The company's 2021 income / return net profit increased by 25% / decreased by 5% to 860 million / 77 million yuan, and the new area expansion and coconut production were better during the reporting period. 2021Q4 trading business is under pressure due to a high base year-on-year decline and the rising cost of milk powder, with the company's revenue / return net profit falling 3.6% and 60.7%. In the face of cost pressure such as milk powder, the company raised the price of condensed milk-related products by 3% to 10% in January this year. It is expected that the local epidemic situation in March will have an impact on the company's short-term catering channel product management.
In 2021, the company's income / return net profit increased by 25% / decreased by 5.1% to 860 million / 77 million yuan. In 2021, the company realized operating income of 860 million yuan (+ 25.2%), net profit of 77 million yuan (- 5.1%) and non-return net profit of 68 million yuan (+ 15.4%). Among them, 2021Q4 realized income of 240 million yuan (- 3.6%), net profit of 17 million yuan (- 60.7%), and deducted non-net profit of 18 million yuan (- 30.0%).
Increased orders from industrial customers-the volume of coconut products accelerated the growth of direct sales channels in the second half of the year, and the contraction of 2021Q4 dairy trading business was a drag on revenue. In 2021, the company's income from concentrated dairy products was 540 million yuan, year-on-year + 23.3% (2021H _ 2 + 9.9%), dairy trade income 2.50 yuan, year-on-year + 10.6% (2021H2-29.3%), and other products income 61 million yuan, year-on-year + 305% (2021H _ 2 + 307%). According to different channels, the direct marketing channel based on food processing achieved revenue of 140 million yuan, + 25.9% from the same period last year (2021H2 + 42.2%). In the second half of the year, the company released coconut milk, successfully opened up customers of food manufacturing enterprises such as Yuanqi Forest, and accelerated the growth of direct sales, while the distribution channels dominated by catering, baking, tea and household consumption achieved revenue of 460 million yuan and + 31.4% from the same period last year (2021H2 + 8.8%). Growth slowed in the second half of the year. The negative revenue of 2021Q4 company compared with the same period last year is mainly due to the higher base of 2020Q4 trade business, and the rapid growth of revenue from other products comes from the rapid expansion of coconut orders.
Channel situation: dealers have a steady storage capacity, and online channels are still in the cultivation stage. East and South China are the most important markets for the company's products, with revenue of 474 million yuan in East China in 2021, + 14.9% year-on-year (2021H2-10.3%), and 128 million yuan in South China, + 33.5% year-on-year (2021H2 + 22.0%). In addition, the company is accelerating the layout of other new areas. in 2021, revenue in North China was 70 million yuan, + 27.9% compared with the same period last year, and revenue in central China, southwest, western and northeast China was + 64%, 24%, and 132%, respectively, compared with the same period last year. 77%, the new area is expanding faster.
At the end of 2021, the company had 207 dealers, a net increase of 45 compared with the end of 2020, of which East China / South China / other regions had + 18 / + 3 / + 24 respectively. During the reporting period, the company's online channel revenue of 1.31 million yuan, is still in the cultivation stage.
The rising prices of raw milk powder and white sugar are a drag on profits. The company started to raise prices at the beginning of the year, and the sales expenses were expanded during the reporting period. In 2021, the company's gross profit margin of dairy products decreased by 25.1% compared with the same period last year. After the adjustment of transportation costs, the gross profit margin of dairy products decreased by 25.7% and decreased by 0.7Pct compared with the same period last year. The decline in gross profit margin was mainly due to the continuous rise in the price of GDT milk powder in the second half of last year, while the prices of packing materials and white sugar also rose to a certain extent. According to Wind,GDT skimmed milk powder / skimmed milk powder prices are currently up 37% and 11% respectively, and the prices of primary dealers of white sugar are up about 7% year on year. In the face of raw material cost pressure, the company raised the price of condensed milk-related products by 3% to 10% at the beginning of the year. During the reporting period, the company's sales / management / finance / R & D rates are year-on-year-0.6/-0.4/+0.02/+0.1Pct to 6.5%, 4.1% to 4.1%, 2.1%, 0.2%, respectively. If the transportation fee is adjusted, the sales rate is from + 1.8Pcts to 8.8%. The increase in sales rate is mainly due to the increase of sales staff, advertising and promotion expenses.
Risk factors: food safety problems; intensified market competition; the company's new products & new market development is not as expected; raw material price fluctuation risk.
Investment suggestion: considering the disturbance of local epidemic situation in March, cost pressure, and increasing investment in short-term expenses for new business development, adjust the company's 2022 EPS 2023 forecast to 0.64 pound 0.91 yuan (the original forecast 1.00 pound 1.19 yuan), the new 2024 EPS forecast is 1.15 yuan, the current price corresponding to PE is 37-26-21 times. With reference to the comparable company Hairong Technology's 30 times PE valuation and the company's better growth next year, the company is given a target valuation of 28 times PE in 2023, corresponding to a target price of 26 yuan, maintaining the "overweight" rating.