On the evening of April 28, 2022, the company released its annual report for 2021 and quarterly report for 2022: revenue of 2.54 billion yuan in 2021 (same decrease of 4.7%), net profit of 73 million yuan (same increase of 123%) and deduction of 7 million yuan (same increase of 101.5%).
2022Q1's revenue was 814 million yuan (up 44%), its net profit was 20 million yuan (up 38.5%), and non-16 million yuan was deducted (up 266%).
Main points of investment
The margin improved in the fourth quarter, and it is beneficial to open books in the first quarter.
The company's 2021 revenue is 2.54 billion yuan (4.7%), net profit is 73 million yuan (123%), and non-profit is 7 million yuan (101.5%), of which 2021Q4 revenue is 881 million yuan (92%), return net profit 35 million yuan (109%), deduction non-15 million yuan (103%), accelerated improvement in the fourth quarter, and ended smoothly in 2021. 2022Q1 revenue 814 million yuan (44% increase), return to the mother net profit 20 million yuan (38.5% increase), deducted non-16 million yuan (266% increase), the opening of books in the first quarter is beneficial, accelerate improvement. The gross profit margin in 2021 is 46.922% (same as 1.1pct increase), of which 2021Q4 is 36.13% (same as 0.9pct) and 2022Q1 is 38.37% (same as minus 14.5pct), which is caused by the rise of raw materials. The net profit rate is 3.20% in 2021 (same as 15pct), of which 2021Q4 is 4.29% (same as 85pct) and 2022Q1 is 2.58% (same as minus 0.7pct), mainly due to the decrease of gross profit margin. 2022Q1's final contract debt was 57 million yuan, down 22 million yuan from the previous month, an increase of 22 million yuan over the same period last year, and the reservoir effect is expected to restart. The net cash flow of 2022Q1 operating activities is 53 million yuan (up 145%), of which 813 million yuan is returned (up 50.6%). The Spring Festival effect is obvious.
The contribution of milk powder is greater than the price, and the new retail model is progressing smoothly.
In terms of products, the revenue of milk powder in 2021 is 2.116 billion yuan (12.5%), accounting for 83.34% (7pct), gross profit margin 54% (6pct), rice noodle revenue 18 million yuan (45%), accounting for 0.72% (0.5pct), gross profit 30% (5.6pct) Revenue from other categories is 405 million yuan (same as increase of 90%), accounting for 15.94% (same increase of 8pct), and gross profit margin is 10.46% (same as minus 11.5pct).
In terms of volume and price, the total sales volume of milk powder in 2021 is 17100 tons (2%), the corresponding ton price is 123800 yuan / ton (14%), the total sales volume of rice noodles is 400 tons (40%), and the corresponding ton price is 51900 yuan / ton (9%). Other total sales are 200 tons (38%), and the corresponding ton price is 2.0963 million yuan / ton (204%).
According to different channels, dealer revenue in 2021 is 918 million yuan (2%), accounting for 36% (1pct); direct supply customer revenue is 93 million yuan (82%), accounting for 4% (16pct); e-commerce revenue is 392 million yuan (7%), accounting for 15.5% (1.7pct); total underwriter revenue is 427 million yuan (22%), accounting for 17% (4pct) The underwriter's revenue is 329 million yuan (up 106%), accounting for 13% (with the same increase in 7pct). The successful promotion of the new retail model has enhanced the company's bargaining power in downstream channels and stores; other revenue is 13 million yuan (up 19%), accounting for 0.5% (same as minus 0.1pct); and other business revenue is 366 million yuan (up 202%), accounting for 14% (same as 10pct). By the end of 2021, there were 1526 dealers, a net increase of 584, including 226,174,277,248,463 and 29 in East District, South District 1, South 2, West, North 1, North 2 and other regions.
In terms of production capacity, the total production capacity of milk powder in 2021 is 18600 tons (same as an increase of 5%), the total production capacity of rice noodles is 400 tons (same as a decrease of 34%), and the total capacity of other products is 200 tons (same as a decrease of 47%).
Continue to strengthen the main brands and deeply cultivate new retail channels
At the brand end, by launching a series of variety shows such as Zhejiang Satellite TV's Journey of Youth, holding hands with important industry media such as NetEase, Inc, Bao Bao Shu, Mei Pomelo, Parenting Network, and so on, the brand exposure has been greatly enhanced; through the offline store interactive program "Mei Ma has something to say"
Focus on key areas, go deep into more than 400 stores for consumer interviews, enter the Z era mommy, covering a total of more than 150 million people.
At the product end, we constantly tap the nutritional needs of all kinds of groups under the new consumption situation, and innovate and launch new products such as "eye color" series lutein ester prepared milk tablets, "Mars baby" series of children's milk powder, Doudou milkshake, "Sheep Yipi" series of formula sheep milk powder and so on.
On the channel side, through "one store, one yard, one store, one store", the new retail team has built a business layout with Beijia Mall, Tmall flagship store and JD.com flagship store as the core brand window and Douyin, Kuaishou Technology, Xiaohongshu and other content e-commerce platforms as the extension.
2022 business plan: 1) create a big country brand; effectively improve the brand volume through the CCTV big country brand column; sink the 34th and 5th line market with the help of CCTV media; launch a series of activities of big country brands to enhance the tone of the brand; continue to build IP and shape the brand's young personality. 2) strengthen the main categories, promote the functionalization of categories, build user reputation, improve the efficiency of user drainage, and open up market segments; 3) comprehensively sort out and optimize channels, deep ploughing and intensive ploughing of baby channels, strengthen the new retail layout; 4) optimize the industrial layout, improve operational efficiency; 5) build a vision organization to promote cultural innovation.
Profit forecast
At present, the company is in a difficult reversal stage, and the marginal improvement is accelerating. We estimate that the EPS for 2022-2024 will be 0.12max 0.17max 0.24 yuan, and the current share price will be 2022 times higher than that of PE in 35-25-18, with the first coverage and a "recommended" investment rating.
Risk hint
Macroeconomic downside risks, epidemic drag on consumption, lower-than-expected promotion of new products, risk of substantial rise in raw materials, lower-than-expected production capacity, single product risk, and so on.