Events:
On August 26, the company announced its mid-term results for 2021, with revenue of 45.905 billion yuan during the reporting period, + 22.3% over the same period last year, and net profit of 2.947 billion yuan, + 143.2% compared with the same period last year. Revenue growth exceeded expectations.
Comments:
The income end increases the momentum bright eye, the white milk scene demeanor is high. According to the category, 21H1 liquid milk / ice cream / milk powder / other products are + 21.1%, 34.8%, 11.6%, 98.2% respectively compared with the same period last year. White milk has a high demeanor, pure milk grows by more than 20%, Trensu grows by nearly 40%, fresh milk grows by more than 120%, and the growth of yogurt is good; yoghurt still maintains high growth under the pressure of the industry as a whole. In the milk powder business, the growth rate of adult powder is more than 90%, with a strong growth trend. Due to the merger of Ai Xue, the ice cream business increased its revenue by 380 million yuan, and its own business increased by 16%. The cheese business grew by more than 68%, leading to a surge in other products.
The profit margin increases under the cost pressure, which reflects the strong control ability. 1H21 gross profit margin is 38.2%, year-on-year decline 0.8pct, sales / management / financial rate year-on-year-2.6/-0.3/+0.3pct, under the pressure of raw milk (the average price of fresh milk in 1H21 main producing areas increased 15% year-on-year) gross sales margin increased compared with the same period last year, mainly due to the increase in the proportion of high-margin products and reduced costs, reflecting the company's strong profit control ability. The net interest rate of 1H21 is 6.4%, an increase of 3.2pct compared with the same period last year, and an increase of 1.2pct compared with the same period last year, mainly due to a reduction in other expenses of the company (1H20 epidemic prevention expenses, donations, etc.) and an increase in modern animal husbandry profits of associated enterprises, as well as a decline in comprehensive tax rates.
Core profit margins are expected to increase slightly throughout the year. The company has raised the price of basic white milk again in the middle of the year and is expected to better hedge against cost pressures in the second half of the year. In addition, the logic of slower competition between the two powers this year is gradually realized. Throughout the year, it is expected that the company's expenses will be biased, and the core profit margin should be higher than that of 19 years.
Investment suggestion
Since the beginning of this year, the revenue side of the company has increased well. Considering the company's excellent cost control ability, we have still achieved higher profit margins under the pressure of raw milk. We have raised our profit forecast to increase the 21-22 year net profit by 8%. It is estimated that the 21-23 year net profit of the company will be 51.32 inch, 6344, 7739 million yuan, respectively, and the corresponding EPS will be 1.30, 1.61 and 1.96 yuan, respectively. The corresponding PE is 35X/28X/23X, maintaining the "buy" rating.
Risk hint
Higher-than-expected cost input / increased competition in the industry / higher-than-expected increase in raw milk prices / food safety risk.