Incidents:
On April 29, 2023, Guolian Fisheries released its 2022 annual report and 2023 quarterly report. In 2022, the company achieved revenue of 5.114 billion yuan, an increase of 14.31% over the previous year; the net loss was 0.08 billion yuan, a slight decrease from the same period last year. In the first quarter of 2023, the company achieved revenue of 1,415 million yuan, an increase of 33.23% over the previous year; Guimu's net profit was 10 million yuan, an increase of 10% over the previous year.
Comment:
To build the core competitiveness of the aquatic food business, consumption upgrades in the prepared food industry will usher in a double blow between supply and demand. The company continuously optimized its business structure, achieving total revenue of 5.114 billion yuan in 2022, of which aquaculture food revenue was 4.828 billion, an increase of 18.97% over the previous year; feed revenue was 201 million, a decrease of 35.36% over the previous year. The company's main products are deep processing, initial processing, and selected seafood from around the world, mainly prepared dishes. The revenue of prepared dishes in 2022 was 1,131 billion yuan, an increase of 34.48% over the previous year, a significant increase. According to forecasts, the size of China's prepared food industry will reach 419.6 billion yuan in 2022, and the prepared vegetable market will reach trillion yuan in 2026. The safety and health characteristics of prepared dishes are in line with the trend of consumption upgrading, and the increase in consumer consumption capacity is also driving an increase in demand for prepared dishes. Consumption upgrades and the accelerated pace of life, combined with the rapid development of the cold chain transportation industry, are expected to usher in a double blow between supply and demand in the prepared vegetable industry.
Prepared dishes are developed in a balanced manner across all channels, taking into account the B and C sides of the domestic market. The company has leading market positions in two mainstream markets, such as China and the United States. The company has made full use of its global supply chain and R&D advantages. The product structure has gradually been transformed into meal ingredients and marine food, mainly prepared dishes, and the added value and influence of products has been further enhanced. The C-side market uses the company's prepared dishes as the leading product to enhance brand added value, market penetration rate and customer repurchase rate; the B-side market must maintain the company's brand image of high quality, strict standards and stable supply, and strengthen the depth of high-end catering cooperation. At the end of 2022, the company raised 700 million yuan and invested in the company's two prepared vegetable projects, which is expected to expand the deep processing capacity of aquatic products to 84,000 tons. Among them, the construction period for the central kitchen project is 24 months, and the construction period for the fishery deep processing project of the National League Yiyang Company is 12 months. After completion, it will effectively fill the production capacity gap and strengthen the layout of the prepared dishes sector. The prepared food industry is developing rapidly, and the company's costs are excellent, production automation is high, and the channel layout is perfect. The performance growth that can be obtained by developing prepared dishes is higher, and the moat is wider.
Profit forecast and investment rating: We expect the company to achieve operating income of 61.34, 71.06 and 8.563 billion yuan respectively in 2023-2025, with net profit of 1.25, 2.20 and 356 million yuan respectively. EPS is 0.11, 0.19 and 0.31 yuan/share respectively, and the corresponding PE is 45.83, 26.08 and 16.13x respectively, maintaining the “recommended” rating.
Risk warning: The COVID-19 pandemic affects consumer risk; risk of fluctuations in raw material prices; risk of food quality and safety.