\u3000\u3000 Ligao Foods Co.Ltd(300973) (300973)
Event: the company issued the performance forecast for 2021. In 2021, the company is expected to achieve an operating revenue of RMB 2.78-2.85 billion, a year-on-year increase of + 53.62% – 57.49%, a net profit attributable to the parent of RMB 275-295 million, a year-on-year increase of + 18.49% – 27.10%, and a deduction of non attributable net profit of RMB 260-280 million, a year-on-year increase of + 15.13% – 23.98%. Q4 is expected to achieve revenue of 819-889 million yuan in a single quarter, with a year-on-year increase of 34.48% – 45.98%; The net profit attributable to the parent company was 77-97 million yuan, with a year-on-year increase of 5.48% – 32.88%
Large single products drive high revenue growth, and channel advantages continue to show. In terms of products, the company’s frozen baked goods grew strongly, and the release of sales of large single products such as frozen cakes became an important driving force for revenue growth. In terms of channel, the company still focuses on KA channel, and further consolidate baking and catering channels. The diversified advantages of products and customers continue to build high channel barriers, and the effect of channel intensive cultivation continues to be reflected.
Optimize product structure, improve profit level, increase internal efficiency and alleviate cost pressure. The increase in the proportion of frozen baking products has effectively improved the company’s profit level. Combined with the optimization of internal production and operation management, the company has achieved remarkable results in reducing costs and increasing efficiency, and the cost pressure caused by the rise in the price of raw materials such as grease has been alleviated. In addition, the company’s implementation of the excess performance incentive scheme and equity incentive plan has an impact on the net profit of about 35 million yuan. After excluding the impact, the net profit attributable to the parent company can reach 310-330 million yuan, an increase of 33.57% – 42.18% at the same time; The impact of non recurring profits and losses on the net profit attributable to the parent company is about 14 million yuan, mainly due to government subsidies.
The industry maintained a high boom, accelerated expansion and seized market share. The freezing and baking industry is in a high boom stage, and the company accelerates the expansion of production to seize the market share. In the middle and second half of this year, the production capacity of Zhejiang Changxing and Guangdong Sanshui base is expected to be released in turn. In addition, the company plans to invest in the construction of the headquarters base in Zengcheng District, Guangzhou. The total investment of the project is planned to be 2.051 billion yuan, which is about three times the total amount of the company’s existing fixed assets + projects under construction (685 million yuan as of 21q3). The average annual output value after the year of reaching production (including the year of reaching production) shall not be less than 3.115 billion yuan. Considering that the investment and construction period of the project is as long as 5-7 years, we expect that the actual landing output value is expected to be higher than the original target, helping the company further improve its production capacity and consolidate its leading position.
Profit forecast: the company is in a fast-growing track. As an industry leader, the channel barriers have emerged, and it is in the upward stage of expanding production capacity, so it has growth potential. It is estimated that the company’s revenue in 2021, 22 and 23 will be RMB 2.81/36.5/4.65 billion respectively, with a year-on-year increase of + 55.1% / 29.9% / 27.6% respectively; The net profit attributable to the parent company was RMB 290 / 3.5 / 500 million, respectively + 23.6% / 22.7% / 43.2% year-on-year, corresponding to pe68.5% 5 / 55.8 / 38.9x. After adding back the equity incentive expenses and excess performance incentive expenses, it is estimated that the adjusted net profit attributable to the parent company in 2021 / 22 / 23 will be RMB 310 / 42 / 550 million, a year-on-year increase of + 35.7% / 32.9% / 31.0%; The current market value corresponding to PE is 62.4 / 46.9 / 35.8 times, maintaining the “buy” rating.
Risk tip: the capacity construction is less than expected, and the promotion of new products is less than expected; Price fluctuation of raw materials; Industry competition intensifies.
