2021Q3 performance is under pressure to maintain its "buy" rating

The revenue of Ximai Food 2021Q3 reached 270 million yuan, down 3.0% from the same period last year, while the net profit from its mother was 28 million yuan, down 13.3% from the same period last year. Due to the weak demand of the industry, we downgrade the profit forecast for 2021-2023. It is estimated that the return net profit of 2021-2023 will be 1.52,1.80,219 (- 0.2) million yuan, and the EPS will be 0.68 (- 0.01,0.81) and 0.98 (- 0.09) yuan respectively. The current stock price corresponds to 25.8,21.8,18.0 times of PE.

The company has a solid offline advantage and maintains a "buy" rating.

The steady growth of composite oatmeal, pure oatmeal, cold oatmeal decline company 2021Q3 revenue slowdown is mainly due to a high base and industry demand is still weak. From the point of view of the specific products:

2021Q3 pure oatmeal declined compared with the same period last year; the mobile sales of new products are good, and composite oatmeal is growing steadily; and the demand of cold oatmeal industry is weak, which is much lower than that of the same period last year. From the channel point of view, the e-commerce platform has a good performance and a rapid growth rate.

Looking to the future, the new composite oatmeal products perform well, and the staff are highly motivated. With the further improvement of the channel layout, the company's revenue is expected to continue to grow in 2021.

The decline in net profit margin is mainly due to the decline in gross profit margin and the increase in the rate of management expenses. The net profit rate of the company 2021Q3 fell by 1.2pct to 10.4% compared with the same period last year, while the net profit margin decreased mainly because the gross profit margin decreased to 46.8% and the rate of management expenses increased 1.5pct to 6.8%. Excluding the impact of accounting standards, gross profit margin decreased slightly compared with the same period last year, mainly due to rising costs and more discounts. From the point of view of the products: (1) the gross profit margin of pure oats increased; (2) the gross profit margin of composite oatmeal decreased slightly; and (3) the gross profit margin of cold oatmeal decreased greatly due to more discounts.

Excluding the impact of accounting standards, the rate of sales expenses decreased slightly compared with the same period last year. The rate of 2021Q3 management expenses increased compared with the same period last year, mainly due to: (1) the company set aside equity incentive fees; (2) increased management expenses after Suqian Ximai was put into production. Looking forward to 2021Q4, the performance may be improved under the base effect.

Mature channels are ploughed deeply, new channels are opened up, and multi-products are developed. On the one hand, companies have great potential, on the one hand, they deeply cultivate offline channels, laying out convenience stores and other channels to enhance the efforts of individual stores; on the other hand, they pay attention to the development of online channels such as Douyin and Pinduoduo to strengthen communication with consumers through regular live broadcast activities. In the future, with the improvement of channel layout, continuous innovation of products and release of production capacity, the company can still grow steadily.

Risk tips: macroeconomic downside risks, new product promotion risks less than expected, food safety risks.