Zhongjing Food(300908) 中原证券·2024-06-25 01:30Company Overview - The company, Zhongjing Food, has shown steady revenue growth from 2014 to 2024, with a notable acceleration in sales growth since 2020 due to the significant expansion of the compound seasoning market [1] - From 2014 to 2019, the company's sales grew at an average annual rate of 9.22%, increasing from 387 million yuan in 2014 to 628 million yuan in 2019 [1] - From 2020 to Q1 2024, the average annual sales growth rate was 14.31%, reaching 994 million yuan in 2023, with single product sales approaching the level of major products [1] - Compound seasonings remain the fastest-growing category for the company, with a sales growth of 18.96% in 2023, significantly higher than the growth of basic seasoning ingredients [2] - The company's compound seasoning products entered a stable growth phase after 2019, with an average annual sales growth of 13.47% from 2019 to 2023 [2] Market Position and Competitive Advantages - The company's main products include mushroom sauce and Shanghai scallion oil, which have competitive barriers and market competitiveness [12] - The company's seasoning ingredients, such as star anise and large ingredients, are differentiated in the market due to their unique flavor profiles, achieved through supercritical CO2 extraction technology [12] - The company has a higher gross margin compared to competitors, driven by its raw material advantages and retail-oriented product strategy [14] - The company's raw material advantage is supported by the unique mushroom cultivation capabilities in Xixia, which provides high-quality and cost-effective raw materials, forming a core competitive barrier [14] Financial Performance and Projections - The company's revenue is projected to grow from 882 million yuan in 2022 to 1,406 million yuan in 2026, with a compound annual growth rate (CAGR) of 12.77% from 2023 to 2026 [16] - Net profit is expected to increase from 126 million yuan in 2022 to 237 million yuan in 2026, with a CAGR of 36.72% from 2023 to 2026 [16] - Earnings per share (EPS) are forecasted to rise from 1.26 yuan in 2022 to 2.37 yuan in 2026, with a corresponding P/E ratio decreasing from 22.66 in 2022 to 12.05 in 2026 [16] Industry Overview - The compound seasoning industry has experienced rapid growth, with the market size reaching 150 billion yuan in 2020, growing at an average annual rate of 14.86% from 2014 to 2020 [49] - The industry's output increased from 711,000 tons in 2019 to an estimated 850,000 tons in 2020, with a CAGR of 26.34% from 2016 to 2020 [49] - The industry's revenue grew from 77.5 billion yuan in 2019 to 88.5 billion yuan in 2020, with a CAGR of 14.27% from 2013 to 2020 [49] - The penetration rate of compound seasonings in China is relatively low at 26% in 2020, compared to 73% in the US, 66% in Japan, and 59% in South Korea, indicating significant growth potential [55] Investment Recommendation - The company's major products are expected to continue growing, with projected EPS of 1.86 yuan, 2.13 yuan, and 2.37 yuan for 2024, 2025, and 2026, respectively [72] - Based on the closing price of 28.55 yuan on June 21, 2024, the corresponding P/E ratios are 15.35x, 13.40x, and 12.05x for 2024, 2025, and 2026, respectively [72] - The company is given an "Overweight" rating for the first time [72]