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Yasui Foods (603345): Clear business strategy, cost pressures and response

04/03/2020

Yasui Foods (603345): Clear business strategy, cost pressures and response

Company status We recently participated in the research of Yasui Food’s subsidiary in Wuxi, had an in-depth exchange with leaders and distributors, and visited the workshop of Wuxi Noodle Factory.

We believe that the cooperation model between the company and downstream channel vendors is good and continuous, with too much capacity reserve, and facing the pressure of increasing raw material costs, but the company must switch grafting and response capabilities, so we maintain a clear “comprehensive first” business strategy and catering business.Worthy of attention.

The company proposes a “comprehensive first” business strategy, and strives to open the gap in the comprehensive fields such as single products, channels and regions.

We believe that the company’s strategy is clear and it can launch successful single products every year. This year’s rice-based hand-torn steamed buns, sweet-scented osmanthus cakes, steamed sausages for hot pot ingredients, and flavored deep-fried rice dumpling boxes are all worthy of attention; channel-side catering linesIt is expected to drive sales through two main product combinations: Boxing and Mr. Frozen OEM Outsourcing. Actively seize market demand through a combination of light and heavy assets. The agricultural trade line promotes sales promotion through the establishment of new products and new stores.Exploring new channels such as fresh produce; regional sales will adopt differentiated market strategies based on different maturity levels. We expect the company to expand support for downstream customers in the Sichuan region with major capacity releases this year.

According to grassroots research, the company’s operating conditions in April were good. Combined with the pre-judgment of the orderly release of the company’s production capacity, we expect the company’s revenue end to continue its rapid double-digit growth trend in 1H19.

The rising pressure of raw materials can be controlled, and the company can switch grafting and response capabilities.

At present, the company responds to cost increases by reducing product promotion efforts and changing the cost structure. We believe that the company’s ability as one of the industry leaders to increase prices and transfer cost pressures in the random market can be followed by a rich product matrix.Product structure upgrades and other ways to cope with cost pressures.

We expect the company’s gross profit margin level to remain stable in 19 years.

The orderly release of production capacity maintained the judgment that the company’s expense rate was steadily decreasing.

In 19, the company ‘s Sichuan plant will contribute major incremental production capacity. Next year, Wuxi ‘s third phase, and the Henan and Hubei plants will also be put into production in an orderly manner. At present, the company ‘s production capacity utilization rates are at a relatively high level. We expect to increase the capacity utilization rate.Higher level.

We 武汉夜网论坛 believe that the sales expense ratio benefits from the strength of the catering distribution channel, the dealers streamline and improve efficiency, and the scale effect and other factors have a downside. The management and R & D expense ratio mainly benefits from the scale effect and has a downside. We expect the company’s overall expenses in 19The rate will continue to decline.

Estimates suggest maintaining the 19/20 EPS forecast1.

55/1.

88 yuan, as the center of the sector moves upwards, the target price is raised by 17% to 54.

15 yuan, currently expected to correspond to 19/20 30/25 times P / E, target price corresponds to 19/20 35/29 times P / E, the current price still has 16% space, maintaining the recommended level.

Risks Raw materials fluctuate, industry demand changes, industry competition intensifies, and food safety risks.