\u3000\u3000 Ligao Foods Co.Ltd(300973) (300973)
Event: on January 20, the company released the performance forecast for 2021. In 2021, it is expected to achieve a revenue of RMB 2.780 ~ 2.850 billion, a year-on-year increase of + 53.62% ~ + 57.49%; Q4 achieved revenue of 819 ~ 889 million yuan, a year-on-year increase of + 34.36% ~ + 45.85%. The net profit attributable to the parent company is expected to be 275 ~ 295 million yuan, with a year-on-year increase of + 18.49% ~ + 27.10%; Q4 realized a net profit attributable to the parent company of 77 ~ 97 million yuan, a year-on-year increase of + 5.53% ~ + 32.79%.
The main business income is growing rapidly, and the baking business is booming in supply and demand. The company achieved rapid growth in revenue in 2021 and 21q4, mainly due to the booming supply and demand of the main baking industry. In 2021, the baking industry has a strong market demand. With the advantages of product diversification, excellent quality and stable supply, the company has made good achievements in baking, supermarkets, catering and other channels. Specifically, the company has a large number of large single products such as cassava and frozen cake, which contribute greatly to the revenue.
The profit growth of the main business matches the income growth, and the excess performance incentive expenditure and amortization of equity incentive expenses are the main reasons for reducing the profit growth. In 2021, the company implemented the excess performance incentive scheme and equity incentive plan, which increased the excess performance incentive expenditure and share based payment amortization expenses compared with 2020. The total amount of the above expenses was about 35 million yuan. After excluding the impact of incentive expenditure and amortization expenses, the company realized a net profit attributable to the parent company of RMB 310 ~ 330 million in 2021, with a year-on-year increase of + 33.57% ~ + 42.18%. The profit growth of the company’s main business basically matches the income growth, which shows that the company’s main business is highly competitive, the income growth is not at the expense of profits, and the development is relatively benign. It is estimated that about 80 million share based payment expenses will be amortized in 2022, which is the highest amortization scale in this equity incentive cycle. On the cost side, in 2021, the company faced the pressure of rising prices of oil and other bulk raw materials. The company mainly reduced costs and increased efficiency by optimizing internal production and operation management and product structure, so as to alleviate the upward pressure on raw material costs. In terms of non recurring profit and loss, it is expected that the net profit attributable to the parent company affected by non recurring profit and loss in 2021 will be 14 million yuan, a year-on-year increase of + 123.64%, mainly due to government subsidies included in the current profit and loss.
Abundant reserves of new products and continuous optimization of product structure. In 2021, the company has more than 660 kinds of product specifications and further optimizes the product structure. The company upgraded the taste and specifications of the original products, and the single products with high value and high quality such as hardcover Portuguese tarts have been fully increased; The company strengthens mature products such as frozen cake and cassava from taste and specification; The company increased investment in new products, such as mousse cake, plum dried vegetable meat cake, milk cream, lactic acid bacteria cream sandwich sauce, etc. At present, the company has formed a product reserve of more than 100 specifications.
Investment suggestion: according to the performance forecast, we slightly adjust the profit forecast. It is estimated that the company will achieve a revenue of RMB 2.815/35.53/4.460 billion and a net profit attributable to the parent company of RMB 285/3.23/399 million in 21-23 years, equivalent to EPS of RMB 1.68/1.91/2.36 respectively. The current stock price corresponds to 69 / 61 / 49 times of PE in 21-23 years. The company is a leading enterprise in the baking industry, with good product structure and rich reserves of new products. It is expected that the growth rate of the company’s main business profit in 22-23 years will be about 25% (excluding the amortization of incentive expenses), which is about twice the average profit growth rate of comparable baking companies in the same period (wind unanimously expected). The medium and long-term growth is good, so the valuation center is relatively high. To sum up, maintain the “recommended” rating.
Risk tip: the income expansion speed is lower than expected, the cost rise is higher than expected, food safety problems, etc
