The three stages of realizing the market value of agricultural products: government input, promotion of farmers' association, and financial realization.
From the international experience, the path to realize the value of agricultural products wholesale market is mainly divided into three stages. The first stage: the government invests in the construction of infrastructure, including market, logistics warehousing, monitoring and so on. At this stage, the transaction in the market is mainly cash, and the supply and demand information is relatively scattered; in the second stage, the government controls the circulation cost, and the farmers' association begins to play an important role, expanding the discourse power of the production side by centralizing supply. and gradually realize the Internet (establishing agricultural product index), and further reduce the circulation cost through warehouse receipt transaction. In the third stage, with the rapid development of agricultural futures market, long-term price locking reduces the risk of both supply and demand, and really plays a role in stabilizing the production and circulation system of agricultural products.
The production side, the demand side and the policy promote the development of the industry at the same time, and benefit from the improvement of concentration.
Production side: relatively scattered, according to Porter's five forces model, the small farmer market is relatively dependent on the wholesale market, and the wholesale market will be in an important position for a long time. Demand side: the penetration rate of Japanese household refrigerators was close to 100% in 1979, and the processing volume of frozen food in that year was 486000 tons. The saturation of the permeability of household refrigerators has driven a huge demand for frozen food. In 1999, the processing volume of frozen food in Japan reached 2.02 million tons (including imports), quadrupling in 10 years. The per capita GDP of China in 2014 was 7600 US dollars, and the average number of refrigerators of 100 urban households reached 98.5 (nearly 100) in 2012, which is very similar to that of Japan in 1979. In the next 10 years, the demand for frozen food will have 4 times the space, and the wholesale market will have 2 times the space. Policy side: the Ministry of Commerce plans to build a three-horizontal and three-vertical national agricultural product circulation system in 2020, and encourages the optimization of the main structure of investors and the introduction of private capital to improve the efficiency of the industry.
Profit forecast and investment advice
The loss of the company's new business expansion leads to a decline in profits, but considering the company's demand-driven, policy-driven, industry concentration, data to enhance liquidity, asset value tamping five major investment points, we are still optimistic about the future development of the company. Company equity property area of more than 10 million square meters, excluding liabilities of NAV= 53.8 billion, corresponding to the current NAV/ market value = 1.59 times, for the first time covered to give a buy rating.
Risk hint
The public welfare of the industry leads to the continued weak profitability of the company and the lower-than-expected expansion of new business.