\u3000\u3000 Zhongyin Babi Food Co.Ltd(605338) (605338)
Events
The company released the performance forecast for 2021: the annual revenue growth rate of the company in 2021 was 38.45% - 43.58%; Net profit attributable to parent increased by 73.82% - 79.52% (indirectly holding Eastroc Beverage (Group) Co.Ltd(605499) shares, resulting in an estimated income from changes in fair value of 140-150 million); The growth rate of net profit excluding non attributable parent company was 12.42% - 20.17%. Among them, the revenue growth rate of 21q4 company is 18.02% - 33.68%; Net profit attributable to parent company increased by 9.19% - 22.99%; The growth rate of net profit deducted from non parent company was 0.90% to 23.93%.
Main contents
Looking back on 2021: the performance in the 21st year was slightly higher than expected, and the profitability was significantly improved
Number of stores: the number of stores accelerated, and the performance of East China, central China and South China was better. In the past 21 years, the company has accelerated the opening of stores, among which South China has achieved rapid development; The speed of opening stores in North China is slow; Opening stores in Central China quickly shows its potential. Single store Revenue: 21q4 single store revenue increased month on month and has rebounded to the level of 18 years. The main reasons for the increase of the company's single store Revenue: 1) store upgrading: store upgrading brings about a year-on-year increase of about 20% of the single store revenue; 2) Takeout business: the takeout business started in January 21 has made a significant contribution to the store; 3) New product launch / price increase: the superposition of price increase increases the performance of new product launch for lunch and dinner. Group meal business: the proportion of 21q4 group meal revenue increased month on month, and the annual revenue scale is expected to reach 200 million. After the group meal business was upgraded to the key customer business department, the business personnel increased from 10 + at the beginning of the year to 50 + at present, and the group meal business revenue also achieved rapid growth this year. Cost side: the downward trend of pig price is good for the performance of the cost side, and a one-time bonus or promotion fee is accrued. Benefiting from the decline of pork price, the cost end of 21q4 decreased month on month, but the one-time withdrawal of higher bonus led to the increase of expenses or affected the performance of net interest rate.
Exceeding expectations 1: new chapter of endogenous epitaxial spectrum, number of stores or exceeding expectations
The market believes that in the past 22 years, the company's stores will continue to have a net increase of less than 300 stores per year. We believe that the net increase of stores in 21 years is expected to reach a historical peak, and the expansion will be further accelerated in 22 years. 1) 21 years: the company has realized the steady expansion of franchise stores by actively attracting investment / increasing subsidies for new stores across the country. The net increase in stores in 21 years may have reached the historical peak (about 500 are expected); 2) 22 years: 22 years extension (the company will realize the national layout through accelerated acquisition, 22h1 company may merge the merger and acquisition project, and it is expected to add more than 600 stores) + endogenous (under the background that the Nanjing factory will be launched in 2022, the exhibition of stores in East China with strong brand strength will also be accelerated, and the development of South China will be accelerated through increasing public investment attraction) =It is expected that there will be a net increase of more than 1300 stores, so as to achieve more than expected development in the number of stores.
Exceeded expectations 2: the new volume of takeout business and the quality of stores exceeded expectations
The market believes that the main reasons for the positive income of single stores this year are: 1) the development of takeout business; 2) The upgrading of stores leads to the growth of single store revenue; 3) Category expansion; 4) Regular price increases for non core products. The market is still skeptical about the sustainability of the takeout business in promoting the growth of single store revenue. It is worried that the growth rate of single store revenue in 22 years will return to the track of slowdown in previous years.
We believe that: 1) takeout business: the company has recently added takeout cooperation with meituan and other channels + the proportion of takeout stores has been increasing + many new Chinese and dinner products will contribute to the increase of single store revenue in 22 years and are sustainable; 2) Store upgrading, category expansion, regular price increase and other measures will continue; 3) 21 year price increase bonus release. Based on the above, we believe that the growth rate of single store revenue in 22 years is expected to remain positive and the development trend is getting better.
Beyond expectation 3: the group meal business accelerates its development, and its performance may exceed expectations
The market believes that the group meal business will continue its steady development trend.
We believe: we believe that the group meal business of the company will achieve more than expected development in 22 years. The main reasons are as follows: 1) the accelerated landing of Nanjing factory is conducive to the expansion of the group meal business in East China, and the group meal business in North China will continue to accelerate; 2) In the 21st year, the company increased the personnel allocation of key customer department, laying the foundation for the expansion of group meal business in the 22nd year.
More than expected 4: strong cost control, and the gross profit margin may rebound at the bottom
The market believes that the profit of the company in 21 years is lower than expected due to the pressure on the cost side, and the net profit in 22 years is uncertain due to the cost side.
We believe that the cost side: the cost side of the company is expected to be better controlled in 22 years, mainly because the company has locked low-cost pork to ensure cost stability; Expense side: in order to open the 2C channel, 21q1 company put higher marketing expenses under pressure on the profit and profit side (mainly by increasing the investment in advertising and marketing such as focus ladder media and short video, with a sales cost of RMB 30 million). It is expected that the company's expenses will remain stable in the next 22 years.
Profit forecast and valuation
We believe that: 1) volume: the current expansion speed of the company's franchise stores is basically in line with expectations. In the future, the company will accelerate the speed of mergers and acquisitions to achieve a rapid increase in scale; 2) Price: the company increases the income of a single store by making efforts to create revenue increment from store takeout business, adjusting store product structure and locking fresh clothes; 3) In terms of incremental business, under the trend of finished products and specialization, the company's 2B business is expected to develop beyond expectations. To sum up, it is estimated that the revenue growth rate of the company from 2021 to 2023 will be 41%, 42% and 23% respectively; The growth rate of net profit attributable to the parent company was 77%, - 8% and 11% respectively; EPS is 1.3, 1.2 and 1.3 yuan / share; PE was 27, 29 and 26 times respectively. Considering the strong certainty of the company's annual performance, the current valuation is very cost-effective, and the buy rating is maintained.
Risk warning: the second outbreak of the epidemic in China; Food safety issues; Franchise management risk; Failure risk of foreign investment; Raw material price fluctuation risk.
