Tianwei Food (603317): Chuanwei Compound Leader Product Channels

Tianwei Food (603317): Chuanwei Compound Leader Product Channels

1. Sichuan-style seasoning leader, Tianwei Food with stable equity structure was established in 2007. It is mainly engaged in the research and development, production and sales of Sichuan-style compound seasonings. After more than ten years of intensive cultivation, it has developed into hot pot bottoms and Sichuan cuisine seasonings.For the leading Sichuan flavor compound seasoning manufacturer.

The company’s total share capital before the issue was 3.

7.2 billion shares, the couple of Deng Wen and Tang Lu controlled the company’s share ratio by 87 directly.

48% is the actual controller of the company.

The public offering of shares was 41.32 million shares at an issue price of 13.

46 yuan / share, total shares 4 after issuance.

With 1.3 billion shares, Deng Wen and Tang Lu remain the actual controllers.

2. Revenue is steady and upward, and profits continue to grow 1) The company’s revenue for 2016-2018 is 9.

84, 10.

66, 14.

1.3 billion, an increase of 13 in ten years.

27%, 8.

33%, 32.


Hotpot base and Sichuan cuisine seasoning are the company’s main sources of revenue.

Among them, the hot pot bottoms revenue in 2016-20184.

63, 4.

98, 6.

8.5 billion, accounting for about 47% of the past 3 years, Sichuan cuisine seasoning revenue 3 in 2016-2018.


86, 5.

18 天津夜网 billion, accounting for about 36% in the past 3 years; sausage and bacon seasoning revenue was 0 in 2016-2018.

68, 0.

86, 1.

1.7 billion, accounting for about 8%; chicken essence, spicy sauce income accounted for about 2%, 1%.

2) In terms of profitability, net profit attributable to mothers was achieved in 2016-20182.

03, 1.

84, 2.

6.7 billion, the previous change was 42.

82%, -9.

60%, 45.


The reason for the decline in the company’s net profit attributable to mothers in 2017 was the company’s implementation of equity incentive recognition of 2745.

The 900,000 yuan share payment fee, if excluding this cost, the company’s actual net profit is 2 respectively.

03, 2.

07, 2.

670,000 yuan, maintaining a steady growth trend.

3. The condiment industry has a “big space for small products.” The trend of compound condiments confirms that the scale of the condiment industry is 100 billion. The growth rate of compound condiments is leading.According to data from the National Bureau of Statistics, the total sales revenue of China’s condiment and fermentation products manufacturing industry reached 3,220 in 2017.

3.6 billion, an annual increase of 3.

76%, 2011-2017 industry revenue CAGR reached 9.


Although the overall growth rate has improved with the increase in scale, as a new sub-industry, compound seasonings have developed rapidly in recent years.

According to Frost & Sullivan statistics, from 2013 to 2017, the size of the Chinese compound condiment market increased from RMB 55.7 billion in 2013 to RMB 1091 million in 2017, with a compound annual growth rate of 15.


According to “China Food Industry Yearbook (2016)”, the industry trend of compound condiments partially replacing single condiments is mainly based on 1) the increase in domestic residents’ income levels, changes in dietary habits, and the simple past in oil, salt, sauce and vinegarCondiments are difficult to meet consumers’ needs for delicious, convenient and fast. A variety of compound seasonings can directly address the consumer pain points that young household consumers will not do and do n’t have time to do; 2) The standardization and chain operation of the restaurant industry are standardizedHigher demand for seasonings; 3) The proportion of compound seasonings in the seasoning market in Europe and the United States is high, while China’s compound seasonings account for about 30%. It benchmarks mature overseas food and beverage markets, and the domestic seasoning market hasHigher growth potential.

4. Chuanwei compound seasoning industry leader, brand, product, and channel end. The company has a leading position in the Sichuan flavor compound seasoning industry. According to the “China’s Top 100 Condiment Brands Annual Statistical Analysis and Analysis” released by the China Condiment Association.In 2015, 2016 and 2017, the company ranked 2nd, 2nd and 3rd in the hot pot seasoning output ranking of the top 100 companies, respectively. In 2015, 2016 and 2017, the company ranked the top 100 companies in compound seasoning output ranking.The companies ranked 8th, 6th, and 5th respectively, and the companies in front of the company are not mainly producing Sichuan flavor compound seasonings.

1) Brand: The company has successively awarded more than 40 honorary titles such as “National Key Leading Enterprise in Agricultural Industrialization” and “Sichuan Provincial Enterprise Technology Center”. The company’s “Dahongpao” and “Good People” trademarks have been recognized as “China Famous”Trademarks”, “Dahongpao” and “Good People” brand Sichuan flavor compound seasonings were identified as “Sichuan Famous Brand Products”, and “Sky Crane” trademarks were identified as “Chinese Time-honored Brands” by the Ministry of Commerce, with strong brand regional influence.

2) Product side: The company has a rich product line with Sichuan flavor compound seasoning as the core, supplemented by other regional special seasonings, basic seasonings, and customized products. Each product covers hot pot base, Sichuan cuisine seasoning, sausage bacon seasoning,More than 100 varieties in 9 categories including spicy sauce (excluding customized meal products).

At the same time, new products and new process development capabilities are leading, and high-quality new products are introduced to the market every year, fully covering consumer demand for diverse and convenient cooking flavors.

3) Channel side: The company has established a marketing structure covering the whole country, mainly dealers, customized meals, e-commerce, and direct sales.

In 2018, the company cooperated with 809 dealers, and the sales network covered about 30.

80,000 retail terminals, 5.

860,000 hypermarkets and 4.

10,000 catering chain single stores.

At present, the company’s sales network has covered 31 provinces, autonomous regions and municipalities across the country. A sound marketing network has helped the company to consolidate and increase market share and quickly cut into potential markets.

5. Raising funds to expand production capacity. Overweight marketing and informatization construction company intends to publicly issue 41.32 million ordinary shares (A shares) (the final number is subject to the number of issuances approved by the China Securities Regulatory Commission). It is expected that the raised funds will replace the issuance.The net after fees is 4.

8.9 billion.

The funds raised through the IPO will be invested in Danxian Tianwei Homeland Production Base Project, Shuangliu Production Base Rebuilding and Expansion, Marketing Service System and Comprehensive Information Construction Project in accordance with the priorities.

Through the implementation of fund-raising projects, the company will: 1) supplement production capacity 3.

8 average, accounting for 42 of the company’s total production capacity in 2018.

22%, of which the main new capacity is 1.

2 Initial customized meal production capacity and 0.

8-cation full-type (manual) hot pot base material capacity.

The project implementation will effectively expand the company’s new condiment production capacity to meet the growing market demand; 2) comprehensively upgrade the network layout, increase the chain terminal KA store and BC chain supermarket channel terminal layout, and increase the layout of outdoor, variety show, and e-commerce platforms, Strengthen brand building and publicity; 3) comprehensively introduce the budget system, business intelligence system, research and development system, omni-channel product conversion system and other information equipment, effectively improve the company’s overall information operation level.

Investment suggestion: We expect the company’s operating income to be 16 in 2019-2020.

9.9 billion, 20.

23 ppm, an increase of 20 each year.

23%, 19.

07%; net profit attributable to mothers is 3.

2.3 billion, 3.

9.5 billion, an increase of 21 each year.

05%, 22.

21%; corresponding EPS are 0.

78 and 0.

96 yuan / share, corresponding PE is 24.

8X, 20.
3 times.
Covered for the first time, giving “overweight” rating.

Risk reminders: food quality and safety risks, risks of raw material price fluctuations, risks of new companies entering the market, and risks of changes in industry policies