Tianwei Food (603317) Interim Review: Accelerating Revenue Growth, Profitability Maintaining Improvement

The main body of the report: Tianwei Food announced the semi-annual report for 2019, and the company achieved revenue 6 in 19H1.

29 ppm, +32 a year.

10%, net profit attributable to mother 1.

30,000 yuan, +40 for ten years.

85% of which, 19Q2 revenue was 3.

24 ppm, +39 a year.

01%, net profit attributable to mother 0.

29 trillion, +51 for ten years.


The initial gain is zero.

27 yuan.

Investment points Brand upgrades, channel expansion, and accelerated revenue growth.

The company achieved revenue 6 in 19H1.

29 ppm, +32 a year.

10% (Q1: +25.

14%, second quarter: +39.


The revenue growth rate has accelerated, and we expect that it will be mainly driven by the product volume and channel expansion after the brand upgrade. Finally, at the end of 19Q2, the company’s advance receipts will be extended by +78.

85%, indicating that downstream demand is improving, and the continued high growth of subsequent revenue can be expected.

Szechuan cuisine base material has increased significantly: the company’s top three categories of hot pot base material in the first half of 19H1 (40%).

32%), Sichuan food base (51%).

47%), chicken essence (proportion 3).

54%) respectively +1.

84%, +50.

58% and +18.

60%, of which Sichuan food base product has a considerable growth rate, mainly due to: 1) the company launched the “good people” in 18 years.

The 0 version of the fish seasoning series is another fist product after continuing the old pickled fish, and has continued to increase its volume this year; 2) The company 19H1 optimized and upgraded the “Good People” brand, positioning it to be younger and help the product grow.

Proactive initiative outside the province: From the perspective of the channel composition: the proportion of distributors / customized meals / e-commerce / direct sales / supermarket / foreign trade in the revenue of 19H1 companies was 84.

15% / 9.

72% / 4.

48% / 0.

89% / 0.

56%, from the perspective of channel structure, distribution is still the main sales model.

In 19H1, the number of dealers reached 882 (a net increase of 73), of which the dealers in East China and Central China had a significant net increase, reaching 27 and 16, respectively, while the southwest region saw a net decrease of two.

From the perspective of regional composition: the proportion of 19H1 companies in Southwest China / Central China / Eastern China / North China / Northeast China / South China was 29 respectively.

84% / 19.

47% / 16.

45% / 9.72% / 9.

32% / 6.

66%, of which the proportion of East China, South China and North China increased by 2 compared with the end of 18, respectively.

14pct, 1.

34 points and 1.

10pct, the trend of regional expansion appears.

The gross profit margin increased slightly, the expense ratio decreased slightly, and the profitability showed improvement.

Structure optimization drove a slight increase in gross profit margin: the company’s gross profit margin in 19H1 was 38.

69% (first season: 39.

73%, second season: 37.

70%), the previous +0.

40pct, a slight decrease from the previous quarter was mainly due to the restructuring of product mix and the difference in capacity utilization.

Benefiting from the structural optimization trend of new product volume, the company’s gross profit margin continued to increase.

The expense ratio went down, and the company’s profitability improved: The company achieved net profit attributable to its mother in 1H1.

30,000 yuan, +40 for ten years.

85% (Q1: +37.

02%, second quarter: +51.


Revenue accelerated, gross profit margin increased slightly, and the overall expense ratio fell repeatedly. The company’s profitability continued to improve in 19Q2.

19H1 company sales / management / 北京桑拿洗浴保健 finance / R & D expense ratios are 14 respectively.

88% / 4.

30% /-0.

31% / 1.

74%, +1 each year.

25pct / 3.

28 points / -0.

14pct / + 1.

74%, the overall expense ratio is short-term -0.

43 points.

19Q2 sales expense rate growth rate +0.

04pct, mainly due to the company’s increased advertising and marketing costs: 19H1 company’s advertising costs and business promotion costs are +198 each year.

11% and +122.


The company’s 19H1 net margin was 16.

30%, of which Q2 net margin is 8.

99%, ten years +0.

75 points.

Middle and long-term highlights: product matrix layout, multi-dimensional penetration of channels.

Revenue: Through product iteration + category expansion, the company has established a product line with Sichuan flavor compound seasoning as the core, and other regional special 淡水桑拿网 flavors, basic seasonings, and customized products as supplements (SKU over 100)The matrix weakened the impact of complications inherent in sub-industries such as hot pot bottoms, and balanced capacity utilization and profit distribution during the quarter.

Channel side: The company’s channel composition includes a diversified channel marketing system including distributors, customized meals, e-commerce, and direct sales (currently covering 320,000 retail terminals, 5).960,000 hypermarkets and 4.

20,000 restaurant chain single stores).

From the perspective of the trend, the company’s distribution ratio is declining, and the proportion of special sales and e-commerce sales has increased.

The trend of balance among different channels has also helped the company’s market expansion.

Compared with competing products, the company’s revenue is much higher than the revenue of non-affiliated parties of the same Yihai International with a Haidilao brand.

Profit side: The company’s gross profit margin is in the middle-to-high position in the industry, and the gross profit margin of major products is still slightly increased.

Price size: There is a certain brand premium between the product butter base and home base and the same industry companies, and the historical tonnage price has a steady upward trend; cost size: due to the large variety of raw materials and the small proportion of individual raw materials, it is stable and easy to control, Comprehensive unit cost fluctuations can be controlled.

Profit forecast and investment advice The company is a brand enterprise in the high-boom condiment sub-industry, and its products and channels are showing the best trend. It is expected that the market will be further opened by raising projects for production.

The company’s revenue is expected to be 17 in 2019.

600 million (+24.

5%), net profit attributable to mother is 3.

300 million (+25.

2%), corresponding to the closing price on August 2, 2019, with a PE of 49x, and maintains a “prudent overweight” rating. It is recommended to pay active attention.

Risk prompts food safety issues, macroeconomic growth, increased industry competition, and rising raw material costs