Pig output continues to grow high, feed business volume and price are under pressure, and the "buy" rating is maintained.
Aonong released its semi-annual report of 2022, with revenue of 8.817 billion yuan (+ 7.27%) and net profit of-677 million yuan (- 316.18%) in the first half of the year. Q2 alone realized revenue of 4.662 billion yuan (+ 7.78%) and net profit of-325 million yuan (- 0.13%). Pig prices began to rise in April, and the company's Q1 inventory decline is prepared to return or resell 248 million yuan in Q2. Taking into account the high pig prices in July-August and the further upward trend, we raised the company's 2022 profit forecast to maintain the 2023-2024 profit forecast. It is estimated that the company's 2022-2024 net profit will be 0.75pm 19.85pm 2.398 billion yuan (the previous forecast is-7.77max 19.85max 2.398 billion yuan), and the EPS is 0.092.28pm 2.75 yuan respectively. The current share price corresponds to the PE of 235.1 and 8.9, respectively. As pig prices pick up, company costs enter a downward channel and maintain a "buy" rating.
Breeding and slaughtering business: pig production continued high growth, food plate slaughtering allocation rate increased pig farming: 2022H1 company produced 2.3439 million pigs (+ 86.14%), income 1.948 billion yuan (- 9.03%). Affected by the downturn in pig prices. As of the end of the reporting period, the company kept 2.0003 million live pigs (+ 28.69%), of which about 270000 were able to breed and about 70,000 were reserved. Food business: 2022H1 food plate slaughtered 352700 live pigs (+ 82.76%), slaughtering and breeding ratio has reached 15%; food plate live pig trade volume of 2857 million (1392.58%), food sector total revenue of 1.24 billion yuan (+ 76.39%).
The upward rise of raw materials weakens the profitability of the feed business, and the company's debt pressure is expected to be reduced in the second half of the year. During the reporting period, the company's feed business achieved an income of 5.022 billion yuan (+ 11.11%) and a total sales volume of 1.3217 million tons (+ 3.50%). Among them, the sales of pig feed, poultry feed and other feed (aquatic materials, ruminants and others) were 77.22 pounds, 337,521 tons respectively. Year-on-year changes + 1.15% Universe 6.02% Candle 37.19% respectively. During the reporting period, the price of feed raw materials rose, and the gross profit of the company's feed business decreased 1.28pct to 4.50% compared with the same period last year, but the comprehensive advantage of the feed business was improved, and the growth rate of 2022H1's pig feed and aquatic feed sales exceeded that of the industry. In April 2022, the company successfully raised an additional 1.433 billion yuan and accelerated the repayment of some interest-bearing liabilities. By the end of the reporting period, the company's asset-liability ratio was 84.30%, a month-on-month decline of 5.62pct. With the rising pig prices, the company's financial pressure is expected to be significantly alleviated in the second half of the year.
Risk tips: the number of live pigs is less than expected, the loss of pig farming industry is longer than expected, and so on.