Most of the negative factors affecting the decline of the main business in 2020 have been eliminated, and the company's business is expected to recover strongly under the positive new product-marketing strategy in 2021. The company has deep water barriers in packaging, a good expansion of beverages, and long-term soft drink faucets can be expected. Maintain a "buy" rating.
2020 income / return net profit-4.8% Universe 6.6%. The revenue of Nongfu Spring in 2020 was 22.877 billion yuan, down 4.8% (H1/H2 was-6.21% H1/H2 3.23%), and the net profit of returning mother was 5.277 billion yuan, an increase of 6.6% (H1/H2-0.43% and 16.46% respectively). In 2020, the company's gross profit margin was 59%, an increase of 3.6 pcts over the same period last year, mainly due to the sharp decline in the price of pet raw materials; the sales expense rate / management expense rate / financial expense rate was-0.12 ppt, which was not much different from that in 2019.
Epidemic-torrential rain-inventory control, resulting in a decline in revenue of the main business in 2020. In 2020, the revenue of packaging water reached 13.966 billion yuan, a drop of 2.6% (H1/H2 + 0.7% gamble 5.9% respectively). Although the impact of the epidemic slowed down in the second half of the year, the nationwide rainstorm in July affected the company's production / transportation, superimposed the company's active inventory control strategy, and the decline in packaging water H2 intensified. The revenue of tea drinks reached 3.088 billion yuan, down 1.6% (H1 / H2 compared with-10.7% Universe 10.5%). It is estimated that oriental leaves are growing in double digits. Tea π, driven by new products, H2 recovers quickly and decreases slightly throughout the year. Functional drinks and fruit juice drinks were more obviously affected by COVID-19 's epidemic situation. The revenue of functional drinks was 2.792 billion yuan, down 26.1% (H1/H2 was-36.4% and 10.5% respectively), and that of fruit juice drinks was 1.977 billion yuan, down 14.5% (H1/H2 was-9.7% and 18.4% respectively). In addition, the company's soda, TOT carbonated drinks and charcoal still coconut coffee new flavor products performed well, and other products achieved a total revenue of 1.054 billion, an increase of 135.8% (H1/H2 was 210.3% H1/H2 99.7% respectively).
Packaging water and tea are expected to recover strongly in 2021, and the company is fully competitive for a long time. Looking forward to 2021, the impact of COVID-19 's epidemic situation is weakening, and the company is actively promoting new products and marketing (the rhythm of new products on the market is earlier than in previous years). Coupled with the low inventory in the early stage, the operation is expected to recover obviously. The water business continues to benefit from the increase in household consumption penetration of medium and large packaged water (double-digit growth in 2020), and Wuyishan tea has been launched this year to further refine the household consumption scene. The company's tea business technology is in the lead. In 2021, Oriental leaves launched two new flavor products, Xuanmi tea and green orange Pu'er. Tea is expected to increase marketing and promotion efforts. Energy drinks scream to launch isotonic sports drinks and electrolyte drinks to further highlight the professionalism of the product. In the long run, the company continues to do product segmentation in the field of packaging water, through the benign dynamic cycle of products, brands, channels and supply chain (water source), build high barriers, and fully enjoy the packaging water dividend (fast growth in large industries & small faucets are strong enough); beverage business has a scale, and the layout of a number of potential tracks, hope and packaging water business coordinated rapid development, optimistic about the company's continued growth.
Risk factors: increased competition in the industry, higher-than-expected impact of the epidemic, fluctuations in raw material prices, food safety risks
Investment advice: taking into account the upward pressure on raw material costs, slightly reduce the 2021Universe 22 EPS forecast to 0.53Unix 0.62 yuan (the original forecast 2021Universe 22 EPS is 0.57max 0.67 yuan), add the 2023 EPS forecast to 0.72 yuan, maintain the "buy" rating.