Events:
The company released the monthly sales report in November, the company sold 25.02 million young chickens in November, an increase of 1.50% over the previous month, and realized sales revenue of 91.47 million yuan, an increase of 15.89% over the previous month.
Comments: benefiting from the rising price of chicken seedlings, the company will make a big profit in the fourth quarter and the price of chicken seedlings will be depressed in the first half of the year, the superimposed cost will rise, and the company will lose a lot of money. After August, the price of chicken seedlings rebounded month by month, broke through the cost line in September, reached a high of 4.5 yuan / feather in October and November, and the company's performance improved greatly. From September to November, the average price of chicken seedlings in the company is 2.9 yuan, 3.2 yuan and 3.7 yuan respectively, and the profit per feather is expected to be 0 yuan, 0.3 yuan and 0.9 yuan respectively.
The supply and demand pattern has improved, and the industry has ushered in a high economic cycle.
The supply gap of the industry has been fixed, and prices are expected to be high for a long time. From January to October, the number of ancestral updates in China was 715500, down 31.7% from the same period last year. It is estimated that less than 900000 sets will be introduced in the whole year, far below the average of 1.1 million sets. At present, avian influenza in the main introduction places abroad is serious and it is difficult to recover in the short term, and it is expected that the introduction will still be tight next year. In addition, the decline of ancestral performance has a great influence on forced molting. The supply and demand pattern of the industry will improve and the upstream enterprises such as chicken seedlings will be given priority.
The increase of production capacity goes hand in hand with the extension of the industrial chain
The company is the leading enterprise of broiler breeding for parents. 310 million chickens have been listed in 2021 and 280 million in January-November 2022. In the future, with the company's "deposit column 800000 sets of parent breeder breeding project" put into production, it is expected that the production capacity will be further increased to 500 million.
In addition, the company continues to expand the cooked food business, and the cooked food projects in Weifang and Penglai have been put into production and operation, creating brand advantages and taking the lead in occupying the downstream cooked food market.
Investment advice: be bullish on the company and give a "buy" rating
With the superposition of volume and price, the company's performance is expected to usher in high growth. We expect the company's 22-24 return net profit to be-210 million, 520 million and 550 million, respectively, and the current share price is 15 times PE in 2023. Be optimistic about the company's growth space, cover it for the first time, and give it a "buy" rating.
Risk hint: the price of chicken seedlings rises less than expected, while downstream consumption decreases.