Time-honored brand Shouzheng innovation, century-old "dumplings" heart coruscate new vitality: Wufangzhai zongzi originated in 1921, 2022 zongzi / moon cakes / meals / cakes accounted for 71% of income, such as 10% picks, 6% of 11%, chain stores / e-commerce / merchants / distribution channels accounted for 12% of revenue 33% of 13% of 33% of the revenue. On the basis of zongzi business, the company further put forward the "waxy + strategy" and successively launched Chinese dim sum glutinous rice foods, including glutinous rice dumplings, glutinous rice moon cakes, Eight Delicacies Rice, and Youth League, among which the series of moon cakes have achieved volume, and their income increased against the trend during the epidemic in 2022 compared with the same period last year.
In 2022, the company realized income / return net profit of 2.462 billion yuan, down 14.87% and 29.01% compared with the same period last year. With the recovery of consumption after the epidemic and the company's business repair, 1H23 realized income / return net profit of 18.66 / 256 million yuan, an increase of 5.78% over the same period last year (the lower growth rate was deferred to Q3 recognition).
In season, the prosperity of the product industry is high, and the iteration of product types contains development opportunities: 1) zongzi: according to "attaching importance to the development of traditional food industry to give new life to China's traditional food" released by China Food, the market size of zongzi increased from 4.916 billion yuan to 7.337 billion yuan in 2015-19, with a CAGR of 10.5%. It is estimated that the CAGR for 2020-24 will be 7.0%. Among them, Wufangzhai leads the industry in terms of market share. In 2019, Wufangzhai ranked first with a share of 30% in the sales of rice dumplings. Looking forward to the future, gift boxing, breakfast and daily work are expected to become the breakthrough points for making the industry cake bigger. 2) Moon cakes: according to "attaching importance to the Development of traditional Food Industry to rejuvenate traditional Food in China" released by China Food, the market scale of mooncakes increased from 13.18 billion yuan to 19.67 billion yuan in 2015-19, with a CAGR of 10.5%. It is estimated that the CAGR in 2020-24 will be 6.0%. The competition pattern of moon cakes is relatively scattered, and misplaced competition among different factions contains opportunities for category iteration. The share of online / offline sales of Wufangzhai in 2020 was 9.3% and 8.6%, both ranked third.
The combination of zongzi and moon cakes has a total strength, online and offline balance: 1) on products: on zongzi, the unit price of zongzi from 2018 to 2021 is 6.9%, and the trend of price increase brought about by gift boxes is obvious. On mooncakes, the company's operating experience in zongzi can be better transferred to mooncakes, traditional culture and live streaming and other video hotspots, driving mooncake revenue against the trend in 2022. 2) online: online has become an important source of increment, the offline business is expected to benefit from the recovery in consumption, and the store business is also expected to release profits with operating leverage.
Leading brand strength, cut into content e-commerce, build a multi-echelon product matrix: seasonal products have a brand moat, as a "time-honored brand" Wufangzhai brand strength is strong, and keep pace with the times to win over young consumers. The company is also actively involved in content e-commerce. During the "618" period in 2023, Wufangzhai became the first place in sales of Douyin grain and oil / dry goods / seasoning brand, and the second place of Tmall food brand sales, second only to Maotai. In addition, the company's moon cakes have achieved a breakthrough, and other products such as Youth League and rice balls are ready to be launched, which is expected to further iron out the seasonal fluctuations in income and expand the product matrix around 24 solar terms and five major scenarios.
Profit forecast, valuation and rating: as a leading company in zongzi industry, the company has strong marketing and innovation ability, and its leading position is expected to be maintained. In addition, the company's second growth curve mooncake series gradually expands through the differentiation path, opening up the imagination space for multi-category sales. We expect the 2023-25 homing net profit to be 21. 0 million yuan. The current share price corresponds to the valuation of PE in 21-17-14, covering for the first time and giving a "buy" rating.
Risk hints: changes in consumer demand, seasonal fluctuations, intensified market competition, the risk of stock price fluctuation of secondary new shares.