Taoli Bread (603866) Series Report 1: Dazzling Stars on High-Quality Tracks in the Bakery Industry-Capacity and Market Articles

Taoli Bread (603866) Series Report 1: Dazzling Stars on High-Quality Tracks in the Bakery Industry-Capacity and Market Articles

Report summary: The company’s mature market has grown steadily, and new markets are expected to grow.

The growth of mature markets mainly comes from: 1) the continuous refinement of the sales network, the channels sink to county-level cities and town-level cities; 2) the contribution of consumer cultivation: consumer habits begin to develop from students, and student groups become dietary habitsCommunicators, after entering the society, switch to family roles and continue to buy brands, with extremely strong consumption stickiness.

Growth markets and growth drivers for new markets: 1) Intensive cultivation of channels; 2) Gradual decline in production capacity: Take the East China market as an example. The market for East China’s short-term insurance is extremely broad, but it is consolidated in mature markets.Causes shrinkage differences.

The company regards East China as one of the key markets, increases its capacity layout, deploys excellent sales staff from mature markets, introduces distribution policies in remote areas, and continues to deepen its channels to grow.

The terminal is intensively cultivated and the channel barriers are deep.

Since 17 years, the number of company terminals has continued to grow at a rate of 20,000 to 30,000 units per year.

From the perspective of channel structure, the company’s KA channel revenue accounted for 26% in 2019H1.

65%, husband and wife shop, community shop is still the company’s core channel.

Foreign brands mostly enter large supermarkets and convenience stores, while other such channels account for a relatively small proportion of the overall retail channels.

As a local company, Taoli has a very strong ability to develop small stores. The company has steadily occupied the dominant shelf resources of community stores, schools, and small shops. The shelf resources of small stores are usually limited, and the company has a significant first-mover advantage. The channel barriers are constantly deepened.

Actively expand production capacity to help the nationalization process.

The company 杭州桑拿网 currently has a total of 17 factories in operation with a total capacity of 28, and the company’s capacity utilization has remained above 95% throughout the year.

The growth of production capacity is basically consistent with the growth rate of revenue. Therefore, solving the growth of production capacity is the key to the company’s goal of 10 billion.

Capacity under construction in Wuhan 2.

55 Federation / Shandong 2.

12 Cobalt / Jiangsu 2.

2 Forecast / Shenyang 6 is expected to be put into production in 19-20; Sichuan / Qingdao / Zhejiang project planning is expected to be put into operation near 2021; the problem of insufficient production capacity has been gradually solved, helping Taoli to reach the 10 billion target.

The short-term insurance industry is in a high-speed growth stage with huge market potential.

Taoli has been cultivating the market for more than 20 years. Consumer stickiness and deep channel barriers are difficult to shake for a short period of time. In the long term, participation in high-profile and high-level participation is conducive to jointly expanding the size of the industry.

Earnings forecast: We expect the company’s EPS for 2019-2021 to be 1.


40, 1.

69 yuan, corresponding to PE is 42 times, 34 times, 28 times, maintaining the “buy” level.

Risk reminders: less market expansion; food safety issues; increased competition in the industry.