(Report Producer/Author: Huaxin Securities Wan Rong)
1.1 Company Profile
The predecessor of the company was established in Dalian in 1994, in 2015 completed the share reform to establish a joint-stock enterprise, in 2016 listed on the national small and medium-sized enterprise share transfer system, is the national key leading enterprise in agricultural industrialization, the national high-tech enterprise, the national edible mushroom processing technology research and development sub-center, the national agricultural product processing industry demonstration center, the vice president unit of the China Algae Industry Association, is the national standard gb 2760 edible mushrooms and algae part of the application revision, the main business is marine food and edible mushroom food and other ready-to-eat appetizer cold dishes research and development, Production and sales, the main brands include "Gaishi", "Mountain Zhenyuan", "Northern Spring", "Gaishixiang", the main product seasoned wakame was rated as a famous brand product in Liaoning Province, "Gaishi" trademark was identified as a famous trademark in Liaoning Province, and the largest customer in recent years was Haidilao.
Enjoy Food is the largest shareholder of the company, holding 53.01% of the shares, Gai Quanhong holds 99.9% of its equity, while holding 8.38% of the company, a total of 61.34% of the company's shares, as the company's controlling shareholder. The company's shareholding ratio is concentrated, and the shareholding structure is relatively simple.
1.2 The main business composition of the company
At present, the company has obtained a series of quality system certifications at home and abroad such as the European Union, Japan, the United States, etc., and the marine food and edible mushroom food produced are exported to More than a dozen countries and regions such as Japan, the United States, Canada, Germany, Spain, Ukraine, Australia, Singapore, Israel, Russia and so on.
Products can be divided into algae, fungi, wild vegetables, fish roe and sea treasure series according to the attributes, in 2020, algae, fungi, wild vegetables, fish roe and sea treasure series revenue accounted for 46.50%, 18.51%, 6.37% and 20.73% respectively, the proportion of algae products is relatively stable, fish roe products grow rapidly, has successfully surpassed the fungi to become the company's second largest product category.
According to the processing method, the company's products can be divided into condiments, frozen products, dry products and salts.
In the first half of 2021, the company's condiment, frozen, dry and salted revenue accounted for 93.41%, 2.57%, 2.32% and 1.67% respectively, and the proportion of condiment sales increased year by year, from 78.01% in 2017 to 15.32pct to 93.41%.
From 2018 to 2021q3, the company's operating income growth rate was 39.64%, 20.79%, -4.70% and 50.24%, and the net profit growth rate was 177.18%, 57.41%, -14.14% and 61.41%, the overall growth was volatile, and the poor performance in 2020 was mainly caused by multiple factors such as the serious epidemic situation overseas, changes in the type structure of income products and the appreciation of rmb in export business.
3.1 China's appetizer and cold vegetable industry continues to develop rapidly
Appetizers are an important part of Chinese cuisine, which has a long history in China and belongs to traditional industries, mainly in the form of stalls, shops, cabinets or catering.
After the reform and opening up, due to the development of China's market economy, the enterprises with cold vegetables have ushered in unprecedented development opportunities, and the market scale has expanded rapidly.
In terms of product development, through continuous innovation, the product variety is increasingly rich; in terms of sales scale, through the development of recent years, the sales amount of China's meal and cold vegetable production enterprises has increased rapidly, and the entire industry market has a large market size. However, compared with foreign mature markets, China's food and cold vegetable industry is still in a period of rapid growth.
With the rapid expansion of the industry's consumption objects and the continuous introduction of new products, China's food and cold vegetable industry will usher in a good opportunity for development in the next few years.
3.1.1 Changes in residents' consumption habits have led to an increase in demand for appetizers and cold dishes
According to the data of the National Bureau of Statistics, China's urbanization rate has reached 60.60% in 2020, and according to the development experience of international developed countries, after the urbanization rate exceeds 50%, the consumption categories and behaviors of residents will also undergo a major change.
In the past, the household consumption of urban and rural residents in China was mainly based on rice, noodles and their products, with the increase in the income of domestic residents, the per capita disposable income increased, the living standard was significantly improved, the proportion of meat, aquatic products and vegetables has increased, people's consumption habits have undergone tremendous changes, and the demand for food for quick consumption of cold dishes is increasing.
In the future, with the frequency of residents eating out and the proportion of fast-consuming food in food expenditure is getting higher and higher, the cold dishes with meals in daily life are not limited to the scope of use of family meals, but also become side dishes and daily leisure foods in hotels and canteens.
3.1.2 The demand for appetizers and cold dishes in catering enterprises has increased
Cold vegetables are ready-to-eat foods, and the microbial index control in the production process and subsequent transportation and preservation is directly related to the major problem of food safety, and the difficulty of cold vegetable production is actually greater than that of hot dishes.
With the rise in labor costs and venue rents, as well as the improvement of people's requirements for food safety and food taste, Chinese large-scale chain restaurants have gradually reduced or stopped making appetizers and cold dishes, and have been processed and distributed by professional cold vegetable enterprises to ensure product quality and taste stability.
Compared with their own processing of appetizers, large-scale catering chain enterprises have significant advantages in uniformly purchasing appetizers. The main raw materials of appetizing cold vegetables are agricultural and sideline products, which are susceptible to natural conditions, market supply and demand and other factors, and there is a certain degree of volatility in prices, which will affect the production costs and profitability of cold vegetable processing enterprises.
Professional cold vegetable processing enterprises purchase raw materials in batches, have stronger bargaining power in the procurement of raw materials, logistics and transportation, the scale effect is obvious, and the cost of raw materials is lower; the raw material turnover of cold vegetable processing enterprises is better than that of a single restaurant, the refrigeration and logistics transportation are more secure, and the ingredients are fresher and safer; the standardized production process of professional cold vegetable processing enterprises can ensure the stable taste of dishes.
In addition, the unified procurement model can reduce the number of personnel required for the back kitchen of the restaurant chain enterprises, avoid the special cold dish operation room, and avoid the cumbersome food processing process while reducing costs.
More importantly, cold vegetable processing enterprises can effectively avoid the food safety risks caused by the manual dispersion of cold dishes in catering stores, which are easy to exceed the standard and even poison.
At present, the rate of restaurant chaining in China is still very low, far lower than that of developed countries such as the United States, which is also a huge incremental market.
Under the influence of the Matthew effect, in the future, as the market size of large-scale catering chain enterprises becomes larger and larger, the demand for cold dishes will also become higher and higher.
In addition, benefiting from the rapid development of the mobile Internet, the catering takeaway market has grown rapidly, and the relevant data of the China Commercial Industry Research Institute show that from 2014 to 2018, the scale of the takeaway market grew to 441.5 billion yuan with a compound growth rate of 132.15%, and it is expected that the scale of the takeaway market will reach 934 billion yuan in 2021. The share of cold vegetable food relying on the rapid development of takeaway has been further enhanced.
3.1.3 Industry concentration is expected to further increase
Due to the low entry threshold of the appetizer cold vegetable processing industry, the large number of subjects, the serious homogenization of products, and the fierce competition, this makes the overall gross profit margin level of the industry low.
In the future, with the increase of national supervision of safety and environmental protection and the continuous improvement of consumer requirements for food safety and hygiene, the industry will further adjust and differentiate, and competition will become more intense. Appetizer cold vegetable industry will further develop to high-end, branding, industrialization, some high-quality appetizer processing enterprises can use its advantages in brand, research and development, large-scale procurement, large-scale production and sales channels, etc., reduce procurement costs, improve management efficiency, develop high-end products, in order to continuously improve the level of profits and industry competitiveness.
The gap between enterprises' development level will be further widened, industry integration will continue to emerge, and industry concentration will be further improved.
3.2 The company uses its own advantages to enhance market competitiveness
3.2.1 Abundant resources and enjoy the effect of industrial agglomeration
The company is located in Dalian City, Liaoning Province. Dalian is the window and the largest port city in northeast China, the financial center of the Liaoning coastal economic belt, the shipping logistics center, and the northeast Asian international shipping center, not only has a rich, high-quality and stable slippery mushroom, wakame and northeast mountain wild vegetable resources, but also can enjoy the spillover effect of brand, technology and human resources brought by the industrial agglomeration area, which is conducive to enhancing market competitiveness and consolidating the company's market position.
3.2.2 Advantages of production technology
Through independent research and development, the company introduces overseas teams to digest and recreate foreign advanced technologies. At the same time, with Dalian Polytechnic University, the Agricultural Products Processing Technology Research and Development Center of the Ministry of Agriculture, the Liaoning Academy of Agricultural Sciences and other scientific research institutes for production, education and research cooperation, the establishment of a joint research and development center, the formation of a series of unique core technologies, optimize the production process, improve efficiency at the same time, reduce production costs, but also make product quality in the leading position in the industry.
3.2.3 Channel and Brand Advantages
The company mainly engaged in algae, fungi, wild vegetables, caviar sea treasures and other four series of customized products, 300+ kinds of products, 1000 + sku, and make full use of the domestic and foreign markets, with advanced production technology, high-quality products, quality services to win the trust of many well-known large-scale chain catering and food production enterprises at home and abroad, maintaining a long-term and stable cooperative relationship.
Internationally, the company has more than 20 countries and regions around the world Japanese food products sales channels, are the local countries are very well-known sellers. Consumers and channel providers have formed a certain understanding of the company's brand, and the company's brand has also gained a certain degree of popularity.
In China, the rapid development of major customer businesses such as Haidilao and Anjing Food has also brought a good driving force and performance growth guarantee to the company's future development.
3.2.4 Raise funds to help the company expand its competitive advantage
The company intends to use the raised funds of 100 million yuan to build an annual output of 10,000 tons of edible mushrooms and vegetables frozen seasoning food project in lianshui County Economic Development Zone, Huai'an City, Jiangsu Province.
It is reported that the project edible mushroom seasoning frozen product design capacity of 6000 tons / year, mainly including seasoned frozen apricot abalone mushrooms, frozen enoki mushrooms, frozen bisporus mushrooms, frozen crab flavor mushrooms, etc.; vegetable seasoning frozen product design capacity of 4000 tons / year, mainly including seasoned frozen lotus root, seasoned frozen kale soybeans, etc.
With the help of the implementation of the fundraising project, we can make full use of the advantages of edible mushroom resources in Jiangsu Province and its surrounding broad market advantages, effectively shorten the transportation radius of raw materials, reduce transportation costs, optimize the layout of production capacity, better expand the markets in South China, East China and Central China, continuously improve the company's overall production capacity and market share, and further consolidate and expand competitive advantages.
We predict that the company's net profit attributable to shareholders of listed companies in 2021-2023 will be 0.33, 0.44 and 0.57 billion yuan, corresponding to eps of 0.38, 0.52 and 0.67 yuan respectively, and the current stock price will correspond to pe of 36.7, 27.1 and 21.0 times, respectively.
Economic downturn, food safety risks, excessive concentration of customers, the progress of fundraising projects does not meet expectations, exchange rate fluctuations, the risk of large fluctuations in raw material prices, etc.
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