The event company released its half-yearly report for 2022.
22Q2 revenue growth accelerated, the performance basically break even 2022H1 company achieved revenue of 1.628 billion yuan, + 16.71% year-on-year, of which chilled, live poultry contributed income of 980 million yuan, 410 million yuan, + 16.91%, + 21.83%. The net profit of the company is 5 million yuan, + 196.54% compared with the same period last year, and the net profit is-3 million yuan, + 77.02% compared with the same period last year. The comprehensive gross profit margin is 15.97%, year-on-year-1.31pct. The expenditure rate during the period was 15.62%, year-on-year-2.08pct, of which the financial expenses were + 111.73% compared with the same period last year, resulting from the increase in borrowing and the issuance of convertible bonds, resulting in an increase in interest expenses; and + 80.12% in R & D expenses, resulting from the company's increased research and development of its own breeds of poultry. 22Q2, the company achieved revenue of 844 million yuan, year-on-year + 26.15%; return-7 million yuan, year-on-year + 48.49%; deduction of non-return net profit-11 million yuan, year-on-year + 47.56%; sales gross profit 12.97%, year-on-year-2.04 pct; period expense rate is 13.61%, year-on-year-3.03pct.
The gross profit margin of the chilled business has increased, and the price of yellow chicken has increased the profitability. The gross profit margin of 2022H1's chilled business is 26.52%, which is + 3.92pct compared with the same period last year. The loss of the live poultry business (gross profit margin-5.01%) is related to the large increase in the price of feed raw materials. 2022H1 estimated that the number of yellow-feathered broilers in China was 1.82 billion and the meat yield was 2.88 million tons, and the average selling price and average cost of hairy chickens were 15.96 yuan / kg and 15.68 yuan / kg, respectively. From the perspective of industry production capacity, 22H1 yellow chickens in the birth of parents decreased from 14.3561 million sets of breeder chickens to 13.7537 million sets, and showed a continuous downward trend in July. The relationship between supply and demand of yellow chicken industry continues to improve. According to Xinmu statistics, the monthly average price of multi-species yellow chicken in August 22 is 16.1 yuan / kg. We continue to be optimistic about the price trend of yellow chicken in the second half of the year.
The chilled marketing model is mature and stable, and convertible bonds help expand production capacity. 2022H1's chilled business accounts for 60.22% of revenue, which is the main contribution to the company's gross profit. The company early layout of chilled poultry market, actively explore the sales model of chilled products, has been in a leading position in the industry.
The company's sales network covers 28 provinces, cities and regions, including Beijing, Shanghai, Hunan, Guangdong, etc., and establishes chilled self-operated counters with Yonghui supermarket, Carrefour, Auchan, Da Runfa and other large supermarket groups. it has also established strategic cooperation relations with new retail giants such as Hema Xiansheng and Dingdong (Cayman) Limited, forming a cold chain logistics and distribution system in large and medium-sized cities along the Yangtze River and a chilled network layout along the Beijing-Zhuhai Expressway.
In addition, the 640 million RMB convertible bonds issued by the company were listed on June 10, and the funds raised were mainly invested in 13.5 million high-quality chicken standardized breeding base projects and 10,000 breeding pig breeding base projects, which are already under construction and will effectively promote the further expansion of the company's production capacity and boost performance growth.
The investment suggestion company is the leader of yellow feather chicken breeding in central China, which is committed to the production and sales of chilled meat poultry; with the elimination of production capacity of yellow feather chicken industry, the price of yellow chicken shows an upward trend, and the gross profit margin of the company's products will significantly benefit from the price increase. We estimate that the EPS from 2022 to 2023 will be 1.57 yuan and 5.71 yuan respectively, corresponding to 25 times and 7 times of PE, maintaining the "recommended" rating.
The risk indicates the risk of animal diseases and natural disasters, the risk of raw material supply and price fluctuation, the risk of meat and poultry price fluctuation, the risk of food safety, etc.