Core viewpoints
The company's overall operating performance in the third quarter was under pressure, and revenue in a single quarter declined compared with the same period last year. In terms of products, with the exception of pork and other products, the sales of some products have increased, while the rest of the products have performed poorly.
In terms of channels, retail and distribution channel sales have declined, in which franchisees benefit from the company's focus on help and optimization this year, the decline is relatively small. On the profit side, the gross profit margin benefited from the increase in the price of raw materials such as beef and pork, while the increase in sales and management expenses in the short term put some pressure on the profit end of the company. In terms of production capacity, some of the company's fund-raising projects have been officially put into production, and the follow-up will be gradually released according to the actual business needs to support the company's business development.
Event
The company released its third quarter 2023 report:
During the reporting period, the company achieved revenue of 619 million yuan, an increase of 1.92% over the same period last year; net profit of 107 million yuan, down 2.90% from the same period last year; and net profit of 104 million yuan, up 4.75% from the same period last year.
In Q3 single quarter, the company achieved revenue of 202 million yuan, down 11.89% from the same period last year; net profit from home was 33 million yuan, down 18.76% from the same period last year; and net profit from non-return was 32 million yuan, down 16.93% from the same period last year.
Brief comment
The revenue end is under pressure as a whole, and the pork products are relatively superior.
The company's overall operating performance in the third quarter was under pressure, with single-quarter revenue declining compared with the same period last year. From a sub-channel point of view, the company accounts for a relatively high proportion of retail channels (65.73%). 23Q3 sales decreased by 11.04% compared with the same period last year. Among them, in terms of store types, revenue from franchise channels (53.72%) and distributor channels (12.01%) decreased by 6.43% and 27.10% respectively compared with the same period last year. As of the end of 23Q3, the company had 1798x726 franchise stores / dealerships, a net increase of 10 stores compared with the end of 23Q2. Franchise stores benefited from the company's key assistance and optimization this year, and the decline in sales was relatively small. At the same time, the company's 23Q3 wholesale channel (26.40%) revenue fell 25.41% compared with the same period last year, and the corresponding wholesale channel distributors increased by 23 to 519 compared with the end of 23Q2. In addition, the company also added a new Shang Chao team this year to be responsible for the development of Shang Chao channels. 23Q3 contributed 9.48 million yuan in revenue (4.69%), and the number of Shang Chao customers increased by 9 to 60 compared with the end of 23Q2. In terms of products, the company's 23Q3 meat and poultry products (68.24%) sales fell 13.69% year-on-year, of which revenue from beef products (39.93%) fell 23.15% year-on-year, while poultry (18.21%), pork (7.95%) and mutton (2.15%) performed relatively well, with corresponding revenue up 2.82%, 9.00% and 2.31%, respectively. In terms of aquatic products, the company's 23Q3 fish (14.27%) and shrimp products (11.22%) sales fell 10.74% and 14.36% respectively compared with the same period last year.
The gross profit end benefits from improved costs, and the increase in short-term expenses affects profits.
The company's 23Q3 gross profit margin was 26.25%, an increase of 2.39pcts over the same period last year. The increase in gross profit margin was mainly due to the decline in the price of raw materials such as beef and pork. In terms of expenses, the company's 23Q3 sales / management / R & D / financial rates are + 2.30/+2.57/+0.04/-2.34pcts year-on-year, respectively. Among them, the increase in sales rates is mainly due to the increase in relevant personnel input to meet the needs of relevant channel expansion; the improvement in management rates is mainly due to the increase in relevant supporting management personnel and the depreciation of the company's new plant. The decline in financial rates is due to an increase in interest income as companies use idle funds to buy time deposits. The combination reduced the company's 23Q3 net interest rate by 1.36pcts to 16.10% compared with the same period last year.
Raising and putting into production can be gradually released to support the company's business development.
In terms of production capacity, the company's "annual production of 50,000 tons of fermented and conditioned food project" has been successfully put into production, and the new production capacity will be gradually released according to the actual business demand. At the same time, the company's "annual production of 5000 tons of food fermentation liquid project" is also in trial production, can use special fungus fermentation to improve the existing flavor of products and improve product quality. At the same time, in terms of channel expansion, the company is trying to build new channels at both ends of BC this year. After early exploration, it is also feedback according to the actual business situation, timely adjust market positioning and team operation mode, and seek new channels. Followed by a rebound in market demand, combined with the blessing of production capacity, the company's operating performance is expected to improve.
Profit forecast: combined with the three quarterly reports, we lowered our previous profit forecast. It is estimated that in 2023-2025, the company will achieve an income of 8.46,9.82 and 1.124 billion yuan, and a return net profit of 1.52,1.81 and 208 million yuan, corresponding to 1.10,1.31,1.51 yuan per share.
Risk tips: 1) Food safety risk: prefabricated food as a daily diet for public consumption, food safety is the top priority. If the company's products have food safety problems, the customer reputation accumulated in the early stage will also be lost, which will have a great impact on the company's existing business. 2) the risk of rising raw material prices: the company's raw material procurement is mainly meat, in which, such as pork prices, there is a more obvious fluctuation cycle, if the company can not effectively cope with the adverse effects of cost changes, the company's profitability may decline. 3) the risk of the deterioration of the market competition pattern: at present, the heat of the prefabricated vegetable industry is high, which attracts a lot of capital to enter. If the company is in a disadvantageous position in the market competition, the advantages accumulated in the early stage will not be brought into full play, and the space for follow-up development is also relatively limited.