The bear's five theorems are preliminarily tested.
We can first test whether the company is "injecting water" from the bear theorem 1 and 2.
Need to compare the increase of operating income, inventory and accounts receivable.
Bear theorem 1
When the company's accounts receivable have increased more than its operating income for two consecutive years, it shows that the company has not made any money, but only received a lot of arrears.
Shuanghui Development is not a water injection company and has passed the test of Xiong Theorem 1.
Bell theorem 2
When the company's inventory has increased more than its operating income for two consecutive years, it shows that there are big problems in the company's operation and the products cannot be sold.
Shuanghui Development passed the test of Bear Theorem 2.
Bell theorem 3
If a company's current liabilities are far greater than its current assets, it means that the company is close to bankruptcy.
The current ratio of Shuanghui Development is maintained at 1-2, and the current assets are sufficient to cover the current liabilities, so there is no bankruptcy risk. Pass the test of Bear Theorem 3.
Bell theorem 4
When the net cash flow of the company's operating activities is greater than the net profit, it shows that the company may have hidden profitability, which may be a gold mine.
The development of Shuanghui accords with Theorem 4, and there may be hidden profits, which need further analysis.
Bell theorem 5
Free cash flow is a measure of the company's real money and silver income, which is more real than net profit and more difficult to falsify.
Free cash flow has always been positive, and it is increasing year by year. With small input and large output, Shuanghui's business development is quite good, which is worth further discussion.
1. Business logic analysis of Shuanghui development
1. What does Shuanghui Development do?
The company's business scope is slaughter and meat processing industry.
2. How to sell Shuanghui development products? To whom?
How to sell: The company and its subsidiaries adopt the unified sales model of meat products and fresh products, and the products produced by each subsidiary are sold to Shuanghui Development or Luohe Shuanghui Food Sales Co., Ltd. (specializing in the sales of fresh frozen meat), and then sold to agents or end customers by the two companies. Products produced by supporting products (such as packaging, printing, cartons, seasonings, commercial pigs, etc.). ) on the one hand, it is sold to the main factory, on the other hand, it is sold to the external market.
To whom: ordinary consumers.
3. Does Shuanghui Development have peers? Who are the peers?
From the following table, we can see the peers of Shuanghui Development: Huatong, Huang, Meat, Golden Ham and Delis.
Through peer comparison in wind, there are the above five companies. From the pie chart above, we can see that Huatong, Long Da Meat and Delix are chosen as the main businesses of each company for comparison, because the proportion of chilled products of these three companies is relatively high.
Second, is there a high return in history?
As can be seen from the above figure, the average market ROE of Shuanghui Development is 27%, the roe of Shuanghui is higher than the average level, and the roe of 10 is higher than 15%, so it can be judged that the company has a high rate of return in history, and there may be some kind of moat.
Third, quantitative analysis+qualitative analysis.
1.？ Quantitative indicator: net business cycle
The net business cycle of Shuanghui Development is lower than that of the other three, and also lower than the average level of the other three.
The net business cycle of Shuanghui Development is decreasing, and its position in upstream and downstream is becoming more and more stable.
It is preliminarily judged that Shuanghui development has brand search advantages and scale effect moat.
? 2. Quantitative indicator: gross profit margin
The gross profit margin data of Shuanghui Development is higher than the average of the four companies, higher than Huatong and Longda Meat, and the gross profit margin of Delix is not much different. The gross profit margin of Shuanghui Development is increasing year by year. It is preliminarily judged that Shuanghui development has cost advantage caused by scale effect.
3. Quantitative indicator: the proportion of three fees.
? The proportion of the three expenses of Shuanghui Development is higher than the four average levels. There is no particularly outstanding advantage in the proportion of three fees.
Through three quantitative indicators, it can be preliminarily judged that Shuanghui has a moat with brand and scale effect, and qualitative analysis is needed.
qualitative analysis
1. Qualitative analysis-brand moat?
Shuanghui Development is the largest meat supplier in China, occupying a large market share. As an ordinary meat product, the price of cold meat must not be too outrageous, so that no consumers will join in, so they do not have the ability to pay a high premium. We care about the price and the brand, so Shuanghui Development has a certain brand search moat.
2. Qualitative analysis-scale effect moat?
① Optimize the process.
Shuanghui development does not have a sustainable low-cost advantage.
② Special geographical location
Shuanghui Development is located in Henan and has no special geographical location.
③ Unique resources
Shuanghui development is the production and processing of meat products and does not have unique resources.
Shuanghui development has certain scale effect and cost advantage of moat, but it is not outstanding. The gross profit margin varies greatly, and the three fees account for a relatively high proportion.
3. Qualitative analysis-conversion cost moat?
Problems to be considered in analyzing the conversion cost of Shuanghui development;
Meat products will be replaced by other brands, so there is no conversion cost moat.
(1) how much is the cost of replacing the product?
Shuanghui Development is a food processing industry that produces raw meat and cold meat. There are no troublesome processes and processing procedures for developing new product types, and it doesn't take much manpower and time to change the process.
② How much risk do you need to take?
Shuanghui's development and production of new products is not risky. The food industry itself needs to develop more products that meet the market demand and meet the market demand without taking too much risk.
③ What are the benefits after replacement?
The developed new products meet the needs of consumers, bring certain economic effects, improve the gross profit margin of sales, and avoid the moat of switching costs.
4. Qualitative analysis-network effect moat?
Shuanghui Development is not a product and enterprise with network effect, and its value will not increase with the increase of users. A moat without network effect. The network effect is ubiquitous in the Internet industry, but generally does not exist in the tangible goods industry. For example, everyone is eating meat products developed by Shuanghui, and you must also eat meat products developed by Shuanghui. If it is replaced by other meat products, it will not be greatly affected, so Shuanghui Development does not have a moat with network effect.
5. Qualitative analysis-patent technology moat?
As can be seen from the above figure, 1. Total investment in R&D accounts for less than 3% of operating income. 2.R&D personnel account for a small proportion of the total number of people in the company, and the technical content of meat products is not high. It can be judged that Shuanghui Development has no patent moat.
6. Qualitative analysis-government authorized moat?
The threshold for the production and operation of meat products is not high, and there is no moat authorized by the government.
Conclusion: Compared with the same industry, Shuanghui Development has no brand premium ability, no patented technology moat, no government-authorized moat, no network effect moat and no conversion cost moat. Have a certain brand search advantage moat and less scale effect growth advantage moat.