The company has realized the layout of the whole industry chain of sea cucumbers, with periodicity and growth. At present, the company has formed an integrated layout of breeding, nurturance, fishing and sales around sea cucumbers, with strong cost advantages and risk control ability. Horizontal coverage of three major businesses, aquaculture, processing industry and fishing industry, aquaculture business products are mainly fresh sea cucumbers, prices fluctuate periodically with the market, it is optimistic that the overall recovery of the industry will accelerate the growth of the aquaculture industry in the future. The main products of the processing industry, frozen food and processed sea cucumber products are facing the foreign market and the domestic market respectively. At present, the sales end of the company has gradually made efforts to obtain a direct sales license, the full channel layout is becoming more and more perfect, and the certainty of the future growth of the processing business is higher; the company has expanded steadily in the fishing industry, under the background of the state encouraging the development of the ocean fishing industry, eight new ocean-going squid fishing vessels have been added to the sea, and the performance is expected to be released gradually. On the whole, under the double benefits of the recovery of the industry and the opening of the market, we expect the company to usher in a new round of growth.
Aquaculture business: the industry warms up and overlaps costs down, and profits continue to improve. We expect that the company's future sea cucumber production growth space is limited, the growth rate is slow, and the revenue performance of the company's breeding business is mainly dominated by product prices. The capacity removal of the sea cucumber industry has basically ended, and due to the unrestricted expansion of the previous production capacity, it has caused irreversible damage to the sea resources to a certain extent, while the technical level of the industry has been basically mature, the future expansion of production capacity can only be maintained at a low speed. On the demand side, affected by the improvement of market penetration and market expansion, the demand for sea cucumbers is expected to increase steadily. At present, the participation price has warmed up but is still at a relatively low level in history, the supply and demand of the industry is tight or maintain a tight balance, the gap between supply and demand will continue to expand in the future, and the industry has entered an upward period of prosperity. The participation price is expected to see the second high of 180-200 yuan / kg in the next two years, with a price increase of 50% and 67% before the corresponding period. In addition, the company's self-breeding costs still have room for downward, the future breeding business will benefit from the recovery of the industry and downward costs, profits are expected to continue to improve.
Fishing business: take advantage of the east wind of policy to meet a new round of growth. The basic principle of the state to the offshore fishing industry is both encouraging and restricting, encouraging domestic fishing enterprises to "go out" through subsidies related to the renewal and construction of fishing vessels and fuel fees, and at the same time, in order to maintain the offshore fishing environment, some enterprises with small scale, weak strength, non-standard management and weak awareness of safety and development should be restricted. Therefore, with the orderly development of the ocean fishing industry, the market share will continue to be concentrated to large enterprises, and the domestic large fishing enterprises represented by good owners have great advantages in terms of fishing vessel approval and policy support. we are optimistic about the new round of development of the company's fishing business.
Processing business: the channel expansion is smooth, the performance is expected to speed up. At present, the company has gradually established a scale in the three major industries of breeding, processing and fishing, and will focus on opening up domestic and foreign markets based on resource advantages in the future, gradually changing from the original production and processing enterprises to marketing service-oriented enterprises. By the end of 2017, the company has established ten major marketing companies, including sales companies, direct selling companies (obtaining direct selling licenses in 2017), TV shopping, e-commerce, WeChat merchants, live seafood, conditioning food, snack food, rice in seafood, and import and export companies. gradually covering all-channel marketing. The company's channel expansion is smooth, helping to accelerate the growth of processing business.
Profit forecast and investment rating: we estimate that the company's operating income from 2018 to 2020 will be 1.627 billion yuan, respectively, and the return net profit will be 0.87 billion 1.12 billion yuan, respectively. According to the existing share capital of the company, we estimate that the EPS of the company from 2018 to 2020 is 0.06, 0.08, and 0.11 yuan per share, respectively, and the corresponding PE is 38, 30 and 21 times, respectively. Maintain the company's "overweight" rating.
Stock price catalyst: the participation price continues to rise, and the reported performance exceeds expectations.
Risk factors: natural disaster risk, participation price fluctuation risk, sea area resource risk, industry competition risk, policy change risk, etc.
