Incidents:
The company released a report for the third quarter. The revenue for the first three quarters was 307 million yuan, an increase of 32.68% over the previous year, and net profit attributable to shareholders of listed companies was 383.7794 million yuan, an increase of 25.66% over the previous year.
Commentary:
1. Channels continue to gain strength, and revenue and profit are growing faster
The company's revenue for the first three quarters was 307 million yuan, an increase of 32.68% over the previous year, mainly due to increased sales revenue from retail, e-commerce, overseas and special channel customers. The company focuses on the Southeast Asian market. The revenue from overseas channels in the first three quarters was 7.141,900 yuan, an increase of 36% over the previous quarter. The company's operating cost in the first three quarters was 225 million yuan, an increase of 40.57% over the previous year, mainly due to a year-on-year increase in operating income and an increase in the share of special channel products. Net profit attributable to shareholders of listed companies in the first three quarters was 383.794 million yuan, an increase of 25.66% over the previous year, and the growth rate was fast.
2. A slight decline in gross margin led to a decrease in net interest rate, and cost control capabilities further strengthened the company's gross profit margin in the first three quarters of 26.58%, -4.12pct compared to the previous year. We believe the main reason was the rise in raw material prices and depreciation from new factories. The net profit margin was 12.5%, -0.7pct year-on-year, mainly affected by the decline in gross margin. Sales expenses were 27 million yuan, +22.73% year on year, sales expense ratio was 8.9%, -0.52 pct year on year. We think the main reason was the rapid increase in the company's revenue. Management expenses were 13 million yuan, compared to -19.16% compared to the previous year, and the management expenses ratio was 7.04%, -2.91pct compared to the previous year, reflecting the further improvement of the company's internal management capabilities. The sales expense ratio and management expense ratio both declined year-on-year, indicating that the company's ability to manage and control costs was further strengthened.
3. Focus on the condiment sector, and curry products are yet to be released
The company has always focused on R&D, production and sales of condiments. The main product, compound seasoning powder, accounts for more than 60% of revenue. At the same time, the company adopted a “two-pronged approach” strategy of channel expansion and market penetration. Through online+offline+logistics, the company's sales channels formed a deeply integrated online and offline sales network. At present, most of the country's NKA has entered the market, and BC Super Farmers is also vigorously expanding. At the same time, the company is continuously strengthening e-commerce platform channel construction. Curry products are expected to be sold further through channel construction to further improve the company's performance.
Profit forecast: Revenue for 19/20/21 is expected to be 420,589,765 million yuan, with growth rates of 24%, 40%, 30%, respectively; net profit is 0.60,089,130 billion yuan, a growth rate of 52%, 48%, 46%; EPS is 0.26,0.38,0.55 yuan/share, respectively. Based on considering that the old business has stabilized and that large single products of curry have been released, there are potential opportunities for probiotics to be released, and the future is positive. We think the company will be more flexible in the future, maintain its purchase rating, give it 31 times PE in 20 years, with a target price of 11.78 yuan
Risk warning: food safety risks; developing overseas markets falls short of expected risks; declining industry sentiment