The company discloses its 2022 annual report and 2023-1 quarterly report. The company achieved revenue of 1216.78 million yuan in 2022, an increase of 15.68% over the previous year, and net profit attributable to 42.91 million yuan, a year-on-year decrease of 79.72%, EPS 0.2 yuan, and a weighted average ROE of 1.39%, down 7.24 percentage points from the previous year. The company achieved revenue of 325.34 million yuan in the first quarter of 2023, an increase of 42.36% over the previous year, and net profit attributable to it was 190.88 million yuan, a year-on-year decrease of 492.15%.
The company released about 520,300 pigs in 2022, an increase of 41.54% over the previous year; achieved sales revenue of 1156.48 million yuan, an increase of 22.75% over the previous year; gross profit margin was 27.60%, down 13.44 percentage points from the previous year. The company received a total quota of 249,500 heads from Hong Kong, China in 2022, an increase of 21.08% over the same period last year. In terms of project reserves, the company has now stored and completed the basic construction of a breeding base with a production capacity of 2 million heads in Heyuan City. At the same time, the company has extended its development to Huizhou, the surrounding area of Heyuan City, and has set aside 200,000 head breeding projects a year.
The company sold 209,900 pigs in the first quarter of 2023, an increase of 66.98% over the previous year; achieved revenue of 309 million yuan, an increase of 46.45% over the previous year. Affected by the shock of low domestic pig prices in the first quarter, the company's performance for the first quarter of 2023 declined and lost money compared to the fourth quarter of 2022. The company's balance ratio as of the end of the first quarter of 2023 was 40.75%, and the financial structure was relatively stable. Currently, pig prices are at the third “bottom of loss” in this cycle. Continued decline in pig prices will facilitate the continued removal of production capacity in the industry and the advent of a new cycle.
Investment advice
We expect the company to return net profit of 1.42/667/712 million yuan to the parent company in 2023-2025, and the corresponding EPS is 0.67/3.13/3.35 yuan. Currently, the stock price corresponding to 2023/2024 PE is 42/9 times, and the corresponding 2023 PB is 1.8 times, maintaining the “increase in holdings - B” rating.
Risk warning: risk of livestock and poultry epidemics, risk of natural disasters, risk of rising raw material prices, risk of poor transportation.