Tianwei Food (603317) Third Quarterly Report Review: The performance of the previous September was in line with expectations
Brief comment on the performance On October 28, Tianwei Food disclosed the third quarter of 2019 results, and achieved revenue of 10 in the first nine months.
80,000 yuan, a growth of 24% in ten years, accounting for 59% of our annual revenue forecast (vs.
Revenue in the first three quarters of 2015-18 accounted for 59%), achieving net profit attributable to mothers1.
95 ppm, a year-on-year increase of 20%. Overall, the first three quarters of performance were in line with our expectations.
Segmented by product, Sichuan cuisine seasoning performed well and achieved revenue of 5 in the first three quarters.
100 million, an increase of 41% in ten years.
The sales scale of hotpot seasoning products in the first three quarters4.
900 million, an increase of 13% in ten years.
In the first three quarters of the two major categories, the total sales revenue increased by 26%, and in the first three quarters of the other products, the total revenue increased by 7%.
In terms of channel expansion, as of the end of the third quarter, 245 dealers were net added earlier, of which a net increase of 172 in the third quarter resulted in a faster chain expansion.
Divided by region, dealers in East China and Central China grew rapidly, with an early net increase of 98 and 53 dealers 天津夜网 respectively. Correspondingly, the sales revenue of East China and Central China increased by 1 point from the previous month, and the regional distribution continued to be optimized.
In the single quarter, the revenue in the third quarter increased by 15% each year, and the net profit increased by 2%, mainly due to the decline in gross profit due to product structure adjustment (down 4).
3 points) and the increase in sales expense ratio (an increase of 3 per year).
6 points) impact.
Considering that the third quarter is the off-season for hot pot product sales, combined with the accelerated expansion of distributors in the third quarter, and the receipt of advance invoices increased by 26% from the end of the second quarter, we think that distributors will actively prepare for the coming season of the fourth quarter.Contribute income.
Estimates and investment recommendations Based on the actual expense ratio in the first three quarters and the company’s indicators on marketing expenses, we slightly reduced the assumption of the expense ratio for 19-21, and obtained 19-21 EPS respectively as 0.
79 yuan / 0.
98 yuan / 1.
22 yuan, the increase is 4% / 4% / 4%.
We used the DCF method and used 9.
7% WACC (Industry average adjusted beta = 1.
1) and 1% perpetual expansion hypothesis, the ultimate price triggering Tianwei is this.
3 yuan, corresponding to the PE multiple of 19-21 years is 77x / 63X / 50X, maintaining the “overweight” level.
Combining the performance of the first three quarters, we are optimistic that the company will benefit from the further penetration of the large single product strategy and the expansion of channels in the short term. At the same time, we believe that the market has a certain premium for the replacement of consumer goods companies with sufficient development space.
Risk prompts 1) Channel expansion is less than expected; 2) New product promotion is less than expected; 3) Industry competition is intensified; 4) Raw materials and other costs are rising rapidly; 5) Food safety issues; 6) The construction progress of fundraising projects is less than expected.