Huang Shanghuang (002695) Annual Report Commentary: High-income points for expansion of income outside the province to stimulate the release of vitality

Huang Shanghuang (002695) Annual Report Commentary: High-income points for expansion of income outside the province to stimulate the release of vitality

Event: Huang Shanghuang released the 2018 annual report: the company achieved revenue in 201818.

98 ppm, an increase of 28 in ten years.

41%, net profit attributable to mother 1.

73 ppm, an increase of 22 in ten years.

72%, net of non-attributed net profit1.

6 billion, an annual increase of 20.

01%, of which Q4 achieved revenue of 4.

43 ppm, an increase of 28 in ten years.

29%, net profit attributable to mothers was 4.12 million yuan, a year-on-year decrease of 78.

23%, attributable to non-net profit of -1.49 million yuan, down 109 for many years.

27%, mainly due to Q4 one-time provision of equity incentive expenses of 34.52 million yuan.

The profit distribution plan announced by the company: It is planned to pay 0 for every 10 shares.

82 yuan, the dividend rate is 24.

37%.

The company’s operating plan announced in 2019: It is expected to achieve revenue of 2.2 billion yuan in 2019, a year-on-year increase of 15% and net profit2.

1 ‰, a 20% increase over ten years, and an expected net interest rate of 9.

55%, an increase of 0 from 2018.

18 points.

Investment Highlights: Revenue Analysis: The development of out-of-province stores and high-potential energy stores has resulted in high revenue growth.

The company achieved revenue of 18 in 2018.

98 yuan, an annual increase of 28.

41% (where Q1: +23.

39%; second quarter: +46.

67%; third quarter: +12.

51%; fourth quarter: +28.

29%), mainly due to the company’s expansion of stores outside the province, especially the development of high-potential energy stores such as airports, high-speed rail, commercial complexes, and promoted the continuous growth of sales revenue.

1) High growth in two core categories.

In terms of categories, fresh goods achieved revenue14.

30,000 yuan, an increase of 26 in ten years.

50% (11 ppm for poultry meat products, an increase of 39% per year for livestock products1.

9 trillion, down 10% a year, the other 1.

2 ‰, an increase of 6 in ten years.

54%), rice products 3.

51 ppm, an increase of 29 in ten years.

97%, the average value of fresh goods and rice products business achieved a high growth of 25% +; 2) volume and price breakdown: meat products volume and price rose, rice products sales increased.

Meat products increased by 25% +, of which the volume increased by 17%, and the price increased by 8%; rice products increased by 30%, of which the volume increased by 35%, and the price decreased by 4%; 3) Sub-regions: the expansion outside the base camp contributed a high growth rate.

In terms of different regions, the company’s base camps in Jiangxi and Zhejiang have revenue growth rates of 20% +. Fujian, Liaoning, Guangxi and other emerging markets have faster income growth rates of 40% to 100%. Expansion outside the base camp area is company revenueContribution to high growth rate; 4) Financial indicators are in a normal state: the company’s cash receipts growth rate in 2018 was 22%, which was lower than the income growth rate of 28%, of which Q4 cash receipts growth rate was 14%, which greatly exceeded the income growth rate of 28%,We expect stocking during the Spring Festival to give dealers a certain accounting period; advance receipts increase by 73%, showing a high growth rate in 2018Q1, and we expect it to be due to the Spring Festival; inventory growth is 19%, which is at a historically normal level.

Profit analysis: The one-off amortization of fair incentive expenses caused distortion in Q4 profit growth.Net profit attributable to the mother in 20181.

73 yuan, an annual increase of 22.

72% (where Q1: +42.

91%; second quarter: +41.

98%; third quarter: +30.

68%; Q4: -78.

23%), Q4 growth distortion is mainly due to one-time provision of equity incentive expenses of 3452 million, if we replace this part of the amortization, we estimate that Q4 net profit attributable to the parent is 31.73 million yuan, an increase of more than 68%Interest rate calculation).

Gross profit margin in 2018 was 34.

47%, unchanged from the previous year. The company launched a raw material strategy on prices, effectively alleviating the pressure of high raw material costs in the first three quarters; the sales expense ratio was 12.

65%, a slight increase from last year, mainly because the company strengthened its marketing model transformation and upgrade in 2018. It used vertical marketing, emotional marketing, takeaway, and stalls to build a three-dimensional marketing effort, which led to an increase in advertising costs.

Future prospects: The development of stores outside the province and high potential energy will continue to advance, and the company will continue to release its vitality under the new frontier and equity incentives.

In 2019, the company is expected to achieve 22 trillion revenues, an annual increase of 15%, and net profit2.

1 ‰, a 20% increase over ten years, and an expected net interest rate of 9.

55%, an increase of 0 from 2018.

18 points.

1) Revenue: The company continues to promote the four strategic plans, increase the development of markets outside the province and the development of high-potential energy stores such as high-speed rail, expressways, airports, and CBD. It is expected that the 北京桑拿洗浴保健 company’s fresh goods business and rice products business are expected to continue to grow;End: The company continues to strengthen the management of raw material strategic reserves and supply chain management, and the gross profit margin is expected to continue to increase; 3) The release of equity incentive vitality: In 2017, the founder Ms. Xu Guifen stepped down as chairman and her son Chu Jun took over as chairman.He has worked in the company since 1997 and is familiar and motivated.

In the second year after taking office, that is, in 2018, an equity incentive plan was launched to motivate executives, core managers and technical personnel. Performance evaluation was attributed to net profit (substitute incentive costs). The growth rate of performance in 2018-2021 was 25%, 20%, 33%, and 15%, which are faster than previous 合肥夜网 years, and have achieved performance targets in 2018.

Earnings forecast and investment rating: Upgrade to “Buy” rating.

It is expected that EPS for 2019-2021 will be 0.

43 yuan, 0.

52 yuan, 0.

62 yuan, corresponding PE is 29X, 24X, 20X.

The company’s expansion outside the province and high potential energy stores continued to advance. Under the new vertical and equity incentives, the company’s vitality continued to be released, and the company was upgraded to a “buy” rating.

Risk reminders: food safety risks; risks of raw material price fluctuations; uncertainty about Huitong’s food industry integration; new products fail to meet expectations; production capacity construction falls short of expectations.