\u3000\u3000 Sichuan Teway Food Group Co.Ltd(603317) (603317)
Key investment points
Event: the company achieved revenue of RMB 2.026 billion in 2021, with a year-on-year increase of - 14.34%; The net profit attributable to the parent company was 179 million yuan, a year-on-year increase of - 50.96%; The net profit attributable to the parent company after non deduction was RMB 116 million, with a year-on-year increase of - 62.43%. Among them, the revenue of 2021q4 was 628 million yuan, a year-on-year increase of - 25.22%; The net profit attributable to the parent company was 98 million yuan, a year-on-year increase of 123.21%; The net profit attributable to the parent company after non deduction was 52 million yuan, with a year-on-year increase of 302.69%.
There is still pressure on the income of 2021q4, and we look forward to the recovery of the peak season of the Spring Festival. The company's revenue in 2021q4 still shows a significant downward trend, which is lower than that in 2019q4. Considering the low price of 2021q4 pork and the good sales of sausage and bacon seasoning, it is expected to increase significantly year-on-year. The income of the two main categories of hot pot seasoning + Chinese cuisine seasoning is expected to decline by more than 30%. The income of main products is still under pressure. We believe that it is mainly due to: (1) the decline of residents' consumption power, resulting in lower sales income than expected; (2) In December, due to the influence of double control, the shortage of raw and auxiliary materials and packaging materials affected the production; (3) Dealers' willingness to store goods is reduced + the company attaches importance to product freshness management, and the channel inventory remains at a low level, far lower than that in the same period of previous years. Therefore, from the perspective of driven pin, we expect 2021q4 growth to be better than the delivery caliber at the report end. With the Spring Festival approaching in 2022, the epidemic situation has repeatedly promoted the growth of home consumption scenes. Therefore, compound seasonings are expected to benefit, and the company's sales are expected to pick up.
The profit margin of 2021q4 has recovered well, which is jointly assisted by the gross profit margin + sales expense rate. In 2021q4, the net interest rate attributable to the parent company rebounded to 15.68%, which was significantly warmer than the net interest rate close to 0 in 2021q2 and 2021q3, and returned to the level of 2020 and 2021q1. On the one hand, the promotion fee in the fourth quarter is expected to decline significantly due to the basic cleaning up of products with large dates in the early stage, thus promoting the recovery of gross profit margin to the level of 2021q1; On the other hand, the company invested less in advertising in the fourth quarter, showing a significant decrease year-on-year, while the sales expense rate of 2020q4 company was at a quarterly historical high of 28.79%. In addition, 46 million non recurring gains and losses were recognized in the fourth quarter, mainly government subsidies and financial gains.
2021 has experienced a trough, and we look forward to continuous improvement in 2022. The company's performance in 2021 was lower than that planned at the beginning of the year, mainly due to: 1) the decline of residents' consumption power; 2) Rising cost of main raw materials; 3) Changes in product structure and decline in gross profit margin; 4) The industry competition intensifies and the promotion is strengthened. Looking forward to 2022, we believe that with the normalization of the epidemic, the impact on demand will gradually weaken. At the same time, after the intensified competition in 2021, the industry is expected to gradually enter the reshuffle stage in 2022, and the withdrawal of leading basic condiments and regional brands is accelerated, which is conducive to the development of leading companies.
Profit forecast: according to the company's performance forecast, the latest revenue and profit data have been disclosed in 2021, and considering the contribution of the company to the future by raising the price of some products and reducing the cost of air advertising, we adjust the profit forecast. The company's revenue from 2021 to 2023 is expected to be RMB 2.026 billion, RMB 2.535 billion and RMB 3.066 billion respectively, The net profit attributable to the parent company was 179, 354 and 447 million yuan respectively (the original predicted value was 172, 257 and 389 million yuan), and the EPS was 0.24, 0.47 and 0.59 yuan respectively, corresponding to 92 times, 46 times and 37 times of PE, maintaining the "overweight" rating.
Risk warning events: repeated global epidemics and slowdown of global economic growth; Food safety risks; Decline in sales due to irresistible factors; The deterioration of market competition has brought unexpected promotional activities
