\u3000\u3000 Ligao Foods Co.Ltd(300973) (300973)
Event: Ligao Foods Co.Ltd(300973) released the annual performance forecast for 2021. It is estimated that the revenue in 2021 will be RMB 2.78-2.85 billion, with a year-on-year increase of 53.62% – 57.49%, and the net profit attributable to the parent company will be RMB 275-295 million, with a year-on-year increase of 18.49% – 27.10%. The single quarter revenue of 21q4 was RMB 820-890 million, with a year-on-year increase of 34.36% – 45.85%, and the net profit attributable to the parent company was RMB 77-97 million, with a year-on-year increase of 5.54% – 32.8%. The company’s performance basically meets market expectations.
Frozen baking drives growth, and the volume of Ka channel is obvious. 1) Aokun (frozen baking) is the main growth driver. It is estimated that the revenue accounts for 60% in 21 years, with a year-on-year increase of 70%. By channel, the channel of b-end bakery accounts for the highest proportion in the whole year, and the growth rate continues to maintain a high level. Ka channel has increased significantly in 21 years, mainly due to the obvious volume of Sam’s shop. As the largest customer, it is expected to contribute more than 60% of the revenue of Ka channel. At present, the volume of catering channel is relatively small and maintains rapid growth, but the revenue growth is expected to be lower than that of Ka channel. On the whole, in the case of relative shortage of production capacity supply, the company’s frozen baking products will give priority to Ka major customers in 2021, which will have a certain impact on the large-scale volume of cake shops and catering channels, resulting in its growth rate lower than the average growth rate of aokun. In terms of products, cassava, tarts, doughnuts, frozen cakes and durian cakes are the main high-volume items. In a single quarter, Q4 is a traditional peak season, and the company is still in short supply under strong demand. A new doughnut production line has been put into operation in 21q4 Henan plant, which has a certain supplement to the doughnut production capacity. 2) The business growth of baking raw materials and sauces is relatively stable, and the revenue contribution is estimated to be about 40%. The layout of follow-up products and teams is expected to take effect gradually.
The price increase covers the cost pressure, and the profitability of Q4 has improved after excluding the impact of incentives and other expenses. According to the median value of this performance forecast, it is estimated that the net profit attributable to the parent company in 2021 will be 10.12%, a year-on-year decrease of 2.7pct. It is estimated that the main reasons are: 1) the rising price of oil and other bulk raw materials will bring certain cost pressure, especially for the baking raw materials sector. Since the second half of the year, the company has successively raised the prices of some categories, such as sauces by 5-7% in July and Hong Kong tarts by about 5% after November. In January 22, the company announced a 3-8% increase in the prices of egg tarts (mainly grape tarts) and cream. With the gradual downward transmission of upstream cost pressure, the price increase of the company’s products corresponding to the terminal is not high, and it is expected that the price increase will not affect the terminal sales. At the same time, the company actively promotes the optimization of internal production and operation management and enhances the scale effect, so as to reduce costs and improve efficiency. 2) In 21 years, due to the implementation of the excess performance incentive scheme and equity incentive plan, the impact of new expenses on the net profit was about 35 million yuan. After excluding these factors, it is estimated that the net profit attributable to the parent company is 11.37%. The net interest rate attributable to the parent company in Q4 in a single quarter is about 10.24%, which is improved compared with Q3 (8.57%). If the expenses related to performance award and equity incentive are excluded, it is estimated that the net interest rate of Q4 will rise steadily year-on-year.
Profit forecast, valuation and rating: the company’s capacity layout will be accelerated in 2022, and the new output value of frozen baking is expected to reach 1 billion. Sam and other super customers will drive the short-term high growth, and the bakery and catering channels are expected to continue to be developed. According to the performance forecast, the net profit forecast for 21 years was raised to 284 million (compared with the previous forecast + 3.6%), and the net profit forecast for 22-23 years was maintained at 347 / 446 million, corresponding to EPS of 1.68/2.05/2.64 yuan. The corresponding P / E of the current stock price was 69 / 57 / 44 times, maintaining the “buy” rating.
Risk tips: food safety risk, raw material price fluctuation risk, and intensified market competition risk.
