Zhongju Hi-tech (600872) Research Briefing: Continuously enriching categories and expanding channels, striving to achieve the “double hundred” goal
Incident: We recently went to Zhongju High-tech (600872) to conduct an investigation and exchanged views with the company on the company’s operating conditions.
Opinion: The performance of the third quarter report has maintained steady growth, and the core categories and core regions have maintained steady growth.
In the first three quarters of 2019, the company’s revenue and net profit attributable to mothers increased by 11 respectively.
6% and 12.
3%, Q3 revenue and net profit attributable to mothers increased by 14 respectively.
9% and 22.
In terms of products, the first three quarters of soy sauce, chicken powder, edible oil and other revenues increased by 9 respectively.
In terms of sales regions, revenue in the southern core region increased by 12.
3%, the eastern, central and western and northern regions increased by 11 respectively.
9%, 26% and 18.
Channels will continue to develop in the future.
In the future, the company will continue to promote the channel planning strategy of “steadily developing the southeast coast, focusing on enhancing the northeast and northeast, accelerating the development of the southwestern region, and gradually developing the northwest market”.
At present, the company has developed 275 sales channels in 337 prefectures and cities 天津夜网 across the country, with a development rate of 81%.
In the future, the development of blank prefecture-level cities and tertiary market districts and counties will be accelerated.
District and county coverage is currently less than 40%.
In the future, the focus will be on regional counties with dense populations and relatively good economic development.
The company is also actively deploying online channels and gradually opening up overseas markets.
In the third quarter, the number of the company’s dealers increased by 145, and the total number of dealers reached 1,009 at the end of the third quarter.
The number and continued growth of dealers in the future.
Continue to enrich categories and expand production capacity.
The company’s condiments currently include soy sauce, chicken powder, edible oil, etc., 深圳桑拿网 and their sales account for approximately 65%, 12%, and 9%, respectively.
In recent years, the company has launched oyster sauce, cooking wine, rice vinegar, sauces and other products.
In the future, the company will further improve the structure of soy sauce products.
In the first half of the year, we completed a new upgrade of light salt, small naughty low-salt soy sauce and seafood, and steamed fish flavor soy sauce, and completed the “2019-2023 Preliminary Product Development Plan” for other multi-category products.
The company mainly has two production bases in Zhongshan and Yangxi.
It is estimated that by 2020, the total production capacity of soy sauce will reach 60 tons, of which 40 inches in Yangxi and 20 inches in Zhongshan are expected.
In the next few years, the production capacity of oyster sauce, cooking wine, cooking oil, and chicken powder will be expanded.
Increase internal incentives to achieve the five-year “double hundred” goal.
The company has set a five-year “double hundred” goal, that is, by 2023, the revenue will reach 10 billion and the condiment production capacity will reach 100.
In order to achieve this goal in the future, the following main roads will be adopted: to further enrich product categories and expand production capacity; to continue to explore the national market and increase the number of dealers; increase sales staff with little or no other management staff; increase the core team’sexcitation.
This year, the salary and performance management system for core management personnel was improved.
The new system is aimed at the assessment of income, profit, and rate of return; it has set up progressive rewards, and bonus distribution has been shifted from the proportion of senior executives to the middle, the backbone of technology, and the lower.
Greater internal incentives are conducive to improving work enthusiasm and expanding the foundation for achieving the “double hundred” goal. Investment suggestion: The company’s 2019-2020 EPS is expected to be 0.
91 yuan and 1.
08 yuan, corresponding to PE and 51 times and 43 times.
The company’s condiment business will continue to expand its product structure and channel expansion, and its performance is expected to maintain steady growth, maintaining a prudent recommendation level.
Risk warnings: food safety issues, increased competition in the industry, etc.