Events:

The company released a third-quarter report: revenue in the first three quarters of 2021 was 3.376 billion yuan, an increase of 1.39% over the same period last year; the net loss of homing was 106 million yuan, a reduction of 76.70% over the same period last year. Revenue in the third quarter was 1.15 billion yuan, down 10.91% from the same period last year, while net profit from home was 30.42 million yuan, up 115.59% from the same period last year.

Main points of investment:

The prosperity of global aquatic products has increased, and the company has greatly reduced its losses compared with the same period last year.

In terms of income statement, the company's revenue in the first three quarters of 2021 was 3.376 billion yuan, an increase of 1.39% over the same period last year; the net loss was 106 million yuan, a substantial reduction of 349 million yuan compared with the same period last year, while Q3 made a profit of 30.42 million yuan in a single quarter.

The main reason is that global aquatic prices, especially salmon prices rebounded during the reporting period, subsidiary A.S. The cumulative net profit turned from loss to profit, reaching 48.4938 million yuan, of which Q3 realized a net profit of 87.6985 million yuan.

The gross profit of the company has changed from negative to positive, and the gross profit margin of Q3 company has returned to 21.9%.

Salmon industry supply and demand tight balance, the market space is far more than 100 billion, long-term fish prices fluctuate upward.

From the supply side, salmon culture is subject to license restrictions, and the future growth rate on the supply side is expected to be only 4%. On the demand side, demand for salmon recovered rapidly after the epidemic. The price of whole 5kg fish reached an all-time high in June this year, and it was still close to 6 euros / kg in October. According to the global sales volume of 2.5 million tons in 2020, the sales volume exceeds 100 billion. Before the epidemic, domestic consumption grew by more than 30%. Driven by domestic growth, global consumption is expected to grow by more than 7% in the next decade, and the salmon industry has been in a tight balance between supply and demand for a long time.

The company continues to open up the domestic market and is expected to further reduce costs and increase efficiency in the future.

In August 2020, the company officially launched the "Jiawo Xiansheng" brand for C-end. Since the beginning of this year, the company has launched the highly nutritious children's food brand "Chanxiong" for mother and child customers. the first batch of new products such as "fresh Sauce of Salmon", "Atlantic Real Cod" and "Arctic Sweet Shrimp" have been sold on e-commerce platforms such as Tmall and JD.com. During the reporting period, the company continued to invest in the fishing ground processing plant in District 12 of Chile, which is the first large-scale processing plant in District 12, which is expected to further reduce cost and increase efficiency after completion.

Earnings Forecast, valuation and rating

Maintain the prediction of EBITDA 5.45max 7.77 / 1.096 billion yuan, EV/EBITDA is 18.79x/13.61x/9.63x. Considering the two methods of EV/EBITDA and PE, and referring to the average valuation level of the comparable company for 23 years, the company's target price is 34.9 yuan, maintaining the "buy" rating.

Risk hint

Natural disaster risk; exchange rate fluctuation risk; food safety risk