JONJEE HI-TECH(600872)COMMENTS ON 2022 ANNUAL REPORT：2022 ANNUAL RESULT IS IN LINE WITH US WAIT FOR THE RECOVERY IN 2023

Jonjee Hi-Tech (JH) released 2022 annual report, which was in line with the preannouncement. JH’s revenue and recurrent profit were Rmb5.341bn (yoy +4.41%) and Rmb0.556bn (yoy -22.5%) respectively in 2022, and Rmb1.39bn (yoy -18.7%) and Rmb0.15bn (yoy -57.9%) respectively in 22Q4.
Rising costs and expanding expenses put pressure on the profitability. The gross margin of Meiweixian Flavoring Foods (MWX) -2.7pcts YoY to 30.7% in 2022 due to the rising costs, of which soybean price +9.3% YoY in 2022. In 2022, the selling/management/R&D/finance expense ratio of MWX was +0.8/+0.4/-0.1/-0.6pct YoY respectively. Expanding expenses is mainly due to the issuance of subsidies and bonuses. MWX’s net profit margin -2.1pct YoY to 11% in 2022.
Soy sauce revenue grew steadily, but edible oil revenue grew slowly. In 2022, the revenue of soy sauce/chicken powder/edible oil/other condiments +7%/9.2%/1.9%/9.3% YoY to Rmb3030/600/500/770mn respectively; the price of soy sauce/chicken powder/edible oil/other condiments +1.8%/3.6%/11%/4.9% YoY respectively. Soy sauce revenue grew steadily, but edible oil revenue grew slowly due to the rising price.
JH took multiple measures to develop channels. In 2022, JH’s revenue from eastern/southern/central&western/northern regions +0.8%/7.0%/11.2%/12.6% YoY to Rmb1130/2040/1010/710mn respectively. The revenue from eastern region grew slowly due to the pandemic shock. JH follows the guideline of "stabilizing KA, developing BC, boosting secondary distributors, expanding catering customers, and boosting online channels". In 2022, JH achieved a net increase of 301 distributors with 68.12%/93.47% of development rate of districts&counties/prefecture-level cities.
We expect JH to grow steadily in 23Q1 and JH’s channel to continuously expand in 2023. The pandemic impact diminished after 2023 Spring Festival. We expect JH to grow steadily in 23Q1 and JH’s channel to continuously expand in 2023. JH is very likely to achieve a net increase of more than 200 distributors in 2023.
Earnings Forecast & Rating: We maintain the “Outperform” rating. Considering that the channels need time to recover, we revise down 2023/2024 earnings forecast. We expect that JH’ revenue will +6%/10%/12% YoY to Rmb5.7/6.3/7.0bn (previous forecast Rmb6.0/6.7/-bn) in 2023/2024/2025 respectively, and net profit will +201%/25%/20% YoY to Rmb0.60/0.75/0.90bn (previous forecast Rmb0.80/0.97/-bn) in 2023/2024/2025 respectively, with corresponding P/E at 49/39/33x in 2023/2024/2025 respectively.
Risks: Fluctuation in raw material prices, intensified market competition, food safety issue, less-than-expected demand.
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   【免责声明】本文仅代表第三方观点，不代表和讯网立场。投资者据此操作，风险请自担。