Fuling Mustard (002507) Company In-depth Report: Operation Turning Point Has Arrived

Fuling Mustard (002507) Company In-depth Report: Operation Turning Point Has Arrived

The industry has entered an era of stock competition, and its concentration has continued to increase.

The annual compound growth rate of the mustard industry in 2007-17 was 6.

7%, of which the ton price growth rate remained between 3-5%, mainly benefiting from breakthroughs and consumption upgrades.

In the future, through increasing brand awareness, expanding consumer groups and diversified consumption scenarios, the industry’s growth rate will strive to maintain about 5%.

From the perspective of the competition pattern, Fuling mustard has a dominant position, and the overall pattern is scattered.

7%; followed by a large-scale squeeze growth phase, market share will be further concentrated to the right-hand companies.

The 19-year performance is facing adjustment, and the two-pronged approach continues to inventory.

After the company experienced high growth in 17/18, the growth rate in 1H19 was only 2.
.

1%, entering the 深圳spa会所 performance adjustment period.

The 19-year performance of the 18-year high-growth overdraft part is due to the gradual disappearance of dividends after continuous price increases of mustard, industry competition has intensified slightly, and the company’s flooding, price increases and other activities have gradually pushed up channel inventory, resulting in weak subsequent growth.
In 19 years, the company responded quickly. The channel adjustment and marketing were two-pronged, taking into account the short-term destocking and long-term effects. The channel adjustment mainly included relaxing the credit line. The rebate was changed from quarterly to monthly. The dealer’s task index was adjusted.Short-term policies such as goods, and an additional 500 county-level dealers, while fissioning offices, to strengthen the management 天津夜网 and service of dealers, ensure that the channel sinks steadily, and pave the way for further release and release.

Learn from history and seek a way to break the situation.

From 2007 to 2019, the company’s revenue showed a clear change. Historical re-examination was carried out. Price increases, channel sinking, and category expansion were the main driving forces for revenue growth. Among them, the revenue in 2009-15 gradually changed to channel expansion and improvementThe price was unsuccessful, and the company’s channel network expanded and perfected in 16-18. At this time, product price increases contributed the most to revenue revenue.

It can be inferred that the company’s future way to break the situation: 1) Strengthen channel sinking and intensive cultivation, and harvest market share.

At present, the company has blank markets in vulnerable areas (northeast, northwest, etc.), which can speed up channel coverage; mature markets can increase county settlement in rural areas, refine channels, and strengthen product showrooms.

2) Rapid category expansion and optimization of product structure.

In line with consumption upgrades, the company should adhere to the unchanged mid-to-high-end positioning strategy, and at the same time strengthen the cultivation of large single products, and focus on the development of crispy series and kimchi categories.

Earnings forecasts and investment advice.

At present, the macro economy is in a downward cycle and consumption is severely weak.The company faces a period of operating adjustment in 2019. However, as the industry leader, the company has built three moats of channels, brands and raw materials.With the sinking of channels and the effects of category expansion gradually appearing, the company’s performance improvement in the future is sustainable. It is estimated that 4Q19 may be the low point of performance, and the 2020 performance is likely to stabilize and recover.

We expect revenue growth to be 4 in 19-21.

2%, 10.

8%, 12.

4%, net profit growth rate is 1.

8%, 13.

3%, 13.

8%, EPS is 0.

85, 0.

97, 1.

10 yuan.

Risk reminders: product price increases lead to reduced sales, increased channel inventory, less than expected volume of new products, rising pressure on prices of raw materials and packaging materials, increased expenses, and food safety issues.