\u3000\u3000 Xiangpiaopiao Food Co.Ltd(603711) (603711)
Core view
Event: the company recently issued a price increase announcement. In view of the continuous rise in the costs of main raw materials, labor, transportation and energy, and the continuous rise in the costs of transportation and energy, in order to better provide high-quality products and services to dealers and consumers and promote the sustainable development of the market and industry, the company has studied and decided, The price of solid brewing milk tea (including classic series and good material series) is adjusted. The price increase range of main products is 2% – 8%. The new price will be implemented according to the price adjustment notice of each product from February 1, 2022.
The epidemic has repeatedly affected sales, and price increases are expected to improve profitability. In the first three quarters of the 21st year, the company achieved a revenue of 1.974 billion yuan (YoY + 4.3%), and a revenue of 886 million yuan (yoy-1.8%) in a single quarter of 21q3. Split the categories. In the first three quarters, the revenue of brewing products was 1.412 billion yuan (YoY + 9.0%), and the revenue of ready to drink products was 5.31 (yoy-7.6%); Among them, 21q3 achieved revenue of 751 million yuan (YoY + 0.9%) and 118 million yuan (yoy-20.0%) respectively. The repeated epidemic still has a negative impact on the company’s product sales and affects the recovery of revenue. In the first three quarters of 21 years, affected by the rising cost of raw materials, the company’s gross profit margin decreased by 5.09pct to 32.23% year-on-year; The sales expense ratio decreased by 3.12pct to 25.45% year-on-year, and the company’s expense control is expected to be stricter; The effective income tax rate decreased by 9.9pct year-on-year; Overall, the net profit margin on sales decreased by 0.35pct to 2.00% year-on-year. This price increase will help the company alleviate cost pressure and improve its profitability for 22 years.
Continue to promote innovation to meet market demand, and jointly arrange the functional food and beverage sector. In terms of products, the company actively launched new products to expand the market. Since the second half of the year, the company has introduced new products such as new Bobo milk tea, raw coconut pineapple milk tea and Taida milk tea bucket to meet the taste needs of consumers. In terms of marketing, in August 21, the company officially announced Wang Yibo as a new brand spokesperson, which helps to expand young consumers with the help of fan economy. In terms of new categories, on October 28, the company announced that it had negotiated with Xiamen Kingdomway Group Company(002626) and Ningbo xuanyingyunhao to invest in the establishment of two joint ventures to carry out the R & D, production and sales of lean body products in the Chinese market, and jointly explore the Chinese market of health and nutritional supplements and related functional foods and functional beverages. The market space of functional food and beverage is huge. The company and Xiamen Kingdomway Group Company(002626) will cooperate to produce and sell high protein milkshake products, which are mainly used for fitness and plasticity. It is expected to form an important growth point in the future
Profit forecast and investment suggestions
According to the financial report, the revenue, gross profit margin and sales expense ratio are reduced. It is predicted that the earnings per share of the company in 2021-2023 will be 0.95 yuan, 1.08 yuan and 1.22 yuan respectively (the original prediction of 21-22 years is 0.98 yuan and 1.12 yuan). Combined with the valuation of comparable companies, the company is given 22 times PE for 22 years, corresponding to the target price of 23.76 yuan, maintaining the buy rating.
Risk tip: the dynamic sales of fruit juice tea is less than expected, the cost of raw materials increases, and the investment in sales expenses increases the risk.
