Events:

Minhe shares released three quarterly results: the operating income in the first three quarters of 2021 was 1.452 billion yuan, an increase of 12.57% over the same period last year, and the net profit was 166 million yuan, an increase of 111.4% over the same period last year. Among them, the operating income in the third quarter was 404 million yuan, an increase of 4.17% over the same period last year. The net profit was-3.7141 million yuan, compared with a loss of 154 million yuan in the same period last year.

Main points of investment:

The price of Q3 seedlings is down, and the performance is under pressure. In the first three quarters of 2021, the operating income was 1.452 billion yuan (+ 12.57% compared with the same period last year), and the net profit was 166 million yuan (+ 111.4% compared with the same period last year). Of this total, the operating income of Q3 was 404 million yuan, up 4.17% from the same period last year, the net profit was-3.7141 million yuan, and the loss narrowed by 97.58% over the same period last year. During the reporting period, the sales prices of H1 company's main products, acting chicken seedlings, rose greatly compared with the same period last year, with revenue growth and profit increase; as chicken seedling prices began to fall at the end of the third quarter, the company reduced the value of all kinds of assets by 37.684 million yuan. The terminal products of the poultry industry chain remain weak, and the loss of commodity generation farming continues to expand, which may further affect its willingness to make up the fence and put pressure on the price of chicken seedlings, and the follow-up performance still needs to observe the recovery of demand.

The slaughtering deep processing plate accelerates the development, the product structure optimizes unceasingly. At present, the company has two cooked food projects under construction with a production capacity of 30,000 tons, of which Weifang cooked food project is expected to be trial-produced in October and Penglai cooked food project is expected to be trial-produced by the end of the year. The follow-up sales of cooked food will rely on the existing raw food sales channels and customers to expand and develop, focusing on fast food chain enterprises and suppliers at the initial stage, while promoting product export and exploring consumer channel construction and brand promotion. extend the company's industrial chain layout, broaden the company's product structure, and enhance the company's profitability.

Profit forecasts and investment ratings are covered for the first time. We estimate that the revenue from 2021 to 2023 will be 1.77 billion yuan, 2.61 billion yuan, 1.04 billion yuan, 1.23 yuan and 13.53 times, respectively, respectively, and the net profit will be 1.08 billion yuan, 1.4 billion yuan, 1.23 yuan and 13.53 times, respectively, and the corresponding PE will be rated as "overweight".

The risk indicates the risk that the project progress is not as expected; the industry prosperity continues to decline; the company's performance does not meet expectations and other risks.