Guolian Aquatic products released its semi-annual report of 2022: 2022H1's total revenue was 2.415 billion yuan, an increase of 15.03%, and the net profit returned to its mother was 33 million yuan, an increase of 222%.

Main points of investment

The performance exceeded expectations and the gross margin was under short-term pressure.

2022Q2's revenue was 1.353 billion yuan (up 34%), and its net profit was 23 million yuan (up 310%). The gross margin 2022Q2 is 12.00% (minus 4pct), which is due to the rise in raw materials. The net interest rate of 2022Q2 is 2.03% (same as increasing 1pct), of which the sales expense rate is 3.89% (same as minus 1pct) and the management expense rate is 2.49% (same as minus 1pct). The net cash flow of 2022H1's operating activities was 256 million yuan (an increase of 3%). The final contract liability of 2022H1 was 84 million yuan, a decrease of 49 million yuan.

There has been a high growth of prefabricated vegetables and a rise in the volume and price of aquatic products.

In terms of products, the company's product structure is gradually transformed to catering materials and marine food based on prefabricated dishes, and the upstream aquaculture business is spun off. 2022H1 Aquatic Food Industry / Feed Industry / other revenue 22.73 million yuan, + 20%, + 20%, 33%, 19%, 12.79%, 3.13%, 2.55%, respectively, year-on-year-6/-4/-11pct. Of this total, the revenue from prepared vegetables was 561 million yuan (up 36%). In terms of volume and price, the sales volume of 2022H1 aquatic products is 33100 tons (an increase of 6%), and the price of a ton is 68700 yuan / ton (an increase of 11%). From a sub-channel point of view, food and beverage channels are subject to certain restrictions, and the e-commerce end of Shang Chao is growing rapidly. From a sub-regional point of view, the company continues to deepen the domestic market, with domestic / overseas revenue of 1.219 billion yuan, an increase of 12% and 19%.

Profit forecast

We are optimistic about increasing the layout of prefabricated dishes and bringing forth new products. It is estimated that the company's EPS in 2022-2024 will be 0.10 EPS 0.170.25 yuan respectively, and the current share price corresponding to PE will be times higher than that in 56-33-23, covering for the first time and giving a "buy" investment rating.

Risk hint

Macroeconomic downside risks, epidemic situation dragging down consumption, prepared dishes less than expected, and so on.