Qianhe Flavor Industry (603027): The core market accelerates and the growth trend continues

Qianhe Flavor Industry (603027): The core market accelerates and the growth trend continues

Event description Qianhe Weiye disclosed its 2019 Interim Report: Qianhe Weiye’s operating income in the first half of 20195.

0.94 million yuan, an increase of 24.

07%; net profit attributable to mother 8731.

490,000 yuan, a decrease of 35 per year.

55%, an increase of 34 in the next ten years.

35%; of which the second quarter operating income3.

30,000 yuan, an annual increase of 29.

96%; net profit attributable to mother 3678.

970,000 yuan, an increase of 44 per year.

09%, up 61 after 10 years.


Incident Review: The condiment segment accelerated its growth, driving increased profitability: the company’s condiments achieved revenue in the first half of 20194.

96 ppm, a 34-year increase of 34.

3% (Q1 growth rate of 28.

05%, Q2 growth rate of 40.

74%), of which the growth of zero-added products was better than the overall; in terms of products, soy sauce achieved revenue3.

56 ppm, an increase of 37 in ten years.

04% (Q1 growth rate of 32.

23%, Q2 growth rate of 41.

94%); vinegar realized income 9923.

720,000 yuan, an increase of 20 in ten years.

87% (Q1 growth rate of 7.

69%, Q2 growth rate of 34.

82%); caramel color realized income 7843.

220,000 yuan, a ten-year average of 17.

64%, mainly due to the loss of customers in South China since the second quarter of last year.

The company’s gross profit margin reached 46 in the first half of the year.

61%, previously increased by 3pct, deducting non-net interest rate reached 13.

5%, increase by 1 every year.


It is expected that the proportion of mid-to-high-end products will continue to increase in the future, and the cost will be high before and after low, which will improve profitability.

The Southwest base market accelerated month-on-month, and the key regions maintained rapid growth: In 2019, the company continued to explore the national market and further strengthened the intensive cultivation in the Southwest market. In the first half of the year, the growth in the major key regions was strong, and the Southwest grew.

4% (of which 28 in the second quarter.

88%), the Southwest market continues to improve; East China grows 28% annually.

52%, North China is growing by 64 each year.

59% in Northwest China, an increase of 50 in ten years.

40%, South China in the middle of the decade12.
04%, mainly due to the impact of customer loss of caramel color business; e-commerce revenue in the first half of 5296.
170,000 yuan, an increase of 59 in ten years.

36%, continued to accelerate.

The number of dealers in each region also continued to increase in the second quarter, of which 17 in East China, 33 in North China, 14 in South China, and 10 in Central China.

The expansion of key areas continued to make efforts, adding new channels, expanding business personnel, expanding ground advertising, and refocusing with zero-add brand positioning.

Continue to be optimistic about 重庆耍耍网 the company’s medium and long-term differentiated competitive advantage.

We continue to be optimistic about the growth potential and differentiated competitive advantages of the company’s zero-additive products, and we expect to benefit in the long term under the trend of healthy upgrading of condiments.

EPS are expected to be 0 in 2019/2020.

50 yuan / 0.

62 yuan, corresponding to 45 times / 36 times PE, maintain “Buy” rating.

Risk Warning: 1.

Industry competition is intensifying, and product demand falls short of expectations; 2.

Food safety issues, policy adjustment factors, and other uncertain events.

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