Report guide

Results maintained rapid growth in 2021, but profits were slightly lower than we expected due to impairment of fixed assets and goodwill; 22Q1 performance was slightly higher than market expectations, but growth slowed slightly due to last year's high base and epidemic and rising costs. We believe that the company is currently in a period of business adjustment and look forward to the continuous recovery of the company's follow-up performance.

Main points of investment

The 21-year profit is slightly lower than we expected, and the 22Q1 performance is slightly higher than the market expectation. The company's income in 2021 is 3.345 billion yuan (+ 25.35%); the net profit is 189 million yuan (+ 10.83%); the non-net profit is 115 million yuan (- 10.47%); the income of 21Q4 is 831 million yuan (+ 16.98%); and the net profit is 27.57 million yuan (- 18.37%). The company's revenue is in line with our previous expectations, and its profit is slightly lower than our forecast (200 million in 21 years). The main reasons are: the relocation of the company's factory, the elimination of some equipment due to aging, resulting in a 7 million + loss of fixed assets; and the impairment of goodwill in the current period.

22Q1 realized income of 786 million yuan (- 4.09%) and net profit of 47.21 million yuan (- 22.24%).

Under the background of 21Q1 high base, the company's 22Q1 performance is slightly higher than market expectations.

In 21 years, the flavor business grew steadily, and the food ingredients business grew rapidly. In 21 years, the revenue of the flavor business was 556 million yuan (+ 7.78%); the income of the spice business was 224 million yuan (- 5.90%); and the income of the food ingredients business was 2.546 billion yuan (+ 34.26%). Split, we expect the company's food ingredients trade revenue of 1.944 billion yuan (+ 32.6%); in the food ingredients manufacturing business, chocolate business is expected to achieve 456 million yuan (+ 42.2%), jam business is expected to achieve 146 million yuan (+ 34%).

22Q1 flavor business: realized income of 125 million yuan (- 9.38%); spice business income of 56 million yuan (- 6.50%); and income of food ingredients business of 600 million yuan (- 2.39%).

Affected by the rise in raw material costs, the company's gross profit margin decreased slightly: in 2021, the company's gross profit margin was 16.02% (- 0.86pct), and 22Q1 achieved a gross profit margin of 16.88% (- 1.85pct). The gross profit margin decreased slightly, mainly due to the rising cost of raw materials.

Expense rate: 8.80% (- 0.02 pct) during 2021, sales / management / R & D / financial expense rates are 3.18% (+ 0.01pct), 4.37% (- 0.17pct), 1.19% (- 0.08pct),-0.05% (+ 0.21pct), respectively. The expense rate during 22Q1 is 7.94% (+ 0.79%), and the sales / management / R & D / financial expense rate is 2.87% (+ 0.43pct), 3.83% (+ 0.64pct), 1.41% (+ 0.02pct) and-0.17% (- 0.29pct), respectively.

Net interest rate: 6.97% (- 0.26pct) for 2021 and 7.48% (- 1.94pct) for 22Q1.

During the period of business adjustment, we look forward to a continuous recovery in the follow-up performance.

The company is currently in a period of business adjustment, looking forward to the subsequent landing of related business and continuous recovery of performance. 1) Flavor and Flavor Business: the company's tobacco flavor business is applying for an e-cigarette license and is looking forward to contributing continuously to its performance; secondly, the company's flavor factory is being relocated (Shanghai-Jiangxi), which has a slight impact on the flavor business in the short term; 2) the company's chocolate business has been delayed due to the short-term impact of the epidemic due to the expansion of new capacity. In 22 years, we expect chocolate to release 5000 tons of capacity. 3) the company holds a stake in Aice Holding (9.93%), which is the largest ice cream factory in Indonesia. With the second round of financing of the company, the value and valuation of Aice are gradually increasing, and there is still room for subsequent appreciation (Aice contributes 40 million + of the 21-year fair value change income), which will give the company a larger profit.

On the whole, we think that in the short term, due to the impact of the epidemic and rising costs, the company has a certain impact on the release of capacity and the pace of business adjustment, but it is expected to recover with the improvement of the epidemic.

Profit forecast and valuation

Taking into account the impact of the epidemic on performance and cost pressure is still large, we slightly lowered the previous profit forecast, given the "overweight" rating. It is estimated that the company's realized income from 2022 to 2024 will be RMB 3777 million, respectively, with an increase of 12.93%, 20.12% and 18.53% respectively over the same period last year. It is estimated that the net profit realized by the company will be 2.09%, 2.54%, 308 million yuan, respectively (the previous value from 22 to 23 is 271 million yuan, respectively), and the year-on-year growth rate will be 10.62%, 21.86% and 20.94% respectively. It is estimated that the EPS of 2022-2024 company is 0.54, 0.66, respectively, and the corresponding PE is 17.46, 14.33, 11.85 times.

Risk tips: COVID-19 epidemic repeatedly affected terminal demand, raw material costs continue to rise, and so on.