2019 & 1Q20 performance is basically in line with expectations
The company announced its 2019 results: revenue was 5.961 billion yuan, up 20.4%, and net profit was 193 million yuan, up 48.7%, consistent with the previous performance of KuaiBao, deducting 38.89 million yuan from non-parent net profit, down 57.5%, lower than market expectations, mainly due to a greater decline in gross profit margin rather than an increase in recurrent profit and loss. The company intends to distribute a cash dividend of 0.86 yuan (including tax) to shareholders for every 10 shares, with a dividend rate of about 22.4%. 1Q20 revenue fell 7.7%, return net profit fell 78%, and non-return net profit fell 70%, which is basically consistent with the previous performance forecast and in line with market expectations.
Trend of development
Baicaowei: accelerated growth in 2019, expected 1Q20 epidemic mainly affects the supply chain. In 2019, the income of all kinds of herbs increased by 29%, which is faster than that of last year. We believe that the main reason is that the daily growth of large single products of nuts has doubled, while the growth of dried fruit / dried meat seafood products has accelerated, with an increase of 37% and 34% respectively. In terms of channels, Baicaowei's live broadcast business sales in 2019 was nearly 120 million yuan. The company said that the input-output ratio was higher than the current platform promotion resources. The new retail sales revenue was 660 million yuan, an increase of 59.5%. A total of 10 offline stores have been opened, which has become a rapid growth point of the company's performance. We expect that the 1Q20 epidemic will affect the delivery and logistics of Baicaowei supply chain, so short-term revenue and profits will be affected. We believe that with the gradual weakening of the impact of the epidemic, we are expected to achieve restorative and accelerated growth in the following quarters.
Miss you so much: with the active adjustment of our department in 2019, it is expected that the impact of the 1Q20 epidemic will be greater. In 2019, the performance of your department has improved quarter by quarter, with a streamlined and efficient store with a scale of more than 700. on the product side, we estimate that freeze-dried products are growing rapidly, while red dates are structurally adjusted, so the gross profit margin is reduced by 5.9ppt. The company said that due to the impact of the epidemic, 1Q20 offline stores were suspended and online sales logistics were blocked, but at present, with the domestic epidemic under control, the company has gradually returned to normal business status.
The 2020 budget target is relatively reasonable. The company has a budget revenue target of 6.832 billion yuan, an increase of 14.62%, and a net profit of 115 million yuan, a decrease of 40.28%. We believe that the financial budget takes into account the negative impact of the epidemic on performance, which is relatively reasonable, and it is necessary to continuously observe the recovery of the company's business form under the influence of the epidemic.
Profit forecast and valuation
As there is still uncertainty about the timing of the company's sale of Baicawei, our profit forecast still includes Baicawei business. Considering the impact of the epidemic on the performance of our headquarters and Baicaowei, we have lowered the 20% EPS forecast for 21 years by 36% to 0.26 pm 0.39 yuan, and the current price correspond to the current price corresponding to the average valuation center of the sector, which will give 40 times Pmax E in 2020 and reduce the target price by 14% to 10.6 yuan. The current price has 16% upward space, temporarily maintaining an outperforming industry rating.
Risk.
COVID-19 epidemic continues to ferment, industry demand changes, cost fluctuations, food safety risks.
