Summary of the report:
Event: from January to September 2015, the company achieved operating income of 1.176 billion yuan, an increase of 13.96% over the same period last year; the net profit attributed to the owner of the parent company was 60.4695 million yuan, down 14.34% EPS 0.095 yuan from the same period last year, and the weighted average return on net assets was 3.42%.
Revenue growth accelerated in the third quarter, and profits may gradually recover: Q1, Q2 and Q3 achieved operating income of 438 million yuan, 294 million yuan and 444 million yuan respectively, up-2.00%, 10.82% and 38.84% over the same period last year. Q1, Q2 and Q3 achieved net profits of 23.9527 million yuan,-30400 yuan and 40.8703 million yuan respectively, up-26.32%,-100.04% and 34.83% respectively over the same period last year. In the first half of the year, the company increased its advertising investment in new products, terminal promotion and support for newly developed distributors, resulting in a sharp increase in sales expenses. the company reasonably controlled the sales expenses in the third quarter, and the sales expenses were 51.2785 million yuan, a decrease of 3.91% over the same period last year. The month-on-month decrease was 39.09%. The gross profit margin in the third quarter was 31.14%, down 1.14% from the same period last year, mainly due to the commissioning of the production base in Nanchang, Jiangxi, and the current capacity utilization rate is not high.
The share of revenue from new products is expected to rise to 50% in the next 3-5 years: in terms of products, old products are seeking breakthroughs. New products such as matcha, fruits and vegetables, and oatmeal sesame paste are launched for young consumers. The market performance of the new products is good after the introduction of black sesame milk and black milk. The company will continue to launch new products, and the revenue share of new products is expected to rise to 50% within 3-5 years. The Chuzhou production base of black sesame milk invested by the company will be completed in September 2017. black sesame milk is a plant protein beverage mainly launched by the company in recent years, which effectively complements the deficiency of traditional black sesame paste in edible convenience. After the base is fully put into production, it is expected to produce 150000 tons of black sesame milk every year, with an additional operating income of 1.1 billion yuan and a net profit of 110 million yuan.
Jinghe rice selenium-rich food is expected to maintain 20-30% growth: relying on the excellent management ability of listed companies, the company has provided favorable support to Jinghe rice industry in terms of liquidity financing, operation and management, marketing, etc., and is expected to achieve revenue of about 400 million yuan for the whole year. With the further integration of the company's marketing, it is expected to maintain 20-30% growth in the next three years.
Profit forecast and investment rating: from 2016 to 2018, the EPS is expected to be 0.29,0.36,0.42 yuan respectively, corresponding to 26 times, 22 times and 19 times of PE, respectively, maintaining the company's "overweight" rating.
Risk hints: food safety risks and intensified competition in the industry
