\u3000\u3000 Petpal Pet Nutrition Technology Co.Ltd(300673) (300673)
Event: the company announced the performance forecast for 2021. It is estimated that the net profit attributable to the parent company is 60 million yuan – 90 million yuan, a decrease of 47.75% - 21.62% over the same period of last year.
Vietnam factory shut down due to the epidemic, and the company's performance in the second half of the year was under pressure
In the first half of 2021, the company's revenue performance maintained continuous growth, with Q1 revenue / profit increasing by 33% / 99% and Q2 revenue / profit increasing by 15% / 32%. Since August, the Vietnamese factory of the company has temporarily stopped production in early August according to the requirements of local epidemic control, and resumed production in late October, affecting for up to a quarter. Affected by this, the company's Q3 revenue / profit decreased significantly, with a year-on-year decrease of - 48% / - 65%. In addition, in 2021, the company faced the impact of external factors such as the shortage of international freight, the failure of timely delivery of some products and the exchange loss caused by the appreciation of RMB against the US dollar, which put pressure on the annual performance.
The production of new overseas projects is on track, and the release of new production capacity lays a foundation for growth in 2022
Significant progress has been made in the company's new project of 40000 tons of high-quality pet dry food in New Zealand and 9200 tons of pet snack food in Cambodia. The new project of pet snack food in Cambodia was put into trial production in Q3 in 21, and the profit and loss balance has been basically realized in December; The new high-quality pet dry food project in New Zealand is expected to be put into operation in early 2022. We believe that the company's new capacity is expected to accelerate the release in 2022, and the company's revenue and gross profit margin are expected to continue to improve, laying a solid foundation for the growth of the whole year in 2022. In the long run, the company has achieved deep binding with many overseas customers by virtue of its strong product strength and unique ODM mode. With the increase of sales volume of downstream major customers and the development of new products and customers, the company's overseas performance is expected to achieve sustained growth, and is expected to maintain an increase of more than 20% in the long run.
Brand aggregation + new products emerge one after another, focusing on the growth of the Chinese market
In the Chinese market, in 2021, the company focused on the creation of "haoshijia" and other brands, launched a series of products such as Shuangpin grain and canned staple food, and further increased channel promotion and brand investment. During the "double 11" period in 2021, the total sales of the company's stores exceeded 15 million, and Patty's flagship store increased by 300% year-on-year. Smartbones ranked eighth in the sales ranking of dog snack brands on November 1. The company has achieved fruitful market expansion in China. We expect that the company's revenue in China is expected to accelerate in 2022.
Profit forecast and investment suggestions
Considering the impact of overseas epidemic on work stoppage and other factors, we adjusted the company's profit forecast. It was originally estimated that the company's net profit attributable to the parent company from 2021 to 2023 was RMB 110 / 206 / 292 million, which is now adjusted to: the company's operating revenue from 2021 to 2023 was RMB 1299 / 1669 / 2062 million, with a year-on-year increase of - 3.05% / 28.47% / 23.53%, and the net profit attributable to the parent company was RMB 77 / 151 / 214 million, with a year-on-year increase of - 33.07% / 95.87% / 42.06%. Maintain the "buy" rating.
Risk warning: the risk of shutdown caused by epidemic situation; Risk of Chinese market development; Overseas business risks; Risk of fluctuation of raw materials; Risk of exchange rate fluctuation; The performance forecast is the result of preliminary calculation. Please refer to the annual report data
