Summary:
The company is located in Xinjiang Autonomous region, mainly around the regional characteristics of Xinjiang to build the industrial chain of agricultural products. In the case of the impact of imported milk and the lack of consumer confidence in the domestic market, the milk powder business, as the company's main business, has suffered a certain impact in recent years. However, with the price of fresh milk bottomed out twice at the end of 15 and 16 years, the negative sentiment in the market has been gradually digested. Although it will take some time for the market to recover, stable prices are more conducive to the promotion and sales of the company's products.
With the promotion of the two-child policy, the company's main series of infant dairy products will undoubtedly benefit further. With the gradual increase in the number of newborns, the company's product sales will also rise, and the performance will be further released. On the other hand, from the customs monitoring of imported milk powder, the import volume began to decline significantly at the end of 16 years, which has a positive impact on the company's business. At the China Dairy Summit Forum at the end of March, the company also expressed its intention to build "Xiyue" products into a leading brand of Chinese infant milk powder, which also shows the company's determination to turn its products from a regional brand into a national well-known brand.
Under the premise of the demand gap and the gradual change of consumption concept, the company's small business varieties of brandy and grape seed oil will also further open the market, and the products with regional characteristics will be better than ordinary products in terms of taste and quality. it has a certain advantage in the ability of the market to undertake products.
Profit forecast: we forecast that the company's EPS from 2016 to 2018 will be 0.02,0.03,0.06 yuan respectively, giving the company an "overweight" rating.
Risk tips: 1) the risk of market change; 2) regulatory risk; 3) the risk of industrial policy change.
