Hengshun Vinegar Industry (600305): The recognition of business capacity and potential is increasing

Hengshun Vinegar’s operating capacity and potential in the vinegar industry is being recognized by more investors. The market has recognized that Hengshun Vinegar’s leader in the vinegar segment has been very high, and the main focus is on the company’s operations.Capacity and future expansion potential.

We believe that the feedback from terminal and channel vendors of the product price increase gradually launched by the company in early 2019 obviously exceeds the last round of price increase in 2016, and the market’s recognition of the company’s operating capabilities has significantly improved after the price increase.

In addition, the rapid volume of cooking wine business can also reduce investors’ compensation for the long-term growth potential of Hengshun Vinegar.

We expect Hengshun Vinegar 2019?
In 2021, the EPS will be 0.

44 yuan, 0.

51 yuan and 0.

57 yuan, maintaining the “overweight” level.

Smoother price increase process: The market’s recognition of Hengshun Vinegar’s operating capabilities is increasing. Hengshun Vinegar announced on January 5, 2019 that, based on cost factors such as packaging materials, in order to further expand 深圳桑拿网 the strategy of key A products, rationalizeThe price system, the company decided to adjust the ex-factory price of 5 varieties of products such as Hengshun Balsamic Vinegar, Hengshun Aged Vinegar and Hengshun Cooking Wine. The price adjustment will be implemented from January 1, 2019.

After the price increase was implemented, Hengshun Vinegar Industry achieved revenue in 2019Q1.

60 ppm, an increase of 15 in ten years.

15%, achieve net profit attributable to mother 0.

72 ppm, an increase of 21 in ten years.

66%, realized non-returned net profit of 0.

62 ppm, an increase of 25 in ten years.


We believe that the market and channel vendors responding to this price increase at random in the last round of product price increases in 2016Q3 reflect the company’s good judgment of industry demand and the efficient execution of price adjustment policies.

The sustained and rapid growth of cooking wine business: Alleviated the growth of the market for the company’s medium- and long-term growth potential. Due to the characteristics of the needs of downstream distributors and customers, category expansion is one of the important growth dimensions of condiment companies.

Cooking wine is another important condiment segmentation field of Hengshun vinegar industry besides the main business vinegar. The high coincidence of vinegar and cooking wine in the process determines that Hengshun vinegar industry has advantages at the production end.”Hengshun” brand also has extensive market influence and appeal in the Yangtze River Delta region, the main consumption region of cooking wine. We believe that cooking wine is expected to become the second growth pole of Hengshun vinegar industry. At the same time, Hengshun vinegar industry may be the cooking wine market capacity.One of the main beneficiary brands for expansion and integration.

We are optimistic about the development potential of Hengshun Vinegar and maintain the rating of “Overweight”. We believe that the smooth price increase of core products has demonstrated the industry structure of Hengshun Vinegar and the good growth of new products has opened the ceiling for the long-term development of Hengshun Vinegar.
According to the profit forecast, we expect Hengshun Vinegar Industry 2019?
Revenues will reach 19 in 2021.

170,000 yuan, 21.

3.4 billion and 23.

6.1 billion; EPS will reach 0 respectively.

44 yuan, 0.

51 yuan and 0.

57 yuan.

The average estimated level of comparable companies is 46 times PE in 2019, and we give Hengshun Vinegar Industry 45?
46 times PE estimates, raise the target price range to 19.


24 yuan, maintaining the “overweight” level.

Risk warning: the impact of product price increases on sales; new product growth is not up to expectations; food safety.