2021H1 revenue growth, profits are under pressure due to the decline in pig prices.
The company's 21H1 revenue reached 26.68 billion yuan, + 61% compared with the same period last year, and the net profit lost 1.43 billion yuan,-159% compared with the same period last year. 21Q2's revenue reached 13.97 billion yuan, + 48% compared with the same period last year, while its net profit lost 1.64 billion yuan,-207% compared with the same period last year. The performance end of the company is obviously under pressure due to the decline in pig prices, but while keeping the lead in the industry, the average profit level is also ahead of its peers, and the competitive advantage is highlighted.
Pig fencing to maintain high-speed growth, piglet cost advantage gradually revealed that the company 21H1 achieved live pig fencing of 6.9968 million, + 157% year-on-year, ranking second among listed companies, of which 21Q2 achieved live pig fencing of 4.4181 million, month-on-month ratio of + 71%, year-on-year + 163%, and continued to maintain high-speed growth. At the same time, the pig breeding cost of the company in the second quarter was significantly lower than that in the first quarter, mainly due to the continuous optimization of pig breeding structure. The company not only completed the overseas introduction of 11120 high-quality breeding pigs in the first half of 2021, but also completed the elimination of inefficient sows. Population efficiency has been greatly improved. The first batch of breeding pigs introduced in March 2020 successfully gave birth in November 2020, with an average litter size of 16 per child, with a maximum of 18,19. It is expected that with the breeding of overseas pigs, the efficiency advantage of breeding pigs will be shown season by season at the cost end of piglets in the future.
Cost control strategy is very effective, fine management system construction steadily promote pig prices into the downward period, the company will take cost control as the strategic core. On the one hand, the company's production management ideas have been transformed from agriculture to industrialization, and four APP of Bang Fanbao, Bang Yangbao, Bang Caibao and Bang Jianbao have been developed, summed up more than 300 key points of pig production, collected into the information system, and formulated a landing plan according to the specific conditions of each pig farm, supplemented by background control to ensure that the program is implemented in place and move forward to intelligent farming in an orderly manner. On the other hand, the company attaches great importance to the strengthening of the standardized and procedural biosafety prevention and control system. In the domestic environment of non-plague epidemic, the fattening survival rate of 21Q2 Company is significantly better than that of 21Q1, thus ensuring a stable growth. In addition, under the background of the high price of feed raw materials, the company relies on the formula cost early warning and timely adjustment intelligent system to achieve effective feed cost control.
Risk tips: uncontrollable pig epidemic risk of death, rising food prices bring feed cost pressure.
Investment advice: pig farming pioneer, reduce cost and increase efficiency to verify quarterly, maintain "buy"
Due to the decline in pig prices and the longer-than-expected duration of the downturn in the second quarter of this year, the company's 21H1 commodity pig average price was-33% year-on-year, which put pressure on the performance. Therefore, we downgrade our profit forecast. It is estimated that the net profit for 21-23 years will be 8.492 billion yuan for return to the mother-24.97pm, and the EPS will be-0.32Unix 0.79max 2.70 yuan. The PE is-26.6 shock 10.8 shock 3.2x (the original forecast for 21-23 year net return to mother is 54.73 billion, EPS is 1.74 2.07, PE is 4.9), maintaining the "buy". The net profit from mother to mother is 54.73 million, EPS is 1.74, 2.07 and 2.4X respectively, and the net return to mother is estimated to be 54.73 million yuan, 1.74 billion, 3.51 and 2.4X, respectively.