Event: Anji Food released its quarterly report in 2019, the company's 19Q1 achieved a total operating income of 121 million yuan, an increase of 70.67%, and a net profit of 13 million yuan, an increase of 22.09% SPS 0.08 yuan per share.
Comments:
(1) the channel layout has been continuously improved, and the revenue has exceeded expectations. 19Q1 achieved a total operating income of 121 million yuan, an increase of 70.67%, and revenue growth exceeded expectations. This is mainly due to the continuous promotion of channel layout during the reporting period and the increase in revenue from Tetong, e-commerce, overseas channel customers and other business.
(2) the change of channel structure leads to the decline of gross profit margin and the continuous investment on the cost side. The company's sales gross profit margin fell 11.42 percentage points to 19.91%, mainly due to the increase in the proportion of Tetong channel products, but the lower gross profit margin of food processing enterprises. The sales expenses also increased by 50.95%, mainly due to the mailing charges brought about by the curry volume in e-commerce channels during the reporting period, as well as the increase in supermarkets, promotional activities and personnel wages in order to increase the turnover rate of stores; the management expenses also increased by 47.93%, mainly due to the increase in one-time fees such as intermediary service fees during the reporting period. The rate of sales expenses and management expenses decreased by 0.69% and 3.09% respectively, and with the reduction of one-time expenses in the future, the expense rate is expected to decline further.
(3) short-term profits continue to be under pressure, continuous improvement of channel layout and continuous volume of curry are expected to bring long-term profit growth. Restricted by the continuous input on the cost side, the non-return net profit of 19Q1 decreased by 13.4%, while the non-return net profit increased by 22.09%, mainly due to the increase of government subsidies during the reporting period. Curry, the core product of sauce condiments, is expected to continue to increase with the improvement of channel layout. In addition, probiotic products also have the potential opportunity to increase volume by virtue of channel layout.
Profit forecast and investment rating: the growth rate of the first quarter slows down, the proportion of compound condiment is still high, the growth rate is low, and the growth rate is slow for the whole year. We have lowered our revenue in 19-20 years from 474 million yuan to 589 million yuan, with a growth rate of 24% 40%. The net profit has been reduced from 0.7 million yuan to 0.60 percent, with a growth rate of 52%, 48% and 0.36 yuan per share, respectively. It is estimated that in 2021, the operating income will be 765 million yuan, and the net profit will be 130 million yuan, EPS0.77 yuan per share. Based on the consideration that the old business has been stable, the volume of curry for large items, and potential opportunities for the release of probiotics, the future will be better. We believe that the company is more flexible in the future, and its valuation still has room to rise. We will continue to be optimistic, giving it 31 times PE in 20 years, with a target price of 16.43 yuan and 30% space.
Risk tips: food safety control risk; raw material price fluctuation risk; industry prosperity decline risk