Performance summary: in 2020, the company achieved operating income of 2.2 billion yuan, an increase of 12.1% over the same period last year, and its net profit was 250 million yuan, an increase of 12.2% over the same period last year.
The company's revenue and profits are growing steadily and its leading position is stable. The company's net profit after deducting non-return for the whole year was 240 million yuan, an increase of 14.1% over the same period last year. During the reporting period, the company expanded sales channels, increased the distribution of large chain supermarkets, upgraded brand packaging, and optimized production processes so that the revenue of the main products Flammulina velutipes reached 1.63 billion yuan, and the gross profit margin increased by 1.5% over last year; at the same time, the production capacity of Pleurotus eryngii and Pleurotus ostreatus was gradually released, the overall production and sales of edible fungi increased, and the product matrix became increasingly rich.
The national layout of the production base is accompanied by the common development of many varieties of edible fungi, and the company actively cultivates new profit growth points.
The company has completed the strategic layout of the seven production bases of Shanghai, Dujiangyan, Jilin Changchun, Shandong Dezhou, Guangdong Huizhou, Guizhou Bijie and Gansu Lintao, and basically built Thailand production bases abroad. In terms of sales, the company's sales team and dealers are all over most provinces, municipalities and autonomous regions except Taiwan; the layout of sales channels in second-and third-tier cities is sinking, and the sales network has radiated and even penetrated the whole country. The company will continue to implement the national layout strategy in the next few years, further improve the variety and diversity production layout of the above seven bases, and cultivate new profit growth points of the company. The company announced in October 2020 the "preliminary Plan for the issuance of stocks to specific targets on the growth Enterprise Market in 2020", with a total amount of no more than 2.25 billion yuan to be raised by issuing stocks to no more than 35 specific objects. this investment project will increase the daily production capacity of Flammulina velutipes and Pleurotus eryngii, further strengthen and consolidate the market share of Flammulina velutipes and Pleurotus eryngii, and then grasp the market initiative and enhance the voice of market pricing.
The epidemic forced the change of the sales model, and the company ushered in new opportunities. At the beginning of 2020, affected by the epidemic, a large area of catering business was closed, some farmers' markets were closed and the logistics was not smooth, which had a great impact on the traditional channels. However, the company has made great efforts to expand channels such as Shang Chao and online fresh e-commerce to achieve substantial growth in online scale, while using a variety of social media to strengthen brand promotion. We believe that in the case of the impact of the epidemic, the company has effectively responded to the impact of the epidemic and found a new direction for the company's continued development in the future.
The pattern leads the industry, enters the harvest time. Throughout the development process of the company, the company began to implement the national layout strategy in 2009. At present, the company has seven major production bases. We believe that on the one hand, the company will continue to increase the market share of the domestic edible mushroom market by virtue of the advantages of cost, channel and brand, and on the other hand, on the strategic level, the company will gradually extend from national strategy to globalization, and it is expected to take Thailand as the starting point in the future. radiate neighboring Southeast Asian countries. We believe that the company's strategic pattern has always been ahead of the industry, the layout will enter the harvest period, and the company's edible fungus gross profit margin is expected to increase significantly in the next few years.
Profit forecast and investment advice. It is estimated that the EPS from 2021 to 2023 is 0.62,0.68,0.77 yuan respectively, and the corresponding dynamic PE is twice as much as that in 17-15-13. With reference to the industry's average PE of 21 times in 2021, the company is given a target price of 13.02 yuan for 21 times PE, in 2021, maintaining a "buy" rating.
Risk tips: intensified market competition, the company's product sales may not meet expectations and so on.