Consumption upgrading to promote the development of China's imported beef industry!
With the upgrading of consumption driven by the rise of income in China, the domestic consumption demand for beef is growing rapidly. Since 2012, the compound growth rate of beef consumption in China has been as high as 3.9%, and it is still growing rapidly. Due to the limitations of domestic resources and varieties, domestic beef is difficult to meet the rapid growth of domestic beef consumption demand, and beef imports have increased rapidly in recent years. From 2014 to 2016, China imported 417000 tons, 663000 tons and 812000 tons of beef, with a growth rate of 58.99 percent and 22.47 percent in 15-16 years. Imports are expected to reach 950000 tons in 2017, an increase of 17 percent. South America, Australia and other places have superior resources, cattle breeds and good beef quality, but the price is low, under the background that the upgrading of domestic consumption promotes the high growth of beef demand.
Foreign high-quality beef import industry ushered in good opportunities for development!
"Foreign high-quality resources + domestic market", to create the world's leading beef suppliers, performance flexibility! Through the establishment of domestic trade, processing and sales platform and the acquisition of Uruguay Lorsinal, the company has initially set up a beef supply platform of "overseas quality resources + domestic market". In the future, the company will continue to promote the acquisition of Hengyang cattle industry and strengthen the layout of the company's beef industry. Hengyang cattle Industry, as a leading enterprise in the domestic beef processing industry, has high quality resources, high brand recognition and perfect channels, with an annual slaughtering and processing capacity of 400000 beef cattle. If the acquisition is completed, it will strengthen the synergy with the company's existing beef business, rely on the platform of listed companies, and further expand rapidly in the upstream field of overseas resources and domestic processing and sales links. To become the world's leading beef supplier, the industry space is extremely broad!
At present, the company has acquired a 50% stake in Lorsinal, and is actively promoting the acquisition of cattle assets in Uruguay and Argentina, and forms coordination with the beef trade and processing business of listed companies, and the performance is expected to grow high. We estimate that in 17-19, without considering the overall acquisition of Hengyang cattle industry, the company's cattle industry profit will reach 0.49 million RMB 1.90 billion, which will become the core driving force of the company's future performance growth! The rise in coal prices has boosted the company's performance! supply-side reforms pushed coal prices up sharply in 2016. According to our estimates, for every 100 yuan increase in coal prices, the net profit contributed by each ton of coal will reach 36 yuan. In 2017, Yaxing Mine, the main mine, encountered earth coal seams, changes in coal quality, and increased expenses brought about by shutting down old mines. The company's coal profit is expected to be relatively limited in 17 years, with a profit of only more than 10 million, but it has greatly improved from the loss of more than 40 million last year. In the past 18 years, coal prices are expected to remain high, and the company's output will continue to be enlarged. it is expected that the company's coal business will bring a net profit of about 25 million yuan for the company in 2018, leading to an increase of 0.03 yuan in EPS.
Give a "buy" rating:
In 2019, it is estimated that in 2019, the net profit of the company's parent company will be RMB 313,444 million, an increase of 459.07%, 70.51%, 41.70%, 0.23, and 0.38, 0.55 yuan over the same period last year. Taking into account the expectation of the company's future acquisition of Hengyang cattle industry and the broad industrial space, it will be valued at 30 times in 18 years, with a target price of 11.4 yuan.
Risk tips: 1, coal prices fluctuate sharply; 2, future acquisitions are not as expected.