1. The company's main products chicken powder, chicken essence belongs to the compound seasoning industry, broad space for development. From the development trend of China's condiment industry, the production and sales of a single condiment in the industry shows a downward trend, and the compound seasoning achieves sustained and rapid growth by virtue of the characteristics of "natural, nutritious and healthy". According to the estimation of the industry association, China's composite seasoning industry has a scale of about 45 billion, and its CAGR is as high as 30%, 40% in recent years, which is the fastest growing and highest growing sub-industry in the condiment industry in China. The company's main products chicken powder and chicken essence are compound seasonings, compared with monosodium glutamate, it has better fresh function and more natural and healthy characteristics. According to the report of China condiment Association, the per capita annual consumption of chicken essence and chicken powder in some economically developed areas of China is 2.7kg, and the annual per capita consumption in rural market is still less than 0.2kg, which is far lower than that of developed countries, so there is a broad space for the development of chicken powder and chicken powder industry in China. At present, the company has a comprehensive market share of 7% in the chicken powder and chicken essence industry, ranking third in the industry.

two。 The company's products follow the differentiation strategy, and constantly optimize the product structure. According to the report and analysis of the China seasoning Association, at present, the demand proportion of China's chicken essence and chicken powder high-grade, middle-grade and low-grade catering industry is about 3:5:2, so the company has established a differentiated product competition strategy. adopt the price policy of "mid-range price, medium-and high-grade quality". In addition, the company also actively adjusts the product structure and price system, constantly enriches the product category and quantity, and divides the products into three product levels: medium-and low-grade, medium-and high-grade, and high-grade to meet different market needs. In recent years, the company can cultivate more than 2 new products every year, gradually break the company's dependence on chicken essence and chicken powder products, achieve product diversification, and ensure the sustained growth of the company's revenue. 1H2014, the company launched Jialong popular celebration chicken powder, wife cooking chicken essence and other new products. Through the channel grass-roots research, we found that the mobile sales of the new product market terminal is good, which can lead the company to achieve rapid revenue growth; in addition, the Guangzhou Jialong sauce production base project invested by the company with super-raised funds is expected to be put into production by the end of this year, when the company's product structure will be further optimized.

3. The company continues to improve the channel system, increase brand promotion, and promote the rapid growth of 2Q14 revenue. In the past, the company has always paid more attention to the construction of catering channels, which is the main source of income for the company, especially in Jilin, Liaoning, Beijing, Henan and other regions. The company's market share in medium and high-grade catering can be as high as 70%. In recent years, the company began to pay more and more attention to the development of household consumption and food manufacturing market. Through the strategies of accelerating the construction of super channels for non-staple foodstuffs and setting up a major customer department to serve food manufacturing enterprises, the company can achieve income growth in household consumption and food manufacturing market, and increase the company's market share. In addition, the company pays more and more attention to brand promotion and publicity. 1H14 has strengthened channel distribution and product promotion and publicity efforts, and achieved good results. In the second quarter, the company achieved revenue of 110 million yuan, an increase of 61.0% over the same period last year, and a net profit of 16.22 million yuan, an increase of 26.2% over the same period last year. We judge that the business performance of the company is gradually improving, and the inflection points of revenue and performance appear.

4. The company currently has more than 100 million cash, in the context of the concentration of the entire condiment industry and M & An integration, we judge that the probability of M & An is high.

5. Profit forecast and valuation. We are optimistic about the future development prospects of the chicken essence and chicken powder industry. As the number one national brand in the industry, the company has a clear strategy in terms of brands, products and channels. With the gradual release of new production capacity and the appearance of economies of scale, the company's revenue and profit inflection points appear, and will achieve rapid growth in the future. Considering the possible acquisitions, we estimate that the company's 2014-2016 revenue will be 360 million, 560 million and 950 million respectively, CARG will be 62.4%, and CAGR will be 0.16,0.33 and 0.57 yuan respectively, and CAGR will be 89%. Due to the company's small market capitalization and strong growth, the company will be given a purchase rating corresponding to the target price of 14.85 yuan in 2015.