This report is read as follows:
The company is the chicken company with the strongest attribute of consumer goods, and the proportion of ToC consumption has risen to 20.34% (+ 13.9%) in the past 20 years. The company focuses on R & D, laying channels, differentiating and building brands, and is optimistic that the brand power of strong products will bring high growth in the future.
Summary:
Give a rating of "overweight". It is estimated that the annual net profit in 21-22-23 is 2.96 / 4.28 / 577 million yuan and EPS is 0.21,0.31,0.41 yuan. Based on the rapid development of the company in the new retail channel, the company is given 18 times PE with a reasonable share price of RMB3.70, equivalent to HK $4.40 share price, covering for the first time and given an "overweight" rating.
The company has a steady business of raw chicken products to ensure a stable supply of quality; the company adopts an integrated "farm-to-table" model to effectively manage the whole process to ensure food safety; and to establish a cage system to raise new production capacity. By transforming 11 self-owned chicken farms into a cage system to increase the company's production capacity, it is expected that the cost-effectiveness will increase by 5.96%.
The company focuses on research and development, laying channels and building brands, and the whole food business is developing rapidly; the company began to develop deep food processing in 2017, and the business team has rich experience; the chairman of the company has more than 16 years of experience in enterprise and business management. and has 9 years of experience in the poultry industry, followed by senior experience and ability team in breeding, research and development, brand management and so on. 1) focus on R & D: the company has a competitive technology and R & D team, while the company has three research centers in Shandong, Shanghai and Tokyo to coordinate and interact with each other, focusing on the development of high-shape brands and constantly developing high-quality products; 2) spreading channels: radiating the whole world, covering the whole country, and infiltrating the whole network; new retail channels achieve leapfrog growth, new collection channels are bound to major customers, and new export channels seek diversified cooperation. 3) Multi-marketing casts brand influence: at present, the company has the basic brand "Fengxiang Food", consumption upgrading and health food brand "excellent shape", time-honored brand "five change Furnace" and so on.
It is optimistic that there is a broad space for poultry products and will continue to make efforts to adapt to the new channels in the future. with the changes in consumption scene, consumer population and lifestyle, it is expected that the scale of China's poultry deep processing market will continue to grow steadily at a compound growth rate of 20.1% in the next five years. At the same time, complying with the consumption trend to diversify products and channels, the proportion of the company's ToC business has increased significantly to 20.34% in 2020. In the future, the development of ToC channels is expected to enter the fast lane, and it will also be the main growth point of the company in the future. At the same time, the convenience store industry has maintained rapid growth, and new demand has gradually emerged.
Risk hints: epidemic disease risk, product price fluctuation, raw material price fluctuation