Net profit increased by 65% compared with the same period last year. The company slaughtered 6.3 million live pigs, up 16.52 percent over the same period last year; produced 800000 tons of high and low temperature meat products, up 13.70 percent over the same period last year; realized operating income of 20.307 billion yuan, up 10.82 percent over the same period last year; realized total profit of 2.26 billion yuan, up 56.58 percent over the same period last year; realized net profit of 1.69 billion yuan belonging to shareholders of the parent company, an increase of 64.95 percent over the same period last year. Realized earnings per share of 0.77 yuan, exceeding market expectations.
Product revenue has increased steadily and gross profit margin has increased. In the first half of the year, revenue from high-temperature, low-temperature meat products and fresh frozen products increased by 15.8%, 2.7% and 14.5% respectively compared with the same period last year. Due to the upgrading of the product structure and the low price of pork, the gross profit margin of the three types of products increased, and the comprehensive gross profit margin increased by 2.9 percentage points to 20.1%. Pig prices have risen rapidly recently, rebounding by about 10% in August from the April low, but sow stocks are still high, and it is expected that there is limited room for pig prices to rebound. In order to resist the risk of rising meat prices, the company has increased its frozen meat reserves. The inventory at the end of June was 2.84 billion yuan, an increase of 37.5% over the beginning of the year. The inventory of finished products and raw materials increased by 400 million respectively over the end of last year, which can ensure low-cost production in the second half of the year.
The company lowered its annual business target. Affected by the adjustment of product structure, channel development and the progress of network construction, there is a certain gap between the production and sales volume in the first half of the year compared with the annual business plan disclosed at the beginning of the year. In order to support the adjustment of the structure, promotion of new products, construction of network and expansion of the scale of the two main industries of fresh products and meat products, the company adjusts its business plan for 2013 as follows: it plans to slaughter live pigs from 17.5 million to 15 million, and the production and marketing of meat products will be adjusted from 1.9 million tons to 1.78 million tons, with a total sales volume of 3.25 million tons.
Profit forecast and investment rating. The company's earnings per share from 2013 to 2015 are expected to be 1.76,2.19,2.63 yuan, and the company's dynamic price-to-earnings ratio in 2013 is 21.34 times. The company's current price-to-earnings ratio is reasonable, taking into account the huge volume and steady growth of demand in the meat industry, Shuanghui Company's steady development and sustained high growth, clear ideas for future development, sufficient equity incentives for management, and broad room for development. maintain a "buy" rating.
Risk hint: pig prices fluctuate more than expected; food safety problems lead to a decline in sales.
