37.88% (+ 8.55pct), the net profit margin is 15.71% (+ 19.55pct), and the period expense rate is 19.39% (+ 8.03pct), of which the sales expense rate is 12.73% (+ 7.47pct). The abnormality of Q4 statement is mainly related to the financial operation of 20q4. The company changed the accounting standards in 20q4 and transferred the freight and packaging expenses to the cost at one time.
22q1 analysis: base + epidemic affects short-term income, costs rise, expenses shrink, and gross sales difference improves. In 2022, Q1 revenue was 482 million yuan (+ 0.93%); The net profit attributable to the parent company was 55 million yuan (+ 38.47%), and the non net profit deducted was 54 million yuan (+ 27.12%), of which the gross profit margin was 34.98% (- 8.37pct), which was mainly caused by the rising cost of raw materials, the sales expense ratio was 15.06% (- 10.63pct), which was mainly due to the decline of publicity expenses, and the net profit margin was 11.46% (+ 3.11pct), which was mainly due to the rise of raw material costs and the decline of publicity expenses. 1) Sub products: soy sauce revenue 290 million yuan (- 1.32%); Vinegar revenue was 79 million yuan (+ 2.56%). 2) Sub regions: 85 million yuan (- 8.02%) in the eastern region; 27 million yuan (- 3.09%) in the southern region; Central region: 43 million yuan (+ 12.64%); The northern region is 72 million yuan (+ 15.72%); Western region 250 million yuan (+ 0.98%) 3) dealers: 189922q1 dealers, with a net increase of 108.
22 year Outlook: in the short term, the consumption will stabilize, the cost pressure is still on, and the annual goal is expected to be achieved.
(1) income side: Although the epidemic has been repeated, the company, which accounts for a high proportion of C-end consumption, is expected to benefit from the stock market of the epidemic. In addition, the impact of community group buying basically ended last year. As the epidemic subsided, we believe that the company’s sales are expected to usher in a new round of growth. (2) Cost side: the company’s main raw material soybean has risen sharply this year. Affected by the natural disasters in South America, we expect the soybean price to remain high before September. Combined with the company’s production cycle of half a year, we believe that the company has great pressure on the cost side and profit this year. (3) Target achievement: the company has set a 22-year revenue target of 2.28 billion yuan, a year-on-year increase of + 18.5%, net profit attributable to the parent of 240 million yuan, a year-on-year increase of + 9.34%, non net profit attributable to the parent of 233 million yuan, a year-on-year increase of + 6.95%, corresponding to q2-q4 revenue growth of 24.3%, net profit attributable to the parent of 2.94%, non net profit attributable to the parent of 2%. We believe that with the normalization of the epidemic, the company’s revenue target is expected to be feasible, although the cost pressure is great, However, there is little pressure to achieve the profit target.
Medium and long-term outlook: products and channels are in large quantities, and the lower limit of equity incentive is locked. Future logic of the company:
(1) product side: the company’s product positioning is medium and high-end. It adheres to zero addition products as the core. At the same time, it arranges medium-end products such as high freshness and extremely delicious according to the needs of consumers, and arranges future products such as enzyme soy sauce and flavored soy sauce in advance. With the gradual deepening of the general trend of consumption upgrading, the company is expected to benefit from it; (2) Channel side: on the one hand, with the nationwide laying of business supermarket channels, on the other hand, with the development and intensive cultivation of traditional channels, the company’s sales are expected to be large. (3) Equity incentive: the company launched equity incentive in February of the 22nd year. The unlocking conditions are one of the following two: the revenue growth rate of 22-24 years is 18%, 17% and 16%, or the net profit growth rate of deducting and non deducting expenses is 50%, 27% and 21%. It is expected to stimulate the vitality of the enterprise by encouraging and retaining talents and locking the bottom line of medium-term goals.
Profit forecast and rating: we are optimistic about the development trend of high-end soy sauce market. With the entry of Yihai Kerry Arawana Holdings Co.Ltd(300999) , Luhua and other leaders, the leaders are expected to jointly cultivate consumers, and the growth rate of high-end condiments is expected to reach a new level. At present, the industry structure is still scattered, the proportion of leading cities is expected to gradually increase in the future, and the company’s cultivation of high-end condiments for many years is expected to benefit from it. In the medium term, the company’s products and channels are expected to be large-scale, and equity incentives lock the bottom line of the company’s business growth. Regardless of the impact of equity incentive fees and the issuance of additional diluted share capital, we expect the company’s revenue to be 2.3 billion yuan, 2.7 billion yuan and 3.1 billion yuan respectively in 22-24 years, with a year-on-year increase of 19%, 17% and 16%, and the net profit attributable to the parent company to be 250 million yuan, 340 million yuan and 430 million yuan respectively, with a year-on-year increase of 12%, 38% and 25%. We give the company a one-year target price of 21 yuan according to 50x in 23 years to maintain the “buy” rating of the company.
Risk warning: industry competition intensifies; Price fluctuation of raw materials; Intensified market competition; Food safety issues;
