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澳优(01717.HK):市场需求面临挑战 研发助推新品

Australian Excellence (01717.HK): Market demand is facing challenges, R&D boosts new products

興業證券 ·  Aug 30, 2022 20:36  · Researches

Main points of investment

The company's operating performance in the first half of the year: in the first half of 2022, the company recorded operating income of 3.66 billion yuan, down 15.1% compared with the same period in 2021; the company adjusted its sales strategy to provide more support and discounts to distributors, which put some pressure on the company's performance. In the first half of 2022, the company achieved a net profit of 220 million yuan, a sharp drop of 62.9% compared with 2020.

Under the dual pressure of birth rate and epidemic prevention and control, the demand for formula is facing challenges: in the first half of 2022, the birth rate in mainland China continued to decline, while outbreaks occurred frequently, and strict control measures were implemented in some cities. Industry-wide sales of infant formula fell 4.0% from the same period last year. From the company's point of view, due to macro factors and the resistance of the company's sales channel adjustment, the revenue of brand formula milk powder decreased by 37.6% to 1.28 billion yuan compared with the same period last year; affected by the shortage of infant powder and mother powder, the revenue of brand formula goat milk powder decreased by 1.5% to 1.67 billion yuan compared with the same period last year; due to the recovery in overseas markets, sales of "private brands" and other businesses increased by 30.1% to 600 million yuan in the first half of 2022. In addition, benefiting from the launch of a series of new products such as "Little Orange Box", the company's nutrition business revenue increased by 15.4% to 80 million yuan in the first half of 2022 compared with the same period last year.

The market competition was fierce, and the interest rate fell sharply: in the face of fierce market competition, the company adopted profit concessions and assistance to distributors, resulting in a year-on-year drop in gross profit margin of 3.0pcts to 47.1% during the reporting period. The company strives to increase advertising and marketing spending to further increase market share. During the reporting period, the sales expense rate increased by 4.2pcts to 30.3% compared with the same period last year; the management expense rate increased by 2.7pcts to 10.5% year-on-year; and the company's parent net interest rate fell by 7.9pcts to 6.1% during the reporting period.

The scientific research output consolidates the product moat and contributes to the realization of the "Golden decade": in the first half of 2022, the Group carried out more than 120 scientific research projects, among which "screening of probiotic strains from southern milk and construction of resource bank" was officially recognized as "a new breakthrough in the research gap". During the reporting period, Jia Beit passed the CRAS certification, and one of its patents won the "China Patent Excellence Award", which contributed to the realization of the strategic goal of "Jia Beit = goat milk powder pronoun". In addition, the product that was approved to add MP108 Lactobacillus rhamnosus in 2021 became the main growth driver of its business line performance, marking the continuous improvement of the company's scientific research capability. During the reporting period, the company launched three new products of milk formula and "Zhishu" special medical food, realizing a major upgrade of the product structure. As of August 30, 2022, the company's share price was 14.4 times PE (TTM).

Risk tips: food safety problems; more than expected fierce market competition; the impact of the epidemic exceeded expectations.

The translation is provided by third-party software.


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