Event: according to the 2021 annual report released by Tsuen Yin Hi-Tech, the company achieved operating income of 2.521 billion yuan, an increase of 57.38% over the same period last year, a net profit of 169 million yuan, an increase of 26.68% over the same period last year, and a non-net profit of 150 million yuan, an increase of 37.89%.
Seed expansion has achieved remarkable results, with a substantial increase in sales, laying the foundation for performance growth. In recent years, the company has paid attention to the reserve of multiple varieties, which is mainly reflected in the expansion from the original rice-based to corn, wheat and other crop research and development; from the original middle and lower reaches of the Yangtze River (East China) to southwest China continued to develop. The company's advantageous sales area continues to take the lead. In 2021, the company's sales revenue in East China increased by 76%, with revenue reaching 1.49 billion. The company's variety layout and sales area expansion were fruitful, including 17% in South China, 23% in Southwest, 379% in Northwest and 256% in North China. Under the strategy of multi-category and multi-regional layout, the company's sales exceeded 100 million kg in 2021, an increase of 52% over the same period last year. Rice seeds are still the company's main product, with revenue exceeding 1.2 billion in 2021, an increase of 39% over the same period last year. Other crop seeds are growing rapidly, with corn revenue reaching 218 million, up 63% over the same period last year, and wheat revenue reaching 149 million, up 71%. In addition, the company added or realized 60 provincial approved varieties in 2021, including 44 for rice, 9 for corn and 7 for wheat. In addition, the company's foreign business is developing smoothly, with foreign revenue reaching 181 million in 2021, an increase of 30% over the same period last year. The continuous expansion of seed business lays the foundation for sustained growth of performance.
Order agriculture business advances smoothly and develops in coordination with seed business.
The company's order business continued to expand, including order grain business revenue of 724 million (up 73% year-on-year) and silage corn revenue of 135 million (800% year-on-year increase). The company's order agriculture business is becoming more and more mature, the gross profit margin has gradually increased, and the gross profit margin of food crops has increased to 7.6% from 4.66% in the same period last year. The role of order agriculture in promoting seed business has been shown. Through the demonstration of integrated brand grain base and the planting of silage corn, the company has actively promoted the sales of hybrid corn and wheat seeds such as rice seeds, Quanyu 1233, Luyu 9105, Sumai 188 and so on.
The reform of the seed industry is expected to accelerate, and the company aims to be among the top ten in the global seed industry!
In 2021, the amendment to the seed Law was examined and passed. this revision expands the scope of protection of intellectual property rights of new plant varieties, extends the protection links, improves the level of protection, and increases the intensity of protection. we believe that under the promotion of a series of systems represented by the seed Law, the innovation environment of the seed industry continues to improve. The company has set the goal of entering the top ten of the world seed industry at the end of the 14th five-year Plan. In 2020, the company implemented the employee stock ownership plan for the first time, and in 2021, the employee stock ownership plan was successfully unlocked for the first time, which greatly mobilized the enthusiasm of employees. In 2021, when the equity amortization expense reached 54.8 million yuan, the company realized a net profit of 169 million yuan, an increase of 26.68% over the same period last year. We believe that the company's variety, regional expansion path is clear, pay attention to R & D investment and mobilize the innovation enthusiasm of R & D personnel, is expected to make steady progress on the road to achieve the goal!
Profit forecast and investment advice: from 2022 to 2024, we expect the company to achieve an operating income of 34.57max 43.07 / 5.239 billion, an increase of 37% / 25%, and a net profit of 2.16%, 309 and 18.51%, respectively, with an increase of 27.5% and 43.28%. The company ploughs deeply into the seed industry, expands its business rapidly, continues to focus on recommendations and maintains a "buy" rating.
Risk hints: epidemic risk; price fluctuation; policy change risk; order agricultural promotion is not as expected; GM promotion is not as expected.