Hengshun Vinegar Industry (600305): The new climate is expected to accelerate the reform of Hengshun

Event: The company held an extraordinary general meeting on the 10th, and the resolution was passed. Comrade Hang Zhuhong officially assumed the post of chairman of Hengshun.

In the new climate, the new chairman made his debut.

The new chairman Mr. Hang very much recognized Hengshun’s past development and was confident to continue Hengshun to a higher level.

After more than a month’s work report and investigation, Mr. Hang realized that the existing system problems of Hengshun also faced the pressure of market competition faced by Hengshun.

In the long-term planning of Hengshun, President Hang has obvious strategic plans both internally and externally: insisting on focusing on the main business of condiments, resources and energy will tilt towards the main business.

Internally, it will speed up the mechanism, improve the evaluation mechanism (linked to performance), and internal incentives will be in place to fully stimulate Hengshun people’s fighting power and enthusiasm. Externally, the focus will be on brand building and product structure (focus on vinegar, sauces, and cooking wine.Product portfolio) and marketing channels.

Although the plan has not yet been implemented, it is basically clear enough.

Hengshun’s reform will not be radical and will not be implemented in one step. It will be more gradual and progressive. The company will gradually improve and its performance will gradually be realized.

The national reform is expected to heat up, and Hengshun is expected to break through the constraints of the system and accelerate its progress.

1. This coach change marks the accelerated pace of Hengshun’s national reform. The new chairman’s long-term working experience in government departments will help Hengshun’s design.

2. Hengshun is in the high-quality condiment track, a leading company in vinegar category, with leading product quality and obvious brand advantages.

However, due to institutional constraints, internal incentives were not in place, market construction was insufficient, and performance has been weaker than other industry interventions.

As an opportunity for the chairman to change office, Hengshun gradually accelerated the pace of reform, showed a new mental outlook, and entered a new growth cycle.

Earnings forecasts and investment advice.

With the new chairman in place, it is expected that Hengshun will have a corresponding reform plan in the later stage, which will promote positive incentives for internal management and marketing and accelerate performance. It is expected that the company’s net profit growth rate will increase by 14 in 2019-2021.

4%, +合肥夜网10.

5%, +16.

6%, EPS is 0.

44, 0.

49, 0.

57 yuan, corresponding to PE of 37X, 33X, 29X, maintaining the “hold” level.

Risk warning: the price of raw materials may fluctuate significantly, and the company’s reform progress may exceed expectations.