Sow population to achieve reproduction, feed, animal protection business steady growth, maintain the "buy" rating Tiankang Biological release 2021 annual report and 2022 quarterly report: the company's 2021 revenue of 15.744 billion yuan (+ 31.35%), maternal net profit of-686 million yuan (- 139.87%); company 2022Q1 revenue of 3.392 billion yuan (+ 1.58%), maternal net profit of-70 million yuan (- 123.12%). The decline in pig prices is a drag on the company's short-term operating performance, and the cost of pig seedlings in 2022Q1 Company has decreased, but the pig price is still relatively low and the forecast for 2022 has been lowered. It is expected that pig prices will start to rise in 2022Q2, raising the forecast for 2023 and adding the forecast for 2024. The company is expected to achieve a net profit of 2.88 billion yuan 17.04 trillion in 2022-2024 (1.31 billion yuan in 2022-2023), corresponding to 0.21 pm 1.26 pm in EPS and 7.4 times in PE corresponding to the current stock price. The cost of pig production in Henan and Gansu has declined steadily, maintaining a "buy" rating.
Piglet fattening increases the company's production cost in 2021, and Gansu and Henan will achieve batch production of 1.6033 million pigs (+ 19.20%) in 2022Q2 in 2021. The loss of breeding business is about 1.21 billion yuan (including a small number of cattle and sheep breeding), including 220 million yuan of asset impairment provision. Since the second half of 2021, the company has gradually shrunk the breeding scale of the feed division, and the company has stopped purchasing piglets from the feed division in 2022. In 2022 and in the future, the fattening column of the company will turn to self-breeding production dominated by Xinjiang, Gansu and Henan, and 2021Q1 will produce 376900 pigs (+ 6.47%). It is expected that the breeding capacity of 2022Q2 in Henan and Gansu will achieve normal batches of pigs, and the cost will be significantly reduced. By the end of 2021 and the end of January 2022, the company has a production capacity of 120000 sows and a PSY of about 22, to support the company's target of 2.2 million pigs in 2022.
The growth of feed and other businesses is steady, and the company's own abundant reserves support the expansion of bottom breeding capacity. In 2021, the company's feed business income was 5.135 billion yuan (+ 21.83%), with a net profit of about 249 million yuan. Annual feed sales of 2.3125 million tons (+ 21.08%) Pig feed, ruminant feed and poultry feed were sold respectively 127.91x45.43 / 458000 tons, with year-on-year changes of + 52.09%, 27.22% and 23.60% respectively. In 2021, the company made a profit of 247 million yuan for animal vaccine and about 91 million yuan for cottonseed processing and corn collection and storage business. By the end of the 2021 reporting period, the company's book currency capital was 3.424 billion yuan (+ 63.64%), and the asset-liability ratio was 54.71% (- 1.63pct). At the bottom of the cycle, abundant cash reserves and low debt ratio supported the company to achieve counter-cyclical scale expansion.
Risk tips: the decline in the price of feed raw materials, the length of loss cycle in pig breeding industry, and so on.