Event
On August 26, Jiawo Food released the "2022 semi-Annual report". The revenue in the first half of 2022 was 2.386 billion yuan, an increase of 7.14 percent over the same period last year, and the net profit of returning home was 155 million yuan, a sharp increase of 213.60 percent over the same period last year.
Comment
Fish prices rose rapidly in the first half of the year, and the profitability of subsidiaries increased significantly. Overall, the company's return net profit improved significantly in the first half of 2022, mainly due to the rapid rise in salmon prices in the first half of the year under the tight balance between supply and demand. The 2022H1 price of salmon is 7.05 US dollars / kg (year-on-year + 46.88%). The fair value change income of 2022H1's expendable biological assets was 208 million yuan, of which the profit and loss of 2022Q2 fair value change was 42 million yuan, a decrease of 74.83% compared with the first quarter, mainly due to the decrease in salmon price growth in the second quarter. In the first half of 2022, Australis realized salmon sales of 35932 tons of WFE (year-on-year-22%), sales revenue of 1.684 billion yuan (+ 10% year-on-year), net profit of 317 million yuan (year-on-year + 1427%) and gross profit of 19.90% (year-on-year + 20.92pct). The decline in harvest in the first half of 2022 is mainly due to different quarterly harvest plans under the industry fishing moratorium.
Fish prices are expected to remain high for a long time, and the company's salmon performance is expected to continue to grow. According to the average price of UrnerBarry,2022H1 salmon is $7.77 / lb (year-on-year + 30.50%), of which the average price of 2022Q2 salmon is $8.06 / lb, which is 7.92% compared with Q1 salmon. As of August 22, the price of UB salmon was $6.335 / lb, a correction of 29.10% from the high of the second quarter ($8.935 / lb). The recent correction in fish prices is mainly due to the off-season of traditional consumption of salmon in the third quarter, while the wild catch of salmon increases with the increase of sea temperature, the supply increases, the demand decreases, and the price falls. With the peak consumption season in the fourth quarter, fish prices are expected to rise. Kontali expects the growth rate of global salmon supply to be less than-1% in 2022. Under the tight balance between supply and demand, fish prices are expected to remain high for a long time. In addition, the company's production capacity has expanded steadily, and the new processing plant in Chile District 12 (with an annual slaughtering and deep processing capacity of 72000 tons) has been put into trial operation and is expected to be fully operational in the fourth quarter. This time, the company raised its planned harvest weight for the whole year, from 91142 tons of WFE reported in the first quarter of 2022 to 3928 tons of WFE to 95070 tons of WFE. Fish prices are expected to pick up and the harvest is expected to increase, and the salmon business is expected to usher in performance growth.
Multi-dimensional to promote the implementation of China's strategy, the domestic business is expected to further increase profits. The company has launched a number of C-end product lines at home and abroad to tamp the overseas market and vigorously open up the domestic market. In terms of products, the retail brand "Jiawo Xiansheng" has created nine types of chilled salmon products, which has been growing rapidly since its launch in April this year; the children's food brand "Chanxiong classmate" has 13 SKU online sales. In the first half of the year, in addition to the popular style product salmon fresh pine, the new product salmon luncheon meat is enthusiastic; the high-end gift brand "Ode to Antarctica" continues to improve the product line of high-end gift boxes such as salmon and silver cod. In terms of channels, "Jiawo Xiansheng" brand chilled salmon entered the "simple supermarket", once again breaking through the heavyweight merchant super channel, with monthly sales of hundreds of thousands of boxes; "Chanxiong students"
Online through Douyin and other channels to increase publicity, offline has been stationed in dozens of well-known maternal and infant terminal channels, laying more than 700maternal and infant stores; salmon fresh-cut chain "cocoa mile" has opened four in Qingdao, online takeout + offline sales at the same time. 2022H1 achieved sales of 3261 tons of value-added products WFE, a year-on-year increase of + 11%. The gross profit margin of value-added products is 2-3 times that of traditional business. By optimizing the product structure and increasing the proportion of high value-added products, the company's performance is expected to continue to improve.
Investment suggestion
In view of the peak consumption season in the fourth quarter, fish prices are expected to rise; at the same time, the company continues to promote the implementation of China's strategy, and the domestic market business is expected to further increase profits, so raise the profit forecast.
The net profit of the company from 2022 to 2024 was 321 million yuan, corresponding to EPS1.84/2.38/3.77 yuan, and maintained the "recommendation" rating.
Risk hint
Recurrent epidemic situation; disease risk of salmon; food safety risk.
