The layout of the whole industry chain of aquatic products, shrimp bibcock accelerates the process of globalization. Guolian Aquatic products is one of the only two enterprises in China that have obtained the double BAP four-star certification of shrimp and tilapia. It is the largest shrimp processing and sales enterprise in China. The company's 2019Q3 realized revenue of 3.769 billion yuan, an increase of 8.62% over the same period last year, and a net profit of 18 million yuan in the same period, down 91.97% from the same period last year. The company's parent net profit decreased significantly, mainly due to the expansion of the domestic market, the development of crayfish products and the impact of trade war, which resulted in a total of 389 million yuan in fees and R & D expenses, an increase of 45.62% over the same period last year, which put pressure on the company's performance. In addition, consider transferring 30% of the shares in the same period in 2018, achieving an investment income of 87.74 million yuan, boosting the performance of the same period in 2018. This is the main reason for the poor performance in 2019. We believe that the company deeply ploughs domestic channels, the industry ushered in development opportunities due to the epidemic, the company's performance is expected to return, accelerate development and take off soon.
Industry opportunity: consumption increment can be expected, industry integration is just in time. Due to African classical swine fever, the pig industry has been greatly eliminated, considering the long production cycle, three yuan breeding, epidemic disease has not been gone, the resumption of production has a long way to go; alternative consumption, price comparison effect is expected to promote the rapid growth of aquatic consumption. Second, trade frictions between China and the United States may show signs of easing, and tariffs on aquatic products imported to the United States may be abolished. There is a large gap in aquatic consumption between urban and rural areas, aquatic products cater to the demand for healthy diet, the development of platform and technology is good for the depth of the market, and the demand for aquatic products increases, driving the upgrading of aquatic consumption. Finally, the aquatic products deep processing brand has not yet formed the leading effect, at the same time, the aquatic products processing industry tends to the initial processing, the profit level is low, the future industry wants to turn to intensive processing. Guolian Aquatic products as an industry leader, adequate sources of funds, master the core technology, industry opportunities for the company to provide growth opportunities.
Core competitiveness: upstream and downstream channel expansion, mid-stream R & D acceleration. 1) upstream: the company acquires Penaeus chinensis to further consolidate the globalization of the supply chain. 2) Middle reaches: the company has a comprehensive product category and rich product matrix; in the first half of 2019, the company successfully developed 17 new products, accelerated R & D and upgraded to intensive processing. In addition, the company's layout of individual crayfish predicts that the market price will pick up strongly; the company will quickly cut into the main producing areas and is expected to increase both in volume and price in the future. 3) downstream: we are optimistic about the development of sales channels after the epidemic. The company focuses on developing B-end customers such as catering and industrial consumption, while taking into account C-end customers such as Shang Chao. At present, the company has large super customers such as Walmart Inc, Carrefour and ParknShop, as well as large catering quality customers such as Liang Zhilong, Grandma's home, Haidilao International Holding, Carnival, Applebees, etc., and the superimposed company has a strong operating capacity in JD.com fresh, Box Ma Xiansheng, Missfresh Limited and other e-commerce and new retail layout. The company enjoys 8% market share in the United States by virtue of SSC, but considering the adverse impact of the Sino-US trade war, the company strives to expand the non-US market, and the adjustment result is satisfactory.
Stone from other mountains: counterbid Japan Fisheries Co., Ltd. With a history of more than one hundred years, there is still room for the layout of Guolian aquatic products; in the growth stage of the standard industry, the company's planning is logical. Optimistic about the future development of League of Nations aquatic products.
Investment advice: we are optimistic about the increase in consumption of aquatic products and the rapid development of domestic online and merchant super channels. We give the company 18.7%, 20% and 30% growth in operating income in 2019, 2020 and 2021, with a gross profit margin of 14%. It is estimated that the company's operating income in 2019,2020 and 2021 is 5.591 billion yuan, 6.709 billion yuan and 8.721 billion yuan, the net profit of its mother is-81 million yuan, 143 million yuan and 313 million yuan, and the EPS is-0.09,0.16,0.34 yuan.
Risk tips: natural disaster risk; food safety risk; Sino-US trade friction.