Hengshun Vinegar Industry (600305): Steady mechanism for condiment management needs to be optimized

Event: Annual report 18, revenue 16.

900 million (+9.

87%), net profit attributable to mother 3.

50,000 yuan (+8.

44%), net profit after deduction 2.

1.9 billion (+21.

06%), EPS0.

39 yuan.

Different from the market point of view: 1. Focus on the main condiment business and stable growth: Since the new post in 2014, the company is committed to promoting the focus strategy of the main business.Income 夜来香体验网 15.

300 million, an increase of 10 in ten years.

4%, revenue and gross profit accounted for more than 80%.

Among them, vinegar income increased by 12.

5% to 11.

60,000 yuan, sales and ton prices increased by 8.

8% / 3.

4%, specifically including white vinegar growth 13.

3% to 1.

600 million, black vinegar increased by 9.

6% to 9.

2 ppm, and high-end vinegar increased by 15.

1% to 2.

400 million, accounting for 20.


As for cooking wine, it increased by 26 in 18 years.

8% to 1.

90,000 yuan, sales increased by 33.

4% to 4.

3 nominal, the ton price fell 4.

9%, mainly because the current cooking wine market is very fragmented, each company is racing, and the market share has become the primary goal.

2. The profitability of condiment has improved significantly, and the vinegar business has led the industry to upgrade: the company’s non-recurring profits and losses of 85.26 million yuan in 18 years are mainly investment real estate and government subsidies.

Excluding this, the company’s net profit margin increased by 1 last year.

2pct to 13%, expanded, the overall gross profit margin increased by 1.

6pct to 42.

2%, mainly due to the increase in tonne price of vinegar and its gross profit margin increased by 2pct, while the gross profit margin of cooking wine decreased by 6.

3cpt corrects some positive effects.

At the same time, the company’s expenses were streamlined, and the sales expense ratio fell to zero.

26pct, of which the promotion expenses decreased by 22%; the management expenses decreased by 17%, but the R & D expenses increased by 257%, the base number was small, and the changes were large, in which the proportion of total revenue decreased by 0.
18 points.
In addition, the overall profitability of the company’s statements increased by 2.

1 point to 17.

9%, a reduction in the increase in profit, mainly due to the reduction in the company’s non-taxable income deduction last year.

3. In 19 years, we will continue to move forward steadily, and national reform will be broken through: According to the company’s annual report plan, the company’s condiment business revenue plan for 19 years will increase 12% to 17.

1 ‰, net profit after deducting non-growth increased by 15% to 2.

500 million.

This is the first time that the company has publicly disclosed that its assessment targets are mainly condiments and its main business focus.

At the same time, at the beginning of this year, the company was against 2.

About 400 million vinegar, cooking wine price increase of about 6-15%, is expected to contribute about 2pc of income elasticity.

We think this is mainly to smooth the price differences of some vinegar in different markets and the return of cooking wine prices.

In addition, the recent public transfer of Gree Electric Appliances, the introduction of Shanghai Pharmaceutical’s equity incentive plan, etc., is expected to be an important theme this year.

If Hengshun optimizes the mechanism in the future, it can realize the transformation and improvement of revenue scale and profit.

4. Profit forecast and estimation: The company’s EPS for 19-21 is expected to be 0.



55 yuan, corresponding PE is 32/27/24 times. Considering the company’s stable growth and large space for mechanism optimization, it is given a “recommended” rating.

5. Risk warnings: 1) Industry competition intensifies, sales are impacted, and profits decline; 2) raw material costs rise; 3) food safety issues