Haitian Flavor Industry (603288) Q3 2019 review: Q3’s steady growth in production capacity and continuous expansion of channels

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Haitian Flavor Industry (603288) Q3 2019 review: Q3’s steady growth in production capacity and continuous expansion of channels

Company dynamics The company released the 2019Q3 quarterly report, and achieved revenue of 148 in the first three quarters.

2.4 billion, +16 per year.

6%, attributable net profit is 38.

3.5 billion, +22 a year.


  Matter commentary performance was in line with expectations, soy sauce was stable, seasoning sauce was speeding up seasonally, and Midwest Rapid Penetration Company Q3 achieved revenue of 46.

6.4 billion, +16 per year.

8%, maintaining steady growth, 59 cash back.

9.9 billion, +20 in ten years.

4%, the growth rate is slightly higher than the growth rate of income.

At the end of the period, the company received advance accounts19.

3.8 billion, +51 per year.


In terms of categories, the income of soy sauce / oyster sauce / seasoning sauce in the first three quarters was 86.



6.5 billion, +13 per year.

8% / + 20.

3% / + 9.

2%, the total revenue of the three categories accounted for 87.

6%, of which Q3 soy sauce / oyster sauce / seasoning sauce income were 26.



4.0 billion, +14 per year.

1% / + 18.

7% / + 14.

0%, the performance of soy sauce is stable, the quarterly growth rate of oyster sauce rebounded slightly, the quarterly growth rate of seasoning sauce continued to rise, breaking 10%.

In terms of regions, Q3’s northern / southern / eastern / central / western income was 10 respectively.





1.9 billion, ten years +9.

6% / + 14.

4% / + 14.

9% / + 23.

2% / + 30.

The northern and western regions contributed 7% of the growth rate.At the end of the period, the number of the company’s dealers nationwide reached 5,640, with 693 new additions during the year, and the channel continued to expand.

The number of North / Central / Western distributors increased by 283/132/144, respectively. It is expected that the mature market channels in the North will become more and more refined, and the growth channels of the Midwest growth market will rapidly penetrate.

  The change in product structure caused fluctuations in gross profit margin, and the expense ratio continued to decline. The gross profit margin of Q3 was 43.

7%, one year -1.

4 points, mainly due to the relatively high gross profit margin of oyster sauce products increased the proportion.

Q3’s sales / management / R & D / financial expense ratios were 12 respectively.

9% / 1.

9% / 3.

4% /-1.

8%, twice -2.

8pct / + 0.

7pct / -1.

3pct / -0.

7pct, some distributors choose to pick up products, which reduces the company’s freight expenses and sales expense ratio, and deposit income increases and financial expense ratio decreases.

Company Q3 received zero gains from changes in fair value.

4.5 billion US dollars, mainly income from wealth management products; other income 0.

1.1 billion yuan, mainly for government subsidies.

  The net profit attributable to the company in Q3 was 10.

8.5 billion, +22 a year.

9%, the reduction of the expense ratio fell to increase the level of profit to release space, Q3 net profit was 23.

3%, ten 深圳桑拿网 years +1.


  Capacity expansion is the basis for steady growth. By 2018, the company has 184 soy sauce.

8, oyster sauce 60, sauce 30.

2 production capacity, significantly leading the industry.

According to the introduction of the seasoning expansion plan of Gaoming Haitian 220, it is expected that in 2019/2021/2023, it will be replaced by soy sauce 60/60/30, sauce 10/10/10, and compound seasoning 20/10/10.The company’s soy sauce, soy sauce and compound seasoning production capacity is expected to reach 334 respectively.



7-digit capacity.

In addition, the company plans to implement 30 oyster sauce expansion projects. It is planned to start in July 2019 and be completed and put into operation in June 2020. The production capacity of oyster sauce will be promoted to reach 90 degrees Celsius in 2020.

From 2018 to 2023, the CAGR of the company’s soy sauce and soy production energy increased by 12 respectively.

6%, 14.

8%, combined with future price increase expectations and product structure optimization, the company continues to maintain steady growth and growth protection.

  The investment proposal maintains the profit forecast. It is expected that the company’s attributable net profit for 2019-2021 will be 52.



43 trillion, corresponding to EPS 1.



68 yuan / share, corresponding PE is 56/48/41 times (based on the closing price of 2019/10/29).The company is an absolute leader in condiments, soy sauce is subject to product upgrades and expansion; oyster sauce continues to increase in volume, and the increase in volume brings scale effects to increase gross profit; the growth of seasoning sauce accelerates seasonally, and the recovery trend is good.

At the same time, the company actively deployed new categories such as vinegar and cooking wine to create new growth momentum.

The continuous expansion of production capacity is the basis for the company’s steady growth in the third and fifth stages, and its performance is highly deterministic, maintaining the “overweight” level.

  The risks include food safety risks, risks of raw material price fluctuations, risk of brain drain, and risk of declining industry prosperity.