Event
According to the 2021 annual report and the first quarterly report of 2022, the company realized revenue of 18.038 billion yuan in 2021, an increase of 56.62% over the same period last year, and its net profit was-1.52 billion yuan, down 365.25% from the same period last year. Ting 2022Q1 achieved revenue of 4.155 billion yuan, an increase of 6.71% over the same period last year, and its net profit was-352 million yuan, down 317.06% from the same period last year.
Brief comment
1. Revenue keeps growing and profits decline as a result of farming losses.
In 2021, the company achieved revenue of 18.038 billion yuan (year-on-year + 56.62%), of which the feed and animal protection industry earned 10.164 billion yuan (year-on-year + 55.36%), pig farming 3.734 billion yuan (year-on-year + 18.96%), trade income 2.197 billion yuan (year-on-year + 55.58%), food and slaughtering 1.912 billion yuan (year-on-year + 374.01%). The net profit of the mother is-1.52 billion yuan (year-on-year-365.25%). The decline in profit is mainly due to the sharp drop in pig prices compared with the previous year, the rise in the price of feed raw materials, the company's pig industry is in the process of rapid development, and the breeding capacity has not fully reached production and fixed expenses are shared much. resulting in high short-term costs, large losses in the breeding sector; the elimination of a large number of inefficient sows in this period. In 2021, the company set aside 457 million yuan for asset impairment loss, of which 300 million yuan was prepared for inventory decline in the breeding sector (mainly commercial piglets and fattening pigs). 2022Q1 achieved revenue of 4.155 billion yuan (year-on-year + 6.71%) and net profit of-352 million yuan (year-on-year-317.06%).
In terms of profit margin, the company's overall sales margin in 2021 was 1.43% (year-15.83pcts), including feed and animal protection 6.23% (year-0.05pcts), pig farming-13.05% (year-60.80pcts), trade margin-0.93% (year-3.14pcts), food margin 6.45% (year-3.17pcts). The company's net profit rate on sales is-10.26% (year-on-year-18.89pcts). 2022Q1's gross profit margin on sales is-1.94% (year-on-year-18.02pcts, month-on-month + 6.32pcts) and net sales margin is-11.70% (year-on-year-19.54pcts, month-on-month + 15.59pcts).
In terms of expenses, the company's sales expenses in 2021 were 338 million yuan (year-on-year + 37.03%), mainly due to the increase in sales staff and staff salaries; management expenses 609 million yuan (year-on-year + 40.77%), mainly due to the increase in staff salaries and depreciation amortization; R & D expenses 114 million yuan (year-on-year + 74.23%), mainly due to the growth of R & D projects, the salary of R & D personnel and the cost of R & D consumables The financial cost is 432 million yuan (+ 141.11% compared with the same period last year), which is mainly due to the increase in the financing scale of the company and the adoption of new leasing standards. The sales / management / R & D / financial expenses of 2022Q1 are 0.89, 1.54, 0.33, respectively, 146 million yuan, respectively, compared with the same period last year, + 22.34%, 58.58, 58.58, 67.02, respectively.
2. Feed sales are growing steadily and production capacity reserves are sufficient.
In 2021, the company achieved feed sales of 2.8408 million tons (+ 36.48% compared with the same period last year), mainly due to the rapid growth of aquatic products and pig feed. By category, pig feed sales are 1.6865 million tons (year-on-year + 66.42%), poultry feed sales are 733800 tons (year-on-year-9.72%), and other materials sales are 420400 tons (year-on-year + 64.72%). At present, the company has a feed production capacity of more than 7 million tons, capacity reserves are relatively sufficient, the company's 2022 feed sales target of 4 million tons.
3. The number of live pigs has increased greatly, and the cost is expected to decline marginally.
In 2021, the company produced 3.2459 million pigs (+ 141.10% compared with the same period last year), mainly because the company's new pig farms were put into production one after another, and the production capacity was gradually released. In terms of column structure, in 2021, the proportion of piglets and fattening pigs was about 58.30% and 40.61%, respectively. In the first quarter of 2022, the company sold 1.0468 million live pigs (+ 95.81% compared with the same period last year). As of 2022Q1, the company has 1.8922 million live pigs, an increase of 47.88 percent over the same period last year and 5.56 percent more than at the end of 2021. The stock of sows exceeds 320000. At present, the company has plenty of production capacity for breeding sows, with a target of 5.5 million in 2022, and fattening pigs are expected to account for about 50%.
The cost margin of the company has improved. By the end of February 2022, the cost of weaned piglets has dropped to less than 450 yuan per piglet. With the increase of the full yield of sow farms and the optimization of pig performance, the cost of weaned piglets is expected to reach 350 yuan per piglet. The fattening end cost of the company in 2022 is 16 yuan / kg. In March 2022, the survival rate of the pig breeding room of the company is 94% Mel 95%, and the overall survival rate of fattening is about 91%. With the gradual improvement of the company's management capacity, the production index is expected to be further optimized.
4. The structure of assets and liabilities is expected to be optimized and the situation of cash reserves will be improved.
In terms of major asset indicators, by the end of March 2022, the company's fixed assets were 5.727 billion yuan (down 0.24% from the end of 2021), construction under construction was 1.3 billion yuan (up 0.93% from the end of 2021), and productive biological assets were 1.088 billion yuan (down 9.03% from the end of 2021). Mainly because the company eliminated some inefficient sows; as a whole, the company suspended the pace of expansion during the breeding downturn. In terms of debt indicators, by the end of the first quarter of 2022, the company had borrowed 3.787 billion yuan in short-term loans (an increase of 3.64 percent over the end of 2021) and 4.032 billion yuan in accounts and bills payable (an increase of 3.07 percent over the end of 2021). At the end of the first quarter, the company's asset-liability ratio was 89.92%. At present, the company is in the stage of rapid development, and the asset-liability ratio is relatively high. It is expected that the asset-liability structure will be optimized in the future. In terms of capital reserves, the company's currency funds were 537 million yuan at the end of the first quarter (down 1.10% from the end of 2021), and 1.433 billion yuan was raised by non-public offerings in April.
5. Profit forecast: the revenue of the pig breeding plate increases with the increase of the number of pigs and the rise of pig prices, and the profit end increases with the decrease of costs and the rebound of pig prices. The loss is expected to decrease in 2022, and the plate is expected to turn losses into profits with the rise of pig prices; the growth of feed sales leads to an increase in plate revenue, and the company actively implements measures such as raw material substitution to achieve a reduction in unit cost and an improvement in gross profit margin. Taken into account, the company's revenue from 2022 to 2024 is expected to be 245.433,326.11 yuan, the net profit of return to the mother is-5.73 million, 7.10 billion, and EPS is-0.84, 1.04 and 2.57 respectively, maintaining the "overweight" rating.
Risk tips: livestock and poultry disease risk, main raw material price fluctuation risk, pig price fluctuation risk, high asset-liability ratio risk, large risk of accounts receivable, external guarantee and so on.