Orient Securities: Gave Yanghe shares a buy rating with a target price of 203.52 yuan

2021-10-27Fast Securities Co., Ltd. Ye Shuhuai, Cai Qi conducted a study on Yanghe shares and released a research report "21Q3 deduction of non-profit stable growth, optimistic about the next year's revenue acceleration", this report gave a buy rating to Yanghe shares, believing that its target price is 203.52 yuan, the current stock price is 179.61 yuan, and the expected increase is 13.31%.

Yanghe Shares (002304)

The company announced the third quarter of 21, 21 years of the first three quarters of the realization of revenue of 21.942 billion yuan (yoy + 16.0%), attributable net profit of 7.213 billion yuan (yoy + 0.4%), deduction of non-attributable net profit of 6.850 billion yuan (yoy + 21.6%); of which 21Q3 achieved revenue of 6.399 billion yuan (yoy +16.7%), net profit attributable to the mother of 1.551 billion yuan (yoy -13.1%), deduction of non-attributable net profit of 1.682 billion yuan (yoy+). 22.9%)。 21Q3 Attributable net profit declined, mainly due to a loss in net income from fair value changes, excluding steady growth in non-profit.

Core ideas

The expansion of dual products led to steady growth, and the balance of contract liabilities increased brightly. The company's 21Q3 revenue increased by 16.7% and 25.5% respectively compared with 20Q3 and 19Q3, which is expected to benefit mainly from: 1) In June, the company launched a 100-day offensive to promote the acceleration of payment collection, which was better than the same period last year; 2) After the adjustment, the current channel inventory recovered benignly, the prices of the sea, the sky and the dream disk were steadily rising, the channel profits were higher, and the dealer thrust was stronger; 3) the epidemic situation in Nanjing and other places in the province was controlled in time, the consumption scenes such as banquets rebounded, and the terminal sales in the Mid-Autumn Peak Season were expected to increase year-on-year; 4) Benefiting from the sub-high-end expansion, M6+ growth rate is higher, 21Q3 is expected to be above 30%, M3 crystal version continues to replace the old M3, Haitian is expected to be flat or slightly growing, the overall structure is upgraded, and the ton price is upward; 5) Shuanggou liquor industry is promoting the revival of famous wines, and is expected to contribute incrementally. In different regions, the market outside the province of 21Q3 is less affected by the epidemic, and the growth rate is expected to be higher than that of the province. At the end of 21Q3, the balance of contract liabilities was 6.51 billion yuan, +18.0% month-on-month and +68.3% year-on-year, which is expected to effectively support the release of subsequent performance.

Gross profit margin increased steadily, and the profitability of the main business improved year-on-year. 21Q3 Gross margin of 76.15% (yoy +2.98pct), is expected to mainly benefit from structural upgrades; gross margin in the first three quarters reached 74.93% (yoy +1.73pct). 21Q3 Selling expense ratio 13.48% (yoy-4.49pct), management expense ratio 6.64% (yoy-1.56pct), taxes and surcharges accounted for 18.89% of revenue (yoy+5.72pct). Comprehensive, 21Q3 net profit margin after deduction of non-attributable to the mother reached 26.29% (yoy+1.34pct), and the profitability of the main business improved.

Dual-brand upgrade to enhance profit elasticity, optimistic about 22 years of growth rate improvement. The new version of Sky Blue is expected to contribute to growth, and the upgrade of Ocean Blue is steadily advancing; the M6+/M3 crystal version has a higher growth rate and increased profit elasticity. After the channel adjustment, the current inventory is reasonable, the profit is higher, and the thrust is strengthened. After the equity incentive landed, the company's operation vitality is sufficient, and under the impetus of the rapid expansion of the sub-high-end, it is optimistic about the company's 22-year performance growth rate.

Financial Forecasts and Investment Recommendations: Revenue increases, lower expense ratios and net income on changes in fair value are forecasted to be $5.03, 6.36 and $7.71 per share for 21-23 years (originally forecasts were $5.59, 6.71 and $7.72). Combined with comparable companies, 32 times PE for 22 years, with a target price of 203.52 yuan, maintaining a buy rating.

Risk Warning: The progress of expansion outside the province is slow, consumer demand is less than expected, and food safety incidents are at risk.

A total of 33 institutions have given ratings in the last 90 days, with 28 buy ratings and 5 overweight ratings; the average target price of institutions in the past 90 days has been 223.19; the Valuation Analysis Tool of Securities Star shows that Yanghe Shares (002304) good company rating is 3.5 stars, good price rating is 3 stars, and valuation comprehensive rating is 3 stars.