Brokerage Rating: Three Major Index Shocks Nine shares ushered in a golden opportunity

The leader of the domestic seed industry, the comprehensive development of the business, the industry boom + genetically modified land to meet the growth point.

Investment essentials

The leader of the domestic comprehensive seed industry, "endogenous development + epitaxial mergers and acquisitions" to achieve steady growth The company is the largest seed enterprise in China, inheriting the spirit of Longping, comprehensively covering rice, corn, vegetables, melons and fruits, wheat, sunflowers, miscellaneous grains and other seeds. In 2016, after CITIC Group became the owner, the company opened endogenous development + epitaxial mergers and acquisitions, absorbed domestic high-quality seed industry resources, and opened up the Brazilian market. The company's performance is driven by rice + corn two-wheel drive, and revenue in 2020 accounts for 72% of the total. In 2020, the company came out of the industry downturn and achieved a net profit attributable to the mother of 116 million yuan, turning losses into profits and ushering in a growth inflection point.

Fundamental improvement superimposed policy catalyzed, the seed industry ushered in the upward cycle of the seed industry market size of 119.2 billion yuan, in recent years the decline in demand + product homogenization affected the development of the industry. In 2021, the industry ushered in an upward cycle, supply and demand, hybrid corn supply contraction, high price + low inventory + strong demand is expected to drive corn seeds upwards; policy- aspects, the revitalization of the seed industry is comprehensively promoted, the threshold for variety approval is raised, the seed industry is encouraged to innovate, the license infringement is cracked down, and the genetically modified products are accelerated.

Commercial breeding capacity + genetically modified technology reserves or promote sustained growth of the company's rice and corn market share in 2020 is 9.8% and 3.7%, respectively, ranking first, and the scale advantage is expected to be maintained. The company has a stable high-quality scientific research team, and the breeding system is perfect. In the past three years, the company's R&D investment accounted for more than 10% of operating income, and the cumulative R&D expenditure was 1.2 billion yuan, leading the industry. The company's Longping Biology and Hangzhou Ruifeng transgenic technology reserves are abundant, and in the future, they may harvest genetically modified dividends through seed sales + trait transfer.

Earnings forecasts and valuations

We expect the company's rice business to remain stable, the corn business to usher in growth, vegetables, melons and fruits business to grow steadily, 2021-2023 revenue of 37.68, 44.06 and 5.426 billion yuan, net profit attributable to the mother of 1.25, 1.70, 337 million yuan, corresponding PE 209, 154, 78 times, respectively. We believe that the company, as a leader in the seed industry, benefits from the advantage of comprehensive business + first mover, as well as the favorable environment of seed industry revitalization + GM commercialization, and for the first time covers the "overweight" rating.

Risk Warning

Extreme weather and pests and diseases affected product sales less than expected, and GMos landed less than expected.

Shede Wine (600702): Rapid growth in performance in 2021 Performance flexibility is expected to continue in 2022

Category: Company Institution: Guosen Securities Co., Ltd. Researcher: Chen Qingqing/Yilin Li Date: 2022-01-19

Matters:

On January 18, the company issued a pre-increase announcement for 2021 annual results, and the company's revenue in 2021 is expected to be about 4.948 billion yuan (+83%); the net profit attributable to the mother is 1.23 to 1.28 billion yuan (+112~121%); the net profit deducted from the non-attributable to the mother is 1.19 to 1.24 billion yuan (+116~125%); non-recurring profit and loss has no significant impact on the company's performance pre-increase.

Guosen food and beverage views: 1) 2021Q4 Willing and Tuopai go hand in hand to promote the rapid growth of revenue, due to the impact of expense recognition on the profit margin has declined in the short term; 2) the sales momentum is not reduced, inventory and price plate and sales performance is benign, the 2022 Spring Festival opening red sales are expected to continue to grow high; 3) Looking forward to 2022, under the support of the potential energy of the Shede brand and the accelerated revival of the Tuo brand, the company's performance elasticity is expected to continue to be released; 4) Investment advice: Optimistic that the company will continue to enjoy the sub-high-end wine upgrade and expansion dividend, Under the support of the old wine strategy, the growth potential of the brand is still sufficient. Combined with the company's performance forecast guidelines, considering the company's cost launch rhythm under the national expansion in recent years, we slightly adjusted the previous profit forecast, maintaining the company's operating income assumption of 49.6/68.3/8.65 billion yuan for 2021-2023, and slightly reducing the net profit attributable to the mother to 12.6/18.9/2.55 billion yuan (a decrease of about 9%/8%/5%), corresponding to a diluted EPS of 3.74/5.61/7.59 yuan (previously, 4.13/6.09/7.97). Yuan), the current stock price corresponds to PE of 55/36/27x, maintaining a "Buy" rating.

comments:

2021Q4 Shede and Tuopai go hand in hand to promote the rapid growth of revenue, due to the short-term decline in profit margins due to the impact of expense recognition In 2021, the company expects revenue to be 4.95 billion yuan (+83%); net profit attributable to the mother of 1.23 billion yuan to 1.28 billion yuan (+112~121%); and net profit deducted from non-attributable to the mother of 1.19 to 1.24 billion yuan (+116 to 125%). According to estimates, 2021Q4 is expected to be revenue of 1.34 billion yuan, an increase of about 42.6% year-on-year; attributable net profit of 260 million to 310 million yuan, year-on-year -3.7% ~ +14.8% (the hub is 290 million yuan, corresponding to the growth rate of 5.6%); deduction of non-attributable net profit of 230 million to 280 million yuan, year-on-year -11.4% ~ +7.8% (hub is 260 million yuan, corresponding to the growth rate of -1.8%), mainly due to the normalization of the epidemic, the high-end liquor consumption market has picked up significantly, The company's old wine strategy has gradually been accepted by the market, and the Shede and Tuopai brands have achieved good growth, and we expect that in 2021, the Shede and Tuopai series will increase by about 100% year-on-year. It is estimated that the company's net profit margin attributable to the mother in 2021 is 24.9 to 25.9%, year-on-year + 3.4 to 4.4pct; of which the 2021Q4 attributable net interest rate is 19.4 ~ 23.2%, year-on-year -9.3pct ~ -5.6pct (the hub is 21.3%, year-on-year -7.5pct), the net profit margin year-on-year decline is expected to be mainly related to the recognition of sales expenses in the fourth quarter of 2021, we believe that short-term fluctuations do not change the long-term upward trend, and it is expected that the future sales expense ratio will gradually decline.

Sales momentum does not decrease, inventory and price plate and dynamic sales performance benign, 2022 Spring Festival opening red sales are expected to continue high growth combined with channel feedback, dealers in the 3rd quarter in advance to complete the annual payment collection task, from October 2021 the company on the taste of willing, swallowing and other high-end products to take measures to control goods, inventory further digested to a lower level, channel price plate can also be stabilized, such as Sichuan base camp taste willing to stand at the batch price of 360 yuan, terminal transaction price of 380 yuan, the future is expected to stand on the 400 yuan price band. In 2022, the company's sales target is positive, the Spring Festival opening channel is lightly loaded, the dealer is benign, and it is expected that the proportion of spring festival opening red payment is about 40%, which is expected to lay a good foundation for high growth in annual performance.

Looking forward to 2022, under the support of the rising potential of the Shede brand and the accelerated rejuvenation of the Tuopai brand, the company's performance elasticity is expected to continue to release the stability of the company's current core management, the strategic goal is clear, the strategic determination and execution are strong, the channel value chain has been reshaped, the endogenous operation has gradually entered a positive cycle, and it is expected to fully enjoy the upgrading and expansion dividends of sub-high-end liquor. The company has the gene of famous wine, the strategy of old wine further strengthens brand differentiation and cost performance, the current brand sales atmosphere has risen, the brand and channels have formed a certain potential energy, and the external dividend superposition endogenous improvement is expected to boost the company's performance to continue to grow at a high level.

Investment advice: Optimistic that the company continues to enjoy the sub-high-end wine upgrade expansion dividend, the brand growth potential is still sufficient under the support of the old wine strategy, maintain the "buy" rating combined with the company's performance forecast guidelines, considering the company's cost delivery rhythm under the national expansion in recent years, we slightly adjusted the previous profit forecast, maintaining the company's operating income assumption for 2021-2023 is 49.6/68.3/86.5 billion yuan, slightly lowering the net profit attributable to the mother assumption to 12.6/18.9/2.55 billion yuan (down by about 9%/ 8%/5%), corresponding to a diluted EPS of 3.74/5.61/7.59 yuan (previous value was 4.13/6.09/7.97 yuan), the current stock price corresponding to PE of 55/36/27x, maintaining a "buy" rating.

Macroeconomic risks; the national promotion of medium and high-end products is less than expected.

Blum Oriental (601339): 21-year performance exceeded expectations High cotton prices are expected to continue 22 years of performance can be expected

Category: Company Institution: CITIC Construction Investment Securities Co., Ltd. Researcher: Ye Le Date: 2022-01-19

event

The company issued a pre-increase announcement for 2021 performance: it is expected that the company will achieve a net profit attributable to the mother of 1.33-1.39 billion yuan in 2021, an increase of 263% -280% year-on-year, and achieve a net profit of 1.28-1.34 billion yuan, an increase of 346% -367% year-on-year.

Among them, it is expected that the company's net profit attributable to the parent in the Q4 single quarter will be 540-600 million yuan, an increase of 188%-220% year-on-year, and the net profit after deduction of non-attributable net profit will be 530-590 million yuan, an increase of 245%-284% year-on-year.

Brief comment on

The rise in cotton prices coupled with the recovery of Vietnam's production capacity, Q4 performance significantly exceeded expectations. 1) Production end, 22Q3 company's Vietnam base (Blum Vietnam has a production capacity of 1 million spindles, accounting for 60%), affected by the epidemic closure, the output reduction accounts for about 8% of the total output, according to the calculation of Q3 Vietnam base operating rate of about 60%-70%; after October with the relaxation of epidemic control in Vietnam, it is expected that the production capacity of Vietnam base will recover to 90%. 2) Price side, Q4 domestic and foreign average price continued to rise, China Cotton Price Index (325), international cotton index M single-quarter average price were 21,993 yuan / ton, 126 cents / pound, +52% year-on-year, +59%, 2021 annual average price year-on-year +38%, +42%, at the highest level in the past decade, the company uses cost-plus pricing method, product prices have been adjusted according to market supply and demand and cost. 3) Cost side, benefiting from the company's overseas procurement advantages and low-cost cotton inventory, the cost side advantages are highlighted.

The company relies on product innovation, stable supply, cost and other advantages, and its market share has increased for a long time.

Color spinning downstream is mainly fast fashion, sports fashion knitted products, downstream demand presents small batches, multi-variety, fast reaction and other characteristics, the company as a production capacity diversified layout of the global color spinning leading suppliers, the advantages are:

1. The company's product-side innovation ability is leading, the company invests a lot in color, material, process technology and other research and development (annual research and development costs of more than 100 million, accounting for about 2% of revenue), and constantly introduces new products that conform to market trends; at the same time, product quality and supply are stable, and the rapid response and flexible production capacity of the manufacturing end are outstanding. The company's largest customer is one of the world's largest vertically integrated knitwear manufacturers, the main end customers include NIKE, UNIQLO, ADIDAS, PUMA, etc., in 2020, the company's sales to the first major customer is 1.61 billion yuan, accounting for 26.3%;

2. The cost side of the company has obvious advantages, on the one hand, the fixed investment scale of color spinning yarn is larger, and the order scale is small, the category is more, the head enterprise can obtain the scale effect through a large number of orders and production, reduce the unit production cost; on the other hand, 60% of the company's production capacity is located in the Vietnam base, raw material procurement can make full use of global cotton resources, procurement of low-cost raw materials (international cotton prices are lower than the domestic cotton price of about 1000-2000 yuan / ton), while the Vietnamese base in taxation, labor costs and other aspects of advantages, The company's overall gross profit margin and net profit margin level remained in the range of 15%-20% and 5%-10% respectively, which was at the leading level in the industry.

3. From the perspective of the industry pattern, the production capacity of the head enterprise Huafu Fashion and Blum Oriental Color Spinning is 2 million and 1.7 million spindles respectively, with a total market share of about 40%, and the production capacity is concentrated, with the company's production capacity increase, the market share gradually increases. The company's Vietnam base capacity continues to be built, and the company intends to raise 1 billion yuan in non-public issuance of shares for the expansion of 390,000 spindle yarn projects in Blum Vietnam, and it is expected that 200,000 new production capacity will be released every year from 2022 to 2023, driving the company's growth.

Looking forward to the pattern of cotton supply and demand in 2022, it is expected to continue the trend in 2021, the foreign pattern is tighter than that of domestic, and cotton prices are expected to run at a high level. According to the December assessment of the USDA 2021/22 (2021.9-2022.8) global cotton supply and demand balance, it is expected that the global cotton supply and demand pattern in 2021/22 will tighten, and global production and consumption are expected to increase by 1.67 million and 1.88 million tons, with a difference of 210,000 tons, and the opening and ending inventories decreased by 2.36 or 2.57 million tons; by country, the United States and India are tightening compared with the previous year, and China and Brazil are generally moderate, showing the same trend from the perspective of the Treasury-consumption ratio.

The domestic apparel manufacturing end maintained a boom, and the pattern of cotton supply and demand tightened to boost cotton prices. In 2021, the price of cotton increased from 15,000 yuan / ton at the beginning of the year to 22,000 yuan / ton, as of January 18, 2022, the cotton 328 price index was 22,600 yuan / ton, year-on-year +48%; on the demand side, due to the increase in demand for clothing after the epidemic, the Xinjiang cotton incident catalyzed the domestic clothing brand terminal to maintain a high prosperity (2021M1-11 China's yarn and cloth production was +10.1% and +8.5% year-on-year), while the intensification of the overseas epidemic led to a large increase in domestic textile and clothing exports (2021M1-11) (2021M1-11 China's yarn and cloth production was +10.1% and +8.5% year-on-year), while the intensification of the overseas epidemic led to a large increase in domestic textile and clothing exports ( 2021M1-11 garment export amount +25% year-on-year), supply side, in 2021 due to Xinjiang's long spring low temperature time, summer local stage drought and other climatic factors, 2021 national cotton output of 5.73 million tons, year-on-year -3.0%, 2021M1-11 cotton imports of 2.01 million tons, +12% year-on-year.

Benefiting from the increase in cotton prices in the short to medium term, the company's earnings are expected to remain elastic in 2022. In 2021, affected by the increase in cotton costs (raw materials account for about 60%-70% of operating costs), the company's yarn products raised prices (the company is expected to increase the tonnage price by 18% in 2021), benefiting from the company's raw material procurement structure optimization, low-priced cotton inventory, etc., as of the end of 21Q3, the company's raw material inventory book balance was 2.44 billion yuan, if the inventory is calculated according to the current cotton price of about 150,000-170,000 tons, the inventory is more than 6 months, it is expected that there will be a large price difference compared with the current cotton price, and continue to contribute to 2022 Annual profit.

Profit forecast: We assume that the company's yarn unit price changes by 16.0%, 12.0%, -5.0% year-on-year, sales volume changes of 10.0%, 10.0%, 11.0%, and unit costs of -2.5%, 12.4%, and 0.1% year-on-year; it is expected that the company's operating income in 2021-2023 will be 77.8, 95.5 and 10.09 billion yuan, respectively, an increase of 26.8%, 22.8% and 5.6% year-on-year. The net profit attributable to the mother was 1.36, 1.52 and 1.14 billion yuan respectively, an increase of 270.3%, 11.9% and -25.0% year-on-year, corresponding to PE of 7.4x, 7.2x and 9.6x, which was covered for the first time and gave an "overweight" rating.

Risk warning: fluctuations in raw material prices; less than expected in capacity construction and release; fluctuations in customers.

Zijin Mining (601899): Accelerating growth towards a new journey

Category: Company Institution: CITIC Construction Investment Securities Co., Ltd. Researcher: Huang Wentao/Wang Jiechao/Li Musen Date:2022-01-19

Net profit attributable to shareholders of listed companies was 15.6 billion yuan, a year-on-year increase of 139.67% On January 16, 2022, Zijin Mining issued a performance forecast saying that it is expected to achieve a net profit attributable to shareholders of listed companies of about 15.6 billion yuan in 2021, an increase of about 139.67% year-on-year; it is expected to achieve a net profit attributable to shareholders of listed companies of about 14.5 billion yuan in 2021, an increase of about 129.36% year-on-year.

Full release of production capacity, the main mineral products volume and price rise

In 2021, Zijin Mining seized the good opportunities in the metal market, fully released production capacity, and the volume and price of the main mineral products rose together, and the main economic indicators hit a record high.

1) Volume: The annual output was: mineral gold 47.5 tons, an increase of 7 tons, an increase of 17.28%; mineral copper 584,000 tons (including Kamoa copper industry equity output of 42,000 tons), an increase of 131,000 tons, an increase of 28.92%; mineral zinc (lead) 434,000 tons, an increase of 56,000 tons, an increase of 14.81%; mineral silver 309 tons, an increase of 10 tons, a growth rate of 3.34%; iron ore concentrate 4.248 million tons (including Mapeng iron ore rights and interests of 908,000 tons). ), an increase of 376,000 tons, an increase of 9.71%.

2) Price: During the operating period, the sales price of the company's mineral copper, mineral zinc, mineral silver and iron concentrate increased year-on-year, and the sales price of mineral gold decreased.

3) Pursuant to the underwriting agreement between the Group and Kamoa Copper, a subsidiary of Kamoa Holdings of the Group, Kingsoft Hong Kong, a subsidiary of the Group, underwrittens kamoa Copper's mineral copper in accordance with a certain proportion, and some of the inventory at the end of the period has not been sold outside the Group, which has offset the net profit attributable to the shareholders of the listed company in the reporting period of about 400 million yuan.

The net profit attributable to the mother in the fourth quarter increased sharply year-on-year, and the release of mineral products was accelerated month-on-month according to the split calculation of the first three quarters and the same period of the year, and the net profit attributable to the mother in the fourth quarter was about 4.3 billion yuan, an increase of 121.6% year-on-year. In the fourth quarter, the output of mineral gold was 13.1 tons, an increase of 18.2% year-on-year; the mineral copper was 176,000 tons, an increase of 63.2%; the mineral zinc (lead) was 149,000 tons, an increase of 10.8%; the mineral silver was 75.1 tons, down 7.3% year-on-year; the iron ore concentrate was 1.454 million tons, an increase of 10.2% year-on-year, and the output of mineral products in the fourth quarter was higher than that in the third quarter, indicating that the company's output accelerated the release of the company's output month-on-month.

The three world-class copper mines have all been completed and put into operation, and the company's three world-class copper projects in the Democratic Republic of the Congo (Kinshasa) Kamoa-Kakula Copper Mine Phase I, the upper belt of the Peggy Copper-Gold Mine in Serbia, and the first phase of the Tibet Julong Copper Mine will all be completed and put into operation in 2021. thereinto:

1) Kamoa-Kakula Phase I sequence 3.8 million tons / year of the full production capacity of 200,000 tons of copper / year, after the completion and operation in May 2021, the production capacity exceeded expectations, the output of more than 100,000 tons of copper in 2021; 2) Serbia Peji copper and gold mine upper belt mining and dressing project designed to process 3.3 million tons of ore per year, trial production in June 2021 and gradually achieve formal operation, 2021 production plan is 50,000 tons of copper, gold containing 3 tons;

3) The ore processing system of the first phase of the Julong Copper Industry Dragon Copper Mine began to be officially put into production on December 27, achieving the overall goal of being completed and put into operation by the end of 2021, with a daily processing capacity of 150,000 tons / day after production in the first phase, with an annual output of about 160,000 tons of copper, which will become one of the largest copper mines in China.

Taking advantage of the victory and chasing the north, the 2022 goal will be accelerated again

In 2021, Zijin Mining became one of the companies with the largest growth in mineral copper in the world, and in 2022, the company's main product planning indicators are 60 tons of mineral gold (an increase of about 125,000 tons), 860,000 tons of mineral copper (an increase of about 276,000 tons), 480,000 tons of mineral zinc (lead) (an increase of about 46,000 tons), 310 tons of mineral silver (an increase of about 1 ton), 3.2 million tons of iron concentrate (down about 1.048 million tons), and mineral copper production has entered an explosive growth stage.

At the same time, the company continued to build projects, expand copper mineral energy, Kamoa -Kakula Phase I and Second Sequence 3.8 million tons / year plant construction exceeded the plan, is expected to be completed and put into operation in the second quarter of 2022, earlier than the original plan of the third quarter, reproducing the purple gold speed. After the first phase of the second series of 3.8 million tons / year beneficiation project is put into operation, the kamoa-Kakula copper concentrate will double from the current 200,000 tons / year to 400,000 tons / year, according to Ivanhoe's production guidelines, the 2022 production guidelines for the Kamoa-Kakula copper mine are 290,000-340,000 tons of copper metal. With the previous experience, the phase I and II sequence projects are expected to achieve full production in 2023, coupled with the new production capacity of the Julong Copper Mine and the Serbian project, the company's copper concentrate operating capacity in 2023 is expected to be close to one million tons.

Cut into the new energy track and build a new field increment

The company has captured the changes in the global industry, quickly cut into the new energy and new materials industry track, promoted major transformations, and built a new incremental field. On October 8, 2021, the Company entered into an Arrangement Agreement with New Lithium Canada to acquire a 100% stake in New Lithium for C$960 million (approximately RMB4.939 billion), which was approved by new lithium shareholders and the Ontario High Court in December 2021. The core asset of New Lithium is the 3Q Lithium Salt Lake Project in Argentina, with excellent resource endowments, with a total resource of approximately 7.565 million tonnes of lithium carbonate equivalent (400 mg/L of lithium ion concentration) and a high-grade lithium carbonate equivalent resource of 1.845 million tonnes (800 mg/L of lithium ion concentration cut-off). The project is one of the largest and highest-grade lithium salt lake projects in the same kind of project, with large resources, high grade and low impurities, good project development conditions, mature lithium extraction process and low cost. The project will start construction after obtaining the EIA permit, and is currently planning to produce 20,000 tons of battery-grade lithium carbonate per year, using evaporation technology, it is expected to expand production capacity to 40,000-60,000 tons / year, with the conditions for building a world-class large-scale salt lake base.

Investment advice

It is expected that the company's net profit attributable to the mother in 2021-2023 will be 15.61 billion yuan, 21.34 billion yuan and 24.18 billion yuan respectively, and the PE corresponding to the current stock price will be 16.6 times, 12.1 times and 10.7 times respectively, taking into account the company's industry position and future growth, maintaining the company's "buy" rating.

The progress of mining projects has fallen short of expectations; global economic growth has declined, commodity demand has fallen, and copper prices have fallen; and central banks in major economies have raised interest rates more than expected, resulting in lower copper and gold prices.

Lushang Development (600223): The results of transformation and great health have begun to appear, and the battle investment has accelerated brand building

Category: Company Institution: Huaan Securities Co., Ltd. Researcher: Wang Hongyan Date: 2022-01-20

Differentiated competitive advantages are highlighted, and the brand power drives the circle-breaking company's Freda Pharmaceutical Group to have excellent skin care brands such as Dr. Yinger and Yilian, and the product strength is recognized by consumers. Among them, Dr. Yao'er focuses on micro-ecological skin care, conquers seaweed fermentation technology, and the new ingredient brown algae enzyme is bacteriostatic and has strong antioxidant properties. The unique micro-ecological skin care positioning and good efficacy have improved customer stickiness, and in July 2020, Dr. Yaer was selected as one of the TOP8 in the "GROW Category Health List" released by Tmall FMCG and Ali Data. Yilian focuses on hyaluronic acid skin care, and the spray single product has become the champion of the 2021 Double Eleven Whole Net Hyaluronic Acid Hydrating Spray category. As of the end of Q3 2021, 2021Q1 ~ Q3, the cosmetics sector achieved operating income of 993 million yuan, a substantial increase year-on-year, cosmetics business is expected to become a new performance growth point for the company.

The successful introduction of war investment, brand voice can be expected to improve

In November 2021, the company introduced strategic investors, and the consortium composed of 5 companies, including Guangxi Tencent Venture and Hangzhou Zhongdayuan, increased its capital by 738 million yuan, and the total shareholding ratio after the completion of the capital increase was 16.90%. Among them, Guangxi Tencent Venture and Hangzhou Zhongdayuan are subsidiaries of Tencent and OneNet, respectively. OneNet Has rich experience in generation operation, and has successfully operated cosmetics brands such as Baijiling, OLAY, P&G, arden and so on. The company is expected to use its excellent generation operation capabilities to empower the company's existing and subsequent new brands, and achieve a win-win situation of product incubation and online sales expression.

The new brand Baifu was released, and the raw material business is expected to expand rapidly

In 2019, the company acquired the focus of Freda, expanded the raw material business, opened up the company's raw material end and brand end, and realized the coordinated development of the whole industry chain. Focus Freda is currently based on cosmetic grade and food grade hyaluronic acid, and the annual production capacity of hyaluronic acid raw materials is 420 tons, ranking second in the world. In addition, the company established the Baifu new brand in early 2022, and simultaneously launched three new raw materials of cosmetic grade sodium hyaluronate, rejuvenating small molecules and ergothioin. With the introduction of new raw materials with high added value such as ergothioin, the company's raw material business is expected to maintain rapid expansion.

The company positions itself as a leading comprehensive operator of the big health industry in China, and implements a two-wheel drive strategy in the two major sectors of ecological health industry and biomedicine. The real estate development business is mainly stable, and the proportion of non-real estate business has increased, of which the cosmetics business has performed prominently. Dr. Yaer and Yilian, who specialize in micro-ecological skin care, have gradually achieved circle-breaking volume. After the introduction of war investment by Freda Biology, the participation of online generation operations such as OneNet One Chuang is expected to empower the company's brand marketing end and accelerate the brand incubation of the company's cosmetics business. We expect the company's EPS from 2021 to 2023 to be 0.74, 0.90 and 1.11 yuan per share, respectively, corresponding to the current stock price PE of 18, 15 and 12 times, respectively. First coverage, giving a "Buy" rating.

The promotion of new products is less than expected; industry competition is intensifying; and the epidemic is repeated.

Alcoholics (000799): 2021 ends beautifully

Category: Company Institution: Huaxi Securities Co., Ltd. Researcher: Kou Xing Date: 2022-01-20

Event overview

The company released a performance forecast, and it is expected that the revenue in 2021 will be about 3.4 billion yuan, which is about +86% year-on-year; the net profit attributable to the mother in 2021 will be 880-950 million yuan, +79% -94% year-on-year. 4Q21 Revenue was about 760 million yuan, +8.8% year-on-year; net profit attributable to the mother was 160-230 million yuan, a year-on-year -0.6%-43%.

Analytical decisions:

1. The performance was slightly higher than we expected. Previously, we expected the company's revenue to be 3.33 billion yuan and net profit attributable to the mother to be 900 million yuan in 2021. Judging from the performance forecast, the revenue is slightly higher than we expected, and the net profit range center is slightly higher than we expected.

2. The overall sales rhythm in 2021 will move forward. According to the forecast revenue, the proportion of Q1/Q2/Q3/Q4 revenue in the whole year is about 27%, 24%, 27% and 22% respectively, which is different from the previous high proportion of Q4 revenue. On the one hand, it is the result of the company's active adjustment in line with the industry conditions, on the other hand, it also reflects the improvement of the company's relative channel customer discourse power. Compared with the quarterly revenue laws of Wuliangye and Fenjiu, we judge that there is still room for further adjustment.

3. Throughout the year, the high-end meets expectations, and the sub-high-end exceeds expectations. Although the company has not yet disclosed the annual revenue by product, we judged that the annual high-end wine internal ginseng revenue has achieved rapid growth in line with expectations in combination with the situation in the first half of the year and the third quarter, and the annual revenue is expected to reach a volume level of about 1 billion yuan, and it is expected that in 2022, it will continue to promote rapid sales growth through "strong base, breakthrough highland, and deep nationalization". Although the revenue of the 2020 liquor series has been formed by the impact of the epidemic to form a low base, the revenue growth for the whole year of 2021 is still beyond the earlier market expectations, and we judge that the annual revenue of 2021 is close to the volume level of 2 billion yuan, of which the contribution outside the province is greater. In 2020, the company sorted out the product structure of the liquor series, promoted the price increase of the product to improve the channel profit, and was sought after by distributor customers in 2021, while the company solidly promoted the coverage of the national prefecture-level cities, and the sub-high-end liquor market in 2021 was driven by the demand of the banquet (postponed to 2021 due to the epidemic in 2020), and the overall performance of the industry was good, promoting the liquor series to achieve unexpected growth. We expect the alcoholic beverage series to return to a reasonable and faster growth range in 2022.

4. It is expected that the profitability of Q4 will rise steadily. Q4 Attributable net interest rate is expected to be 21%-30%. Due to the forward pace of sales, Q3 has recognized some of the relevant sales staff bonuses and other expenses synchronously, and it is expected that the proportion of Q4 internal reference revenue has increased, and it is expected that the overall profitability of Q4 companies will increase steadily compared with the same period last year.

Adjusted the profit forecast based on the performance forecast, the revenue for 2021-23 is 34/46.8/6.12 billion yuan, the net profit attributable to the mother is 9.2/13.5/1.81 billion yuan, and the EPS is 2.83/4.16/5.57 yuan. Previously, it was expected that the revenue for 2021-23 would be 3.34/46.8/6.26 billion yuan and the net profit attributable to the mother would be 9/13.5/1.83 billion yuan. 2022/1/18 The closing price of 184.9 yuan corresponds to 65/44/33 times the P/E for 2021-23, respectively, reaffirming the buy rating.

Risk warning: the expansion of the market outside the province is not as expected; Food safety issues, etc.

Bafang Shares (603489) performance express report in line with expectations: electric bicycle continues to boom, and the profit margin of the bulk price increase is under pressure

Category: Company Institution: Soochow Securities Co., Ltd. Researcher: Zeng Duohong/ Chai Jiahui / Xie Zhedong Date: 2022-01-20

The 2021 forecast profit of +49~54% is in line with our expectations. The company released the 2021 performance express, the net profit attributable to the mother in 2021 was 600 million to 620 million yuan, +49.1 to 54.1% year-on-year, and the net profit after deduction of non-attributable to the mother was 550 million to 570 million yuan, +47.6 to 53.0% year-on-year. In terms of quarterly, the net profit attributable to the mother in 2021Q4 was 166 million to 186 million yuan, +72.9 to 93.8% year-on-year, and +32.8 to 48.8% quarter-on-quarter, and the performance forecast was in line with our expectations.

The epidemic has changed the way travel is changed, the demand for overseas electric bicycles is growing highly, and the domestic market has begun to rise. 1) Overseas, the global demand for electric bicycles is high: according to CONEBI, in 2020, European electric bicycle sales will be about 5.1 million, an increase of more than 50% year-on-year; The U.S. market sold 500,000-600,000 units, doubling year-on-year; The Japanese market grew steadily. Since entering 2021, the overall demand for overseas motorcycles has been in a rapid growth trend, and we expect that global demand can still reach a growth rate of more than 30% in 2021. 2) On the domestic side, including traditional electric two-wheeler companies such as Yadi and Emma, began to enter or lay out electric bicycle products, while shared bicycle manufacturers such as Hello also began to lay out shared electric bicycles, which are currently in mass production, driving the domestic market to start.

In 2021, overseas demand will increase, shared customer volume, and products will switch to high-end mid-motor, and 2021Q4 will continue to maintain high kinetic energy. We estimate that the company's overall revenue will maintain rapid growth in 2021, mainly from: 1) the high demand for overseas electric bicycles and the increase in European market share. Bafang has stronger supply capacity and increased customer stickiness than foreign counterparts, and at the same time, after the normalization of the epidemic in 2021, the company will gradually send more employees abroad to promote new product development; Take advantage of the local employee advantages of subsidiaries in the Netherlands, Poland, the United States and other subsidiaries + set up a new set to cover three service companies in Italy, Denmark and France to ensure responsiveness, brand value and service quality; 2021Q4 The company's overseas business we estimate to reach 460-520 million yuan of revenue volume; 2) Domestic business 2021Q4 continues to increase, the increase is mainly from Bafang Tianjin, that is, the company's main subsidiaries for the domestic market such as shared cars, but it is estimated that the gross profit margin of this sector is currently low.

Industry demand is good + supply-side pressure is reduced, and revenue is expected to continue to grow well in 2022. Looking forward to 2022, the penetration rate of electric scooters in the mainstream market in Europe still has a large room for improvement, the North American market penetration trend has just begun and is expected to maintain a high growth, and the domestic market shared cars have driven demand growth. From the supply side, with the resumption of the core parts project of the Malaysian electric bicycle + the Shimano Singapore plant put into operation in early 2022, the shortage of supply in the electric bicycle industry chain is expected to be greatly alleviated. In 2022, global e-bike production and sales are expected to maintain rapid growth, accelerate the development of octagonal customers, and increase production capacity synchronously, which is expected to maintain rapid growth.

2021Q4 profit increased sequentially, we expect the company's profitability to improve, 2021Q1-3 raw material pressure is high, from 2022 is expected to gradually recover. 2021Q1-3 Gross margin of 34.26%, down 10.30pct year-on-year, 2021Q4 attributable net profit / deduction of non-attributable net profit have increased, we expect 2021Q4 profitability to recover month-on-month, profitability is expected to improve in 2022, from: 1) product structure changes, high-end mid-mounted motor and other high gross margin products increased, while the company has moved into a new factory at the end of September 2021, with the new plant capacity climbing + continuously tackling technical difficulties, The profitability of the company will be repaired; 2) Under the background of rising prices of motor raw materials such as copper, rare earths, chips, etc., the company used strong management capabilities to actively respond, first of all, through price adjustment to hedge a part of the impact, we expect that the positive impact of the company's price increase strategy will be reflected in the 2021Q4 part; At the same time, the company directly docked with the original chip factory + determine the chip backup scheme to ensure the company's product supply capacity, and gradually improve the stickiness of downstream customers.

Profit forecast and investment advice: Considering the company's high barriers, high growth and high profitability, we basically maintain the company's net profit attributable to the mother in 2021-23 of 607 million yuan, 977 million yuan and 1.365 billion yuan, respectively, +51%, +61% and +40% year-on-year, corresponding to the current pee of 45.65x, 28.36x, 20.29x, giving a target price of 308.56 yuan, corresponding to 38 times PE in 2022, maintaining a "buy" rating.

Risk warning: competition is intensifying, policies are falling short of expectations, etc

Dongpeng Beverage (605499): Channel Expansion + Product Expansion Profits continue to grow rapidly

Category: Company Institution: BOCI Securities Co., Ltd. Researcher: Weiliang Tang Date: 2022-01-20

Event: The Company discloses its 2021 annual results forecast. It is expected to achieve a net profit attributable to the mother of 1.15 to 1.25 billion yuan in 2021, an increase of 41.6% to 53.9% year-on-year, and a net profit of 1.05 to 1.15 billion yuan, an increase of 30.5% to 42.9% year-on-year. Net profit attributable to the mother in the fourth quarter alone was 150 million to 250 million yuan, an increase of 43% to 135% year-on-year.

Points to support the rating

Channel expansion increases the market rate, and product expansion expands the breadth of consumers. Profits continued to grow rapidly in 2021, with Q4 results accelerating sequentially. (1) In 2021, the company's net profit attributable to the mother is expected to increase by 41.6% to 53.9%, and we believe that the company's channel expansion + product expansion strategy has begun to show results. In terms of channels, the company has intensively cultivated in the mature market in Guangdong and continued to expand the market outside the province, and we judge that the revenue of the market outside the province has maintained rapid growth throughout the year, and the proportion has increased. In terms of products, on the one hand, the company continues to invest in the energy drink track and seize the share, on the other hand, it actively builds an "energy +" product line to meet the needs of different scenarios and crowds and broaden the breadth of consumers. We judge that energy drink revenue for the whole year has grown steadily, and non-energy drinks have improved in the second half of the year. (2) The net profit in the fourth quarter was +43% to +135% year-on-year, which was accelerated compared with the second and third quarters, and the non-net profit was -20% to +76% year-on-year. We judge that energy drinks maintain rapid growth, non-energy drink new products bring increases, and non-recurring profit and loss contribute more, thus driving rapid growth in Q4.

Outlook: Functional beverages are still the main line of development, and the market outside the province and non-energy beverages have brought new growth curves. (1) The scale of the energy beverage industry has grown steadily, and the main competitors are still affected by trademark disputes, releasing a certain growth space for other competitors. The company's products have a differentiated competitive advantage, and the continuous release of 500ml gold bottles + new products to broaden the consumer population will provide support for performance growth. (2) The national market has a large space for growth, is still in the pioneering stage, the company actively layout in products, channels, supply chain, brand building, etc., is expected to continue the rapid growth momentum in the market outside the province.

Valuation

According to the performance forecast, we adjusted our previous profit forecast, and expected eps to be 3.00, 3.80 and 4.67 yuan in 21-23, +47.6%, +26.7% and +23.0% year-on-year. The energy beverage market space is still vast, we are optimistic about the company's channel expansion + product expansion development route, combined with the current valuation level, to maintain the overweight rating.

The main risks faced by the rating

The promotion of new products and market development are less than expected, and the competition in the industry is intensifying.