The company is a high-quality protein food enterprise with salmon as its core product. Jiawo Food is mainly engaged in the breeding, processing and marketing of high-quality protein seafood, and has a deep grasp of the scarce upstream resources of high-quality seafood protein represented by salmon. The products mainly include salmon, Arctic sweet shrimp, narrow cod, real cod, flounder and other high-quality seafood. Benefiting from the pick-up in the terminal market demand and sales price of salmon, the company's profit has increased significantly. 2022Q1 achieved revenue of 1.223 billion, an increase of 6.2% over the same period last year, and a net profit of 110 million, up 170.5% from a year earlier.
The controlling shareholder intends to fully subscribe for the fixed increase, optimize the financial structure, and demonstrate the confidence that the controlling shareholder of the company is the Jiawo Group. Recently, the company issued a private IPO plan, which intends to raise 516-773 million yuan, which will be fully subscribed by the Jiawo Group to supplement liquidity. This increase will help to reduce the company's financial risk, improve the company's capital structure and help the company's profit release, with high certainty for future growth.
Salmon industry long-term tight balance between supply and demand, fish prices are expected to maintain high demand for salmon will benefit from the trend of upgrading consumption and continue to rise. Global salmon consumption in 2021 was about 2.86 million tons, an increase of 8 per cent over the same period last year. The salmon culture industry is restricted by the strict culture environment and license supervision, and the industry concentration continues to improve. The global salmon harvest in 2021 was about 2.82 million tons, an increase of 4 per cent over the same period last year. In the future, the average annual growth rate of global salmon supply will slow to 4%. The salmon industry will be in a tight balance between supply and demand for a long time, keeping salmon prices at a high level.
The company holds scarce resources, strictly controls the quality of core categories, builds a deep moat, acquires Australis, the top ten salmon enterprises in Chile, and controls the high-quality and scarce resources of the upstream aquaculture end with the highest value in the whole industry chain. The company carries on the integrated whole industry chain operation of fish egg hatching, fresh water breeding, mariculture, harvesting and processing to brand sales, and has sufficient processing capacity in Chile, of which the 72000-ton intelligent processing plant is scheduled to be completed in March 2022. Further reduce cost and increase efficiency. On the channel side, the company adheres to the layout of global diversified omni-channel sales system, focusing on the Chinese market, launching "Chanxiong classmate" to cut into the domestic high-prosperity 3R prefabricated food field. In the future, the company will continue to promote category expansion, enrich the product matrix, and help the company's performance release.
Investment advice and profit Forecast
Benefiting from the warming of salmon prices, the company's performance will maintain a high growth rate and high certainty in the future. We estimate that the company's revenue from 2022 to 2024 will be 56.65, 69.51 billion yuan respectively, an increase of 23.22% over the same period last year, 22.72% and 20.81%, respectively. The net profit of homing in 2022-2024 was RMB 2.38 Universe 7002 million, an increase of 182.55%, 70.17% and 73.20% over the same period last year. The corresponding EPS for 2022-2024 was RMB 1.37 and 2.334.03 respectively, and the current share price corresponding to PE was 19.3, 11.3 and 6.6 times, respectively, giving a "Buy" rating for the first time.
Risk hint
The risk of market price fluctuation of raw materials and products, the risk of continuous fermentation of epidemic situation, the risk of new business development falling short of expectations, the risk of fair value change of consumable biological assets, and the risk of natural disasters.
