Qianhe Flavor Industry (603027) 2018 Annual Report Review: Performance Meets Expected Capacity, Pipeline, Double Expansion and Development Foundation

Qianhe Flavor Industry (603027) 2018 Annual Report Review: Performance Meets Expected Capacity, Pipeline, Double Expansion and Development Foundation

I. Overview of the event Qianhe Flavor released the 2018 annual report, and the company achieved total operating income of 10 in 2018.

65 ppm, an increase of 12 in ten years.


Realize net profit attributable to shareholders of listed companies2.

40 ppm, a 66-year increase of 66.


It is planned to allocate cash for every 10 shares2.

21 yuan (including tax).

Second, the analysis and judgment of performance are in line with expectations, Q4 revenue maintained a high growth rate, and profit growth rate significantly increased the company’s total operating income in 201810.

65 ppm, an increase of 12 in ten years.

37%, equivalent to Q4 single-quarter operating income3.

1.9 billion, previously +23.

59%, slightly higher than the third quarter of 2018, but still maintains a high growth rate.

Initial realization of net profit attributable to shareholders of listed companies2.

40 ppm, a 66-year increase of 66.

61%, equivalent to Q4 single quarter net profit attributable to listed companies.

660,000 yuan, at least +67.

30%, a significant increase from the 18Q2-Q3 chain.

Generally speaking, the company’s 18-year performance is in line with expectations, of which operating income is in line with the expectations in our previous earnings pre-announcement comments.%?
+ 75%); the net profit attributable to shareholders of the listed company grew at a high rate exceeding the growth rate of revenue. The restructuring was due to the continuous promotion of the company’s product structure upgrade.

$ 81 billion resulted in a company’s 武汉夜网论坛 non-recurring gains and losses for a decade of +508.

04%, after excluding non-recurring gains and losses, the company achieved net profit attributable to listed companies for 18 years1.

5.5 billion, previously +19.


Product end: Deeply plowing the condiment industry, focusing on zero-add product reporting categories, the company’s condiment business achieved revenue8.

4.7 billion, ten years +10.

41%, revenue share increased to 79.

53%, an increase of 5.

37 single, caramel-colored businesses achieved revenue1.

8.5 billion every year -15.

50% of the decline in revenue is due to reduced purchases by major plant customers.

In terms of segmentation, soy sauce achieved revenue 6.

More than ten percent of 09.

40% (sales +16.

92%, ton price +2.

98%), vinegar realized revenue 1.

78 ppm, +17 a year.
04% (sales +7.

78%, ton price +8.

Obviously, 杭州夜网论坛 the proportion of revenues of zero-added products represented by organic series products, first-class original fragrance series products, and storage vinegar series products reached about 60%, indicating that the company has effectively implemented the report with “zero-added series products as the core”Category strategy.

Focusing on zero additions promotes the increase in overall gross profit margin, and two-factor resonance promotes net profit margins to significantly increase gross profit margins: Thanks to the company’s focus on high-margin zero-added products, the company’s overall gross profit margin reached 45 in 18 years.

95%, an increase of 2 from 17 years.

58 points, among which the soy sauce and vinegar business gross margins increased by 1.


39 targets; net profit margin: benefited from the increase in gross profit margin levels and a significant increase in asset disposal income (the revenue share of asset disposal income in 18 years increased by 7 compared to 17 years.

63 single) two-factor resonances, in the context of the increase in the period expense ratio (the company’s period expense expenditure in 18 years 27.

27%, an increase of 1 over 17 years.

62 totals, of which the sales / management (plus R & D expenses) / financial expense ratios are changed by +1.

78 / -0.

19 / + 0.

03 units, of which the sales expense ratio has increased significantly, and it has been reported that the company continues to increase the sales force, and at the same time, strengthening the sales staff budget system has led to an increase in sales staff expenses26.

86%), the company’s net interest rate reached 22.

53%, a significant increase of 7 from 17 years.

33 units.

The dual expansion of production capacity channels expanded the company’s differentiated strategic growth and development of basic capabilities: the company issued on June 20, 20183.

56 billion convertible bonds, invested in the expansion of 25-inch brewing soy sauce and vinegar production line.

According to the plan, the fund-raising project will be initially put into production within the next 4 years.

According to the plan, the first phase of 10 is expected to expand production of soy sauce in 2019, if the full production capacity is released, it is expected to be in September 2017.

6 on the basis of output expansion about doubled.

Channel Expansion: The company expands its continuation goals, continues to develop economically developed areas, and cooperates with local advantaged KA channels; gradually splits up large separate communities and lays out potential markets.

The dual expansion of production capacity channels provided a foundation for the company to implement a zero-add differential development strategy.

Third, the investment proposal estimates that the company’s operating income in 19-21 will be 12.

$ 8.3 billion / 15.

02 ppm / 17.

30 ppm, +20 a year.

4% / 17.

1% / 15.

1%; net profit attributable to listed companies is 2.

04 ppm / 2.

35 ppm / 2.

6.6 billion, at least -15.

1% / + 15.

3% / + 13.

1%, equivalent to 0 EPS.

62 yuan / 0.

72 yuan / 0.
81 yuan, corresponding to PE is 36X / 31X / 27X.

The overall condiment plate is currently estimated at 50.
The company is estimated to be twice as low as the industry. The double expansion of the company ‘s production capacity channels has broken through the development foundation to promote the zero-add differential development strategy and has high growth certainty.

In summary, a “recommended” rating is given.

4. Risk warnings: product output and sales are not up to expectations, gross profit margin declines, food safety issues, etc.