This report is read as follows:
We will continue to promote the optimization of production capacity and farmers, and take more measures to ease the financial pressure. The production capacity of original pigs is released, the cost of piglets is reduced and the breeding efficiency is improved. the cost is expected to decrease further in the future, and the flexibility is expected.
Events:
In November 2021, 1.0038 million live pigs (including 113000 piglets and 890800 commercial pigs) were sold, with a month-on-month ratio of-21.72%, a year-on-year ratio of-4.87%; sales revenue of 1.348 billion yuan, a month-on-month ratio of-5.97%, a year-on-year ratio of-64.79%. The average selling price of commercial pigs is 14.86yuan / kg, and the average weight is 100.73 kg / head. In the first 11 months of 2021, a total of 14.1215 million live pigs were sold, + 71.84% compared with the same period last year, and the cumulative sales revenue was 28.422 billion yuan,-8.17% compared with the same period last year.
Comments:
Maintain the "overweight" rating, maintain the profit forecast and target price. We maintain the company's EPS of-2.85,0.31 and 0.99 yuan per share from 2021 to 2023, maintain the company's target price of 22.58 yuan and maintain the "overweight" rating.
The optimization of production capacity continued, and the efficiency of culture continued to improve. The company continued to clear the lease farm in November, and some pigs were listed in advance, resulting in light weight and low price of pigs in November. Q4 company continued to eliminate backward sow production capacity, continue to promote farmers' optimization work, and reduce the proportion of backward production capacity. The overall breeding efficiency and capacity utilization rate are expected to continue to improve.
The company has taken more measures to alleviate the financial pressure, and the cash flow situation has improved. On November 18, Bank of China Ltd. provided Zhengbang Group with bank credit of no more than 10 billion yuan. recently, the company's major shareholders will also use market-oriented debt-to-equity swap with Cinda Capital Management to further reduce the shareholder pledge rate, and the company's cash flow situation will be significantly improved. Enough to support the company through the cold winter of the industry.
The aquaculture efficiency is expected to exceed expectations in 2022, and the cost will further decline in the future. The foreign original pigs imported by the company began to release production capacity in 2020, which is expected to bring about a reduction in piglet costs and an increase in fattening efficiency. The reduction in piglet costs alone is expected to lead to a reduction in the complete cost of raising 22.5 yuan / kg. It is expected that the fattening cost of the company will decline rapidly in 2022.
Risk tips: feed raw material price fluctuations, breeding cycle fluctuations and other risks.