occurrences
On May 20, 2024, Yasui Foods held the 2023 Annual General Meeting of Shareholders.
Key points of investment
Promote factory localization transformation to improve business quality and efficiency
The company's overall strategy for 2024 is to improve quality and efficiency, focus on expanding big B channels, promote territorial transformation, and create regional exploits. In terms of channel layout, the company's strategy focuses on Big B channels, ensures channel strategy execution through organizational structure adjustments, adheres to a platform-based layout, and improves distribution channel efficiency. In terms of production capacity layout, the factory is close to the front line of the market to examine consumer needs, determine optimal process formulations through distributed R&D/headquarters screening, etc., and promote territorial transformation. Subsequent companies continuously coordinate production capacity growth and maintain steady capital expenditure. On the profit side, the company continuously optimizes the product structure. As the scale effect is released and the competitive pattern stabilizes, the strategy to improve quality and efficiency progresses steadily to achieve profit side optimization.
Build a second growth curve for grilled sausages, and strengthen high-end fresh packaging to fully enter the sausage business. The industry has entered a high growth trajectory. The company plans to build a second growth curve for sausages, starting with new and old dealers throwing grills in parallel. Currently, the product is still in the polishing stage, and plans to achieve sausage revenue of 300 million yuan by 2024. Lock Fresh Pack boosts brand potential. The company promotes iterative research and development, promotes label cleaning, off-season promotion, and peak season pasta. After seizing the market with high-end products, it then uses channel products to reshuffle the industry. The target is to become the main contributor category to the company's performance for 5-10 years. The crayfish market is expected to improve marginally. Upstream manufacturers will gradually take back outsourced factories, settle production, and adjust market prices through supply-side contraction. After the gambling period is over, the company will step up management intervention, dispatch marketing backbone, and promote information management. It is estimated that the overall crayfish industry in 2024 will be better than 2023.
Profit forecasting
We are optimistic that the second growth curve of the company's sausage will release results, create regional exploits, and continue to boost profitability through product structure optimization. It is estimated that in 2024-2026 EPS will be 5.84/6.79/7.83 yuan, respectively. The current stock price corresponding to PE is 17/15/13 times, respectively, maintaining a “buy” investment rating.
Risk warning
Downside macroeconomic risks, growth in Xinhongye and Xinliuwu falling short of expectations, failure to meet equity incentive targets, falling short of expectations in production capacity expansion, rising raw materials, etc.