Qianhe Flavor Industry (603027) Research Report: Accurate Positioning
Event: Recently, we conducted research on the company and exchanged information on the company’s situation and participation.
Core point of view: The company is the first to position itself in the high-end sauce and vinegar market, avoiding competition with leading companies. The compound growth rate of condiments has increased by about 30% in the past five years, and has accelerated metabolism.The advantages are outstanding; the company was established in the southwestern region, and through 杭州桑拿网 years of intensive cultivation, it has grown into a leading vinegar and vinegar leader in the southwestern region.
With the upgrading of consumption, the capacity of the high-end soy sauce market continues to expand. In 2018, the high-end soy sauce market exceeded 20 billion US dollars, and the industry has a broad space.
Leading company in the Southwest sauce and vinegar market, the high-end market has a first-mover advantage.
1. The first-mover advantage is obvious: Qianhe took the lead in developing zero-added soy sauce in 2008, creating a precedent of “no MSG and no preservatives” and zero-adding healthy soy sauce, thus positioning the brand as a high-end healthy condiment and product as 16-30 yuan high-end soy sauce price band.
2.Focus on zero-add to drive high-speed growth: In 2018, the company merged development ideas focusing on zero-add, supplemented by high freshness, and continued to tilt towards zero-add series in terms of promotion. In the first half of 2019, high-performance growth, soy sauce categoriesIt is up 37% year-on-year, and the vinegar category is up 21% every year.
Southwest China continued to cultivate deeply, and the market growth rate of Fuwai was bright.
The company has been cultivating in the Southwest for many years, contributing about 50% of its income, and adopting the strategy of full-channel, high-, low-, and full-price promotion. It has gained a competitive advantage in transfer, benefiting from the expansion and sink of the sales network, and the product structure in the Southwest has been continuously upgraded.North China, East China, Northwest, and Northeast markets have developed well, with a growth rate of about 50% in 19H1. The South China market has been less affected by the decline in the caramel business, and has joined forces with superior distributors to develop the market.
Supermarket channels are the mainstay, and close cooperation with dealers opens the market quickly.
The development of the 19H1 market is progressing smoothly, and most regions have exceeded their targets. In the second half of the year, the focus is still on expanding the top 100 counties and population counties, and continue to increase the expansion of East China and North China.
Qianhe’s business channel accounts for about 50%. The existing company’s sales team, dealer team and shopping guide team work together to develop the market, cooperate closely, and achieve rapid market promotion through local promotion + shopping guide.
Earnings forecasts and investment advice.
Estimated revenues for 2019-2021 are 13 ppm and 15 respectively.
600 million, 18.
400 million yuan, the net profit attributable to mother is 2 respectively.
200 million, 2.
800 million, 3.
500 million, EPS is 0.
48 yuan, 0.
61 yuan, 0.
77 yuan, corresponding to a dynamic PE of 46 times, 36 times, 29 times, maintaining the “overweight” level.
Risk warning: raw material prices may fluctuate significantly; food safety risks.