Core viewpoints
Event: the company released its annual report of 2021 and quarterly report of 2022, with an annual operating income of 18.04 billion yuan, + 56.6% compared with the same period last year, and a net profit of-1.52 billion yuan,-365.3% compared with the same period last year. In the first quarter of 2022, the operating income was 4.16 billion yuan, + 6.7% compared with the same period last year, and the net profit was-350 million yuan,-317.1% compared with the same period last year.
The release of production capacity, a substantial increase in the column. As the company's new pig farms have been put into use and production capacity has been released, the number of live pigs has increased significantly. The number of live pigs in 2021 was 3.2459 million, which was + 141.1% compared with the same period last year. Piglets accounted for about 58.3%, and fattening pigs accounted for about 40.61%. The number of live pigs in the first quarter of 2022 was 1.0468 million, which was + 95.81% compared with the same period last year, continuing the high growth trend. At present, the company already has a certain breeding scale, the production capacity of fixed assets and the stock scale of breeding sows have the basis to support the further growth of the scale of sows, and the company strives to reach the target of 5.5 million in 2022 and 10 million in 2024. As the scale of production capacity gradually stabilizes, the company's pig breeding industry will shift from the "quantity" stage to the "quality improvement" stage. From the performance level, the net profit in the first quarter of the overall downturn in pig prices is significantly better than that in the fourth quarter of 2021, reflecting the initial results of cost reduction and efficiency improvement. The company's goal is to make the fattening cost down to 16 yuan / kg.
Feed quantity, supporting business steady progress. 1) in feed, the company's sales volume increased significantly in 2021, realizing 2.8408 million tons of feed sales, + 36.5% year-on-year, 1.6865 million tons of pig feed, + 66.42% year-on-year; 733800 tons of poultry feed,-9.72% year-on-year; sales of other materials (aquatic materials, ruminants and other materials) were 420400 tons, + 64.72% compared with the same period last year. At present, the company has a feed production capacity of more than 7 million tons, with an operating target of 4 million tons in 2022, with a target growth rate of + 40.8%. The company's short-term goal of feed business is to export more than 5 million tons and the medium-term target is 10 million tons. 2) in terms of animal protection, the company achieved some results in expanding aquatic animal protection in 2021, so that the overall income of animal insurance increased by 26.62 to 33.8728 million yuan, with a gross profit margin of 42.67%, which was + 0.08pct compared with the same period last year. 3) in terms of slaughtering and food, the company acquired a new slaughtering enterprise in 2021 and began to set up pork sales and segmentation centers in key areas of the country. the annual slaughtering income has reached 1.91 billion yuan, an increase of 374.01% over the same period last year.
Profit forecast and investment suggestion
Considering the high increase in raw material prices in the first half of the year, it is expected that the cost center for the whole year will move up, and the forecast of output, feed price and the proportion of pigs eliminated will be lowered according to the annual report, so that the profit forecast for 2022-2023 will be lowered. The company is expected to achieve net profit of-5.70,15.09 and 399 million in 2022-2024 (originally forecast 22-23-4.47, 1.631 billion). Year-on-year + 62.5%, 364.9%,-73.6% respectively, maintaining the comparable company valuation level of the previous reference, giving 23-year 11xPE, the target price of 23.93 yuan, maintaining the "buy" rating.
Risk tips: epidemic risk, pig price fluctuation risk, cash flow risk, raw material price fluctuation risk, food safety risk and so on.