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农夫山泉(9633.HK):利润略超预期彰显强大盈利能力 看好2021年恢复较好成长

9633.HK (Nongfu Springs): profit slightly exceeding expectations shows strong profitability and is optimistic about returning to better growth in 2021.

海通證券 ·  Apr 9, 2021 00:00

Event: on March 25, 2021, the company disclosed the 2020 performance announcement, of which the main business income was 22.877 billion yuan and the net profit was 5.277 billion yuan.

Comments:

Overall situation: the decline in the low single digits on the income side is basically in line with expectations, while the high single digit growth on the profit side continues to demonstrate strong profitability.

In 2020, the company's main business revenue reached 22.877 billion yuan (YOY-4.8%, decreased by 6.2% in mid-2020), with a net profit of 5.277 billion yuan (YOY6.6%). According to the specific split of the income statement, (1) on the cost side, it mainly benefits from the decline in the purchase price of PET & due to the social security relief policy implemented by the Chinese government, the company's gross profit margin rose to 59.0% from 55.4% in 2019. (2) on the expense side, the company's sales expense rate / management expense rate / financial expense rate is 24.1% / 5.8% / 0.3%, and the sales & management expense rate is basically the same as that in the same period in 2019. The rapid increase in financial expenses is mainly due to the increase in interest expenditure on interest-bearing loans in 2020. (3) other income 641 million yuan (YOY-17%), other expenses 249 million yuan (YOY-33%, including exchange loss of about 240 million yuan in 20 years, including donation of about 360 million yuan in 19 years); therefore, the company finally achieved a net profit margin of 23.07%, an increase of 2.47 pct over the same period in 2019, and continued to maintain good profitability. In addition, the company pays a dividend of 0.17 yuan per share (a total dividend of about 1.912 billion yuan), with a dividend ratio of 36.2%.

Packaging drinking water business: the market share of the industry may continue to improve to reflect the leading advantages, and continue to infiltrate multiple consumption scenarios to open up the growth space.

The sales income of the company's packaging drinking water business is 13.966 billion yuan (YOY-2.65%) in 2020, of which the company's packaging water business income is 7.102 billion yuan (YOY0.72%) in the first half of 2020 and 6.864 billion yuan (YOY-5.91%) in the second half of 2020.

We believe that the positive growth of the packaged drinking water business in the first half of 2020 reflects a strong must-have attribute and consumer awareness of the company's brand. In addition, although the company's packaged drinking water business declined in the second half of the year compared with the same period last year, it was mainly affected by floods caused by torrential rains in several Chinese provinces in July (affecting product transport sales at retail outlets & causing some retail outlets to be temporarily closed). We expect that with the elimination of these accidental disadvantages, we will continue to be optimistic that the company's packaging water business will resume good growth in 2021.

In addition, according to the company's annual report, the output of packaged water in the national beverage industry decreased by 10.44% in 2020. We believe that, compared with the annual performance of the company's packaging drinking water business and the industry situation, the company's market share in the field of packaging water may continue to increase, which further highlights the company as an industry leader to continue to achieve a "strong Hengqiang" competition pattern.

Profit forecast and investment advice.

We estimate that the total operating income of the company from 2021 to 2023 will be 270.09 plus 315.70 million yuan, the main business income will be 269.29 plus 31.482 billion yuan, and the return net profit will be 59.26 billion yuan and 67.99 billion yuan, respectively, and the corresponding EPS will be 0.53 percent, 0.60 percent, 0.70 yuan per share respectively.

(1) with reference to the PE valuation of comparable companies, we give the company a valuation range of 60-70 times PE (2021E), corresponding to a value range of 31.80-37.10 yuan per share.

(2) with reference to the DCF valuation method (FCFE discount), in which the Beta equity coefficient is 0.8681, the five-year treasury bond yield / risk-free interest rate is 3.053%, and the average annualized yield of Shanghai and Shenzhen 300 (000300.SH) in the past five years is 4.39% as the market average risk rate of return, then the corresponding risk premium is 1.34%, and the stock discount rate Ke is 4.22%.

In addition, the present value is calculated in two stages, with 2021-2030 as the first stage, followed by sustainable value. We give the company a sustainable growth rate of 1.25%. According to the valuation model of DCF (FCFE discount), the reasonable enterprise value of the company is 492.786 billion yuan, and the reasonable value per share is 43.82 yuan.

With comprehensive reference to the median under PE valuation (fair value range of RMB31.8037. 10RMB / share, corresponding to an average of RMB34.45RMB / share) and DCF valuation (fair value per share of RMB 43.82RMB), we believe that the value range of the company per share is RMB34.4543.82RMB / share. Based on the exchange rate of the Hong Kong dollar to RMB 0.84 on 07 April 2021, the reasonable value range of HK $41.01 to HK $52.17 per share continues to be rated as "better than the market".

Risk tips. (1) the decline of market demand, (2) the promotion of products is not as expected, (3) the fluctuation of raw material prices, (4) the problem of food safety.

The translation is provided by third-party software.


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