Taoli Bread (603866): Revenue growth in line with expectations Expected cost increase affects profit

Taoli Bread (603866): Revenue growth in line with expectations Expected cost increase affects profit

Investment Highlights: Event: The company released the third quarter report of 2019, and achieved operating income of 41 in the first three quarters.

2.2 billion, a year-on-year increase of 17%; net profit attributable to mothers5.

3.0 billion, an increase of 8 in ten years.

7%, deducting non-net profit 4.

8.8 billion, an increase of 9 in ten years.

7%.

In the third and third quarters, the operating income was 15.

6.4 billion, an increase of 15 in ten years.

2%; net profit attributable 杭州桑拿 to mother 1.

99 billion, 0 from the previous decade.

2%, deducting non-net profit 1.

9.3 billion, an annual increase of 3.

6%.

The revenue was in line with expectations, and the profit was lower than expected, mainly due to increased costs and reduced government subsidies.

Investment rating and estimation: As the third quarter results are slightly lower than expected, we have slightly lowered our profit forecast and forecast a net profit of 19-21 in 2007.

27, 8.

46, 9.

9.7 billion (previously 7).

5, 8.

8, 10.

400 million), an increase of 13 in ten years.

3%, 16.

3%, 17.

9%, corresponding to an EPS of 1.

1.

28 and 1.

51 yuan (1 last time).

14.1.

34, 1.

57 yuan), currently corresponding to 19-21 years PE are 41, 35, 30x respectively, maintaining an overweight rating.

The company has a long-term perspective. 1) Benefiting from consumption upgrades, the baking industry is one of the most growing food and beverage sub-industries; 2) The company’s “central factory + wholesale” business model can be replicated in different places, and new production capacity is gradually increasing + matureThe market’s intensive cultivation drives stable income growth with obvious first-mover advantages.

Tao Li, as one of the few industry leaders with only stable growth capabilities, has even increased slightly, exceeding the average level, and deserves continued attention.

Revenue maintained double-digit growth. Production capacity is relatively high this year.

The company’s revenue in the third quarter increased by 15 per year.

The improvement of 2% from the second quarter was mainly due to production capacity restrictions this year. It is expected that the Shandong and Wuhan plants will gradually reach capacity in the first half of next year.

By region, North China achieved revenue in the third quarter3.

6.1 billion, northeast 8.

1.9 billion, East China 3.12 billion, southwest 1.

7.9 billion, northwest.

0.9 billion, South China 0.

9.9 billion, with a revenue share of 19.

2% / 43.

6% / 16.

6% / 9.

5% / 5.

8% / 5.

3%.

It is estimated that mature markets in the northeast will maintain double-digit growth this year, mainly due to sinking channels and continued increase in per capita consumption. Emerging markets in South China are expected to grow by about 30%. Local plant capacity utilization continues to increase. East China markets are expected to grow by about 20%.Still in the market possession period.

The cost increase has increased, and government subsidies have at least decreased.

Net profit in the third quarter was basically flat with a net interest rate of 12.

75% carbon monoxide.

97pct, mainly due to increased selling expenses and reduced government subsidies.

Gross profit margin in the third quarter was 39.

6% increased by 0.

2pct, while the sales / management (including R & D) / financial expense ratios are 20 respectively.

9% / 1.

7% / 0.

0%, increase by 1 every year.

5/0.

2/0.

1 point, the increase in the sales expense ratio is mainly due to: 1) the increase in shipping costs caused by sinking channels, 2) market expansion costs in new markets, and 3) the promotion of moon cakes in Q3 has increased compared with 佛山桑拿网 previous years.

In addition, government subsidies in the third quarter decreased by 15 million compared with the same period last year.

Catalysts for continued performance: Accelerated revenue growth Core assumptions Risks: Food safety issues, increased industry competition