Summary of the report
Events:
Zhengbang Technology released its annual report of 2021 and quarterly report of 2022. The company achieved revenue of 47.67 billion yuan (- 3.04%) in 2021, net profit of-18.819 billion yuan (- 427.62%), operating income of 6.49 billion yuan (- 48.92%) and net profit of-2.433 billion yuan (- 1249.73%) in the first quarter of 2022.
Key points of data:
Pig prices are in the doldrums and performance is down. The company achieved revenue of 47.67 billion yuan in 2021, a decrease of 3.04% over the same period last year. The company takes pig farming as its core business, which is affected by the downturn in pig prices in 2021. The revenue of this business segment is 28.955 billion yuan, down 16.88% from the same period last year, accounting for 60.74%.
Feed income reached 16.48 billion yuan, an increase of 20.73% over the same period last year, accounting for 34.57%. In addition, the company independently developed, produced and sold veterinary drug products, with revenue of 186 million yuan, an increase of 97.56% over the same period last year. From a regional point of view, the company's main business is concentrated in the southern area, accounting for a relatively high proportion of revenue, reaching 54.4%.
The feed business is developing steadily. In 2021, the company sold a total of 4.8194 million tons of feed, an increase of 6.33% over the same period last year, of which pig feed sales were 2.6316 million tons, an increase of 11.91% over the same period last year. Due to the effective release of pig production capacity in that year, and the company's technological advantages in preventing and controlling African classical swine fever, pig feed sales have increased under the influence of providing good technical support for large-scale farmers. Poultry sales were 1.8444 million tons, the same as last year. The strategic positioning of the company's feed business sector is to support the development of the main business, and its operation is relatively sound in recent years.
Light travel, production capacity optimization and upgrading. In 2021, the company sold 14.9267 million pigs, an increase of 56.14% over the same period last year, ranking at the forefront of A-share pig breeding listed companies. The company sold 2.4261 million live pigs in the first quarter of 2022, down 5.91% from the same period last year. In terms of production capacity, the company currently has a production capacity of about 2.2 million sows. Faced with the depressed trend of pig prices in 2021, the company adjusted its development strategy from large-scale expansion to improving quality and efficiency. Active compression can expand the size of the reserve population, eliminate inefficient sows, and improve the population efficiency. At the end of 2021, the productive biological assets were 2.397 billion yuan, down 73.68% from the same period at the beginning of the year, and 380000 sows could be bred by the end of the first quarter. In addition, the company cleared the inefficient and uneconomical rental fields, and cancelled some uneconomical construction capacity, and further optimized and upgraded the production capacity. In terms of cost, the complete fattening cost of the company in the first quarter is about 20 yuan / kg, excluding the four fees, the breeding cost is 16.45 yuan / kg, the cost is expected to be further reduced.
Multi-channel financing to ensure stable capital flow, this round of pig cycle is expected to hit bottom rebound. The price of live pigs in the domestic market remains low, and the company's performance is greatly affected. In terms of capital reserves, by the end of the first quarter of 2022, the company's monetary funds were 3.073 billion yuan, a decrease of 40.14% compared with the end of 2021. The company has continuously deepened cooperation with a number of financial institutions across the country. at present, financing channels mainly include bank financing, asset market financing, special capital support, issuing bonds, activating assets and so on, to provide a certain supplement to cash flow. By the end of the first quarter of 2022, the total credit granted by the company's banks was 25.4 billion, of which 7.1 billion were unused.
In addition, as the largest private enterprise in Jiangxi Province, recently, relevant departments, institutions and investment platform companies in Jiangxi Province have provided financial support and relevant policy support to the company to ensure the stability of the cash flow needed in the process of development, so as to help the company smoothly through this round of pig cycle and achieve sustainable development. At present, the company's cash flow pressure is gradually decreasing, with the second half of the pig cycle inflection point approaching, Zhengbang science and technology stocks and the corresponding convertible bonds are expected to rebound at the bottom.
Risk Tips:
The number of pigs is less than the expected risk.
The spread of the domestic epidemic has intensified.
The animal epidemic broke out.
