Event: the company recently released its 2021 report and 22-year quarterly report. In 2021, the income was 4.867 billion yuan, an increase of 19.61%; the net profit of returning to the mother was-989 million yuan, compared with 132 million yuan in the same period last year; and the net profit was-538 million yuan in the same period last year, compared with 87 million yuan in the same period last year. In the first quarter of 2022, revenue was 1.069 billion yuan, same as a decrease of 14.97%; net profit returned to the mother was-148 million yuan, compared with 19.3145 million yuan in the same period last year; operating net cash flow was 100.9 million yuan; and basic earnings per share was-0.17 yuan. The comments are as follows:
The volume of pig-raising business has increased and decreased, and the trend is getting better. In the first quarter, the company put out 335800 live pigs, an increase of 55.01%. Among them, the number of fattening pigs / piglets / breeder pigs was 24.48pm 8.08 / 10200 respectively. At the end of the first quarter, productive biological assets were 173 million yuan, an increase of 3.5% over the end of 2021 and a decrease of 53% over the same period last year. According to the stock situation of pigs and sows, we estimate that the company will produce 130-1.4 million pigs in 2022, an increase of 25%. According to the survey, the comprehensive cost of pig farming in the first quarter was 17.49 yuan / kg, a decrease of about 0.5 yuan / kg compared with the previous quarter. The main reasons for the sinking of breeding cost are as follows: 1) change the production mode, Q4 withdrew from the commissioned farming mode in 21 years, and implemented the integrated mode of self-breeding and self-support; 2) the new production capacity has been completed and put into production one after another, and the utilization rate of production capacity has been improved. 3) eliminate inefficient sows and improve production efficiency. It is expected that in the second quarter and the second half of the year, with the improvement of management and information level, the company's breeding cost will further sink.
The feed business grew steadily. In the first quarter of 2022, the external sales of the feed business were 147000 tons, compared with 138000 tons in the same period last year, an increase of 7 percent, and the industry grew by 1.6 percent. According to a simple calculation, the net profit of the feed business is 14.9 million yuan, the profit per ton is about 101 yuan, and the profit per ton last year is about 105 yuan, which is basically the same.
The three expenses fell significantly compared with the same period last year, making the performance better than expected. 22/Q1, the management fee is 55.6215 million yuan, which is the same as the decrease of 60.84%. The decrease in management costs is mainly due to the improvement of management level and the reduction of institutions and personnel as well as equity incentive fees. In addition, the sales / R & D expenses were 13800.1576, with a decrease of 11.14% and 31.48% respectively; the financial expenses were 30.43 million yuan, an increase of 0.99%; and the three expenses totaled 115.6246 million yuan, a decrease of 95.0805 million yuan compared with the same period last year. The rate of three items of expenses was 16.37%, down 9.83 percentage points from the same period last year.
The company focuses on farming, mode advantages and cost advantages gradually accumulate, market share or steady increase, recommended to buy. Recently, the company successfully divested the non-main business assets such as Ying Hua Xun Fang and Huayang Motor Insurance, and effectively disposed of most of the goodwill risks. As of the end of 21/Q4, the book value of goodwill was 98.29 million yuan, down 67% from the previous quarter. It is expected that by the end of 22/Q2, due to the completion of delivery of assets such as Huayang Motor Insurance, the book value of goodwill will continue to decline significantly, and future performance growth will no longer be affected by goodwill. The company focuses on "breeding + feed". We are optimistic about its new building culture model and its advantages in breeding resources, building culture and management improvement, and the cost advantage will gradually expand in the future. We expect pig prices to enter the upward cycle in the second half of 2022, and the company's breeding business will fully benefit from this, performance flexibility will be shown, and "buy" will be given.
Rating. It is estimated that the company will produce 1.35 million pigs in 22x23, with a net profit of 1.39 / 590 million yuan. According to the 23-year performance, it will be given 12 times PE, and the target price for the next year is 10.24 yuan, which is 65% away from the current price.
Risk hint: the price trend of live pigs is not as expected, and the progress of the project is not as expected.