Events:
Xiangjia shares released a report for the third quarter of 2022: during the reporting period, the company achieved a total operating income of 2.719 billion yuan (+ 24.39% compared with the same period last year) and a net profit of 97.23 million yuan (+ 1061.8% compared with the same period last year). In the third quarter, the company achieved a total operating income of 1.107 billion yuan (+ 40% compared with the same period last year) and a net profit of 92.3531 million yuan.
Main points of investment:
Huang Yu Chicken continued its boom and turned its losses into profits in the third quarter. During the reporting period, the company achieved a total operating income of 2.719 billion yuan (year-on-year + 24.39%) and a net profit of 97.23 million yuan, of which in the third quarter the company achieved a total operating income of 1.107 billion yuan (year-on-year + 40%) and a net profit of 92.3531 million yuan. The company's R & D expenditure during the reporting period was 2.2503 million yuan (+ 87.68% compared with the same period last year), mainly due to increased investment in poultry breed research and development and food R & D; and financial expenses of 13.1537 million yuan (+ 66.63% compared with the same period last year), mainly due to the increase in borrowing and the increase in interest on the issuance of convertible bonds. The company's operating cost in the third quarter of 2022 was 2.213 billion yuan, an increase of 23.1% over the same period last year, and the operating cash flow increased to 23.22 million yuan, up 124.6% from the same period last year.
Continue to lead the chilled industry, capacity expansion in an orderly manner. The chilled business has certain technical barriers and transportation difficulties, so most enterprises are not involved in the expansion of this field, and the company has grown into a "leader" in the industry with its experience of continuous ploughing and exploration for many years.
The company has strict procurement quality control standards and quarantine procedures for purchased chilled poultry, which helps the company to establish a high-quality brand image and enhance consumer stickiness. In addition to continuing to help the further growth of the chilled business, the expansion of the company's broiler breeding capacity is also in an orderly process, and the progress of the construction project of a standardized breeding base for 12.5 million high-quality chickens has been slowed down by the epidemic, but some of these farms have been completed and put into production one after another, producing economic benefits.
The yellow chicken industry continues to rise and the profit center of the industry continues to move up. In terms of yellow chicken, after the long-term and sufficient capacity elimination of the yellow feather chicken industry, the industry is ushering in a cycle reversal, the extent of this round of capacity contraction determines the persistence of the upward period, taking into account the attributes of breeder chickens, it is difficult for parents' generation (including in-production and reserve) to recover in the short term, and there is room for continuous upward movement for the industry. Yellow chicken has the characteristics of fresh sale, live poultry, hot fresh and chilled constitute the three forms of yellow chicken, which determines the weak controllability of its supply, and the gap of supply will bring full release of price elasticity. The price trend of this cycle exceeds market expectations, high prices will continue, and the profit center of the industry will continue to move up. The company is expected to fully benefit from rising prices and return to the upstream channel of ice profitability.
Profit forecast and investment rating we expect the 2022-2024 company to return to the parent net profit of 289,327 million yuan, corresponding to the PE of 22.77, 14.46, 12.80 times, maintaining the "buy" rating.
The risk indicates the risk of epidemic disease in livestock; the risk of price fluctuation of raw materials; the risk of business model; the risk of food safety; the risk that the company's performance expectations are not up to standard.