Event: according to the company's mid-2020 report, 2020H1 achieved an operating income of 314 million yuan, an increase of 149.68% over the same period last year, and a net profit of 64.0212 million yuan, up 63.21% over the same period last year.
2020Q2 realized an operating income of 123 million yuan, an increase of 286.76% over the same period last year, and a net profit of 15.1361 million yuan, an increase of 106.02% over the same period last year.
Comments: the product line is constantly extending, and the brand meat is rapidly expanding. The company has returned to the main business of meat products, extending from the original single traditional ham to other categories, adding special meat products, brand meat and vegetable meat. 2020H1's revenue from traditional ham / specialty meat was 0.74 billion yuan, an increase of 1.18% / 123.90% over the same period last year. The brand meat sold quickly and realized revenue of 160 million yuan.
Brand gross profit margin is lower and the overall gross profit margin is lower, and the cost rate is significantly lower. 2020H1's annual gross profit margin fell 16.23 pct to 29.71% compared with the same period last year, mainly because the brand gross profit margin was low, which pulled down the company's overall gross profit margin. During the 2020H1 period, the expense rate decreased by 5.5pct to 8.27% compared with the same period last year, of which the sales / management / financial expense rate was 5.69% / 2.61% /-0.04% respectively, with year-on-year changes of-4.30 pct/-3.07 pct/ + 1.86 pct. The increase in the rate of financial expenses is mainly due to the increase in interest due to the increase in bank loans in the current period.
Actively explore new channels, with a large number of low-cost imported raw materials. The company comprehensively develops new channels, such as online celebrity e-commerce, fresh retail, community e-commerce and content e-commerce channels. In the first half of the year, the company's online e-commerce channel developed rapidly, adding small packaging and characteristic meat products suitable for household consumption.
Carry out live broadcast online celebrity goods, creating a gold word sausage and spicy sausage and other popular style items. In terms of community e-commerce, it cooperated with the local large fresh retail platform to achieve one-stop sales of C2M with "users placing orders with one click and delicious delivery home". Revenue from online channels reached 927.256 billion yuan, an increase of 112.78 percent over the same period last year. The company has 60,000 tons of cold storage and has purchased high-quality pork from abroad on a large scale since 2019, and the price is lower than that at home. At present, the company has a total of 21250 tons of pork raw materials, of which 17300 tons are in stock and 3950 tons are on the way, which are expected to be used for raw materials in the next two years. Importing low-cost raw materials will ensure a high gross profit margin in the future.
Profit forecast: from 2020 to 2022, the EPS is expected to be 0.16,0.27,0.38 yuan, and the corresponding PE is 44X, 26x and 18X respectively. Cover for the first time, giving a "buy" rating.
Risk hint: the development of new channels is not as expected, and the competition in the industry is intensified.