Event: the company released its mid-term report in 2019, with revenue of 1.265 billion yuan in the first half, down 10.34% from the same period last year, and net profit of 17.29 million yuan, reversing losses over the same period last year. Among them, the revenue in the second quarter was 664 million yuan, down 1.31% from the same period last year, and the net profit returned to the mother was 28.26 million, reversing losses compared with the same quarter. Since the second quarter, pig prices have rebounded, while the volume of the company has grown rapidly in the first half of the year, promoting an improvement in performance.
Comments:
Both volume and price have risen, and the performance of aquaculture business has been greatly improved. Pig prices rebounded significantly in the second quarter. At the same time, the number of pigs produced by the company increased rapidly in the first half of the year, with a total of 233700 pigs, an increase of 80.87% over the same period last year. In the first half of the year, the revenue of the company's aquaculture business reached 330 million, an increase of 77.03% over the same period last year. With the further rise in pig prices, we expect the company's performance to continue to improve quarter by quarter.
Affected by African classical swine fever, the company's feed sales decreased significantly. In the first half of 2019, total feed sales were 323700 tons (including 75300 tons for domestic sales), down 16.91 percent from the same period last year, and feed sales revenue was 790 million, down 29.32 percent from the same period last year. At the same time, the company continued to optimize the product structure, and benefited from the decline in raw material prices, the gross profit margin of the company's feed business increased by 5.66 percentage points to 15.82% compared with the same period last year.
The amount of price increases, the multiple guarantees of growth.
Affected by the epidemic situation of classical swine fever in Africa and cyclical factors, the stock of live pigs and fertile sows continues to decline significantly, and the upward trend of pig cycle has been determined. We expect pig prices to accelerate in August and remain strong in 20 years. Price shocks will push up share prices in a new round.
The rapid growth of the company's output is guaranteed. As of the first half of the year, the company's productive biological assets increased by 111.63% compared with the beginning of the year, mainly due to the commissioning of the iron project, which completed the introduction of 17300 breeding pigs in April and is expected to achieve partial listing in 20 years. At the same time, the company's sow stock stock is close to 42000. It is expected that the company will be able to complete the plans of 45-550000 and 960000 respectively in 19 and 20 years.
The new major shareholder is in charge, backed by the Bay area industry and finance. Bay area industry and finance is jointly funded by 48 domestic and foreign high-quality enterprises with a registered capital of 40 billion, which will fully support the development of the company's aquaculture business.
Keep bullish on the company and maintain its "buy" rating
The number of hurdles has increased rapidly, and the superposition cycle has gone up. Maintaining the original profit forecast, the company's EPS in 19-21 is expected to be 0.39,1.80,1.98 yuan. Continue to be bullish on the company and maintain its "buy" rating.
Risk tips: the release of production capacity is not as expected, the product price is not as expected, and the risk of infection.