Main points of investment
The rice industry ushered in a rise in prosperity, and the company's brand rice retail business benefited. The plague of locusts in Africa has a great impact on rice exporting countries such as India and Pakistan, and the second wave of locusts may make a comeback in recent to June, causing further disasters in Pakistan and many African countries. In addition, this year, the state issued a rice purchase policy for 2020. Except for japonica rice, the price of early, middle and late indica rice rose 0.01 yuan / jin over last year, the first rise since 2014. We judge that the lowest domestic rice purchase price and the rising price of international agricultural products can support the rise of domestic rice prices. In 2019, the company continued to develop the retail business of brand rice, optimizing rice quality, enriching rice varieties and expanding sales channels, realizing online and offline joint sales, and greatly increased brand influence and sales income. The company's "Tiandi Dao", "Tianyuan Dao" and other brand products have also successfully entered the national 22 provinces (cities) market. And won the "China High quality Rice Expo Gold Award", "Heilongjiang Province consumers' favorite 100 kinds of green food" and other honorary titles. The high-quality rice business is expected to benefit from higher rice prices and increase revenue and profits in the future.
The momentum of oil and plate is strong, and the advantage of technology research and development is remarkable. The sales revenue of the oil business reached 3.58 billion yuan, an increase of 181.3% over the same period last year. Xiamen Dongfang Yinxiang Oil Co., Ltd. is unique in rapeseed peeling technology. With the "new protein feed resources and its processing technology", the rapeseed peeling rate can reach more than 85%, and the peeling processing capacity can reach 1500 tons per day, thus reducing the comprehensive processing cost. And the protein content of peeled rapeseed meal products increased from 35% of traditional rapeseed meal to more than 46%, significantly higher than the current protein content of soybean meal (about 43%). Therefore, the dehulled rapeseed meal can effectively replace soybean meal, alleviate the pressure of soybean import, reduce feed cost, improve the economic benefit of rapeseed meal and help the company to expand market share.
Acquire China Corn Network to create the first corn supply chain service platform in China. The company acquired China Corn Network in 2019. After that, the company will focus on the company's advantages in capital, channels and logistics, and build a national "industry + Internet + finance" supply chain service platform for agricultural products. Provide customers with industry research and analysis, industry information integration and agricultural products matchmaking services. More than a month after the establishment of the platform, the cumulative turnover was 590 million yuan, of which the cumulative corn turnover was 296000 tons, and the development trend was good. The company is expected to create an intelligent management environment for the corn industry through the supply chain service platform to further enhance the potential value and collaborative efficiency of the industry.
Profit forecast and investment advice. It is estimated that the EPS from 2020 to 2022 is 0.2,0.25,0.31 yuan respectively, and the corresponding PE is 20 times, 16 times and 13 times respectively. Comparable companies in the same industry have an average valuation of 20 times in 2021. Considering the smooth laying of online and offline channels, the company is given a 10% valuation premium and 22 times PE in 2021, with a target price of 5.50 yuan and a "buy" rating for the first time.
Risk hints: the epidemic affects farmers' enthusiasm for farming or falls short of expectations, and rice prices may fluctuate.