Performance summary: in 2022, H1 Company achieved operating income of 380 million yuan, an increase of 7.8% over the same period last year, and its net profit was 21.223 million yuan, a decrease of 59.2% over the same period last year. The net profit after deducting non-return was 9.406 million yuan, down 78.3% from the same period last year. Revenue in the second quarter alone was 190 million yuan, a decrease of 6.2 percent over the same period last year, an increase of 3 percent over the previous year, and a net profit of 7.58 million yuan, down 78.1 percent from the same period last year and 44.5 percent from the previous year.
Comments: during the reporting period, the company's performance declined compared with the same period last year, and the mood of commodity generation chicks was weak, which was due to:
1) affected by the epidemic in the first half of the year, the consumption demand of eggs decreased and the spot market of eggs was in a state of weak profit. 2) the price of feed raw materials was still high and the production cost of fresh eggs was on the high side. 3) the company adopts more price following strategy in the southern pink shell layer market, in order to increase the market share and brand recognition to gradually improve the pricing power, and lay the foundation for the production and product promotion of the southern seed industry center project. The number of chicks issued by the company increased steadily, and 95.562 million chicks were sold during the reporting period, up 16.5% from the same period last year.
The layer consumption attribute is strong, the market demand is broad, the integrated enterprise is expected to usher in the increase of market share. In China, the demand for parents' egg breeders is between 1300 and 20 million sets per year, and the sales volume is about 150 million yuan. The demand for commercial egg chickens is about 10 to 1.5 billion birds, with sales of about 4 billion yuan. The egg production is about 23 million tons and the sales volume is about 160 billion yuan. At present, the stock of laying hens is lower than the historical level. according to the data of Zhuochuang Information, the number of laying hens in July 2022 is about 1.19 billion, an increase of 1.10% month-on-month and 1.89% over the same period last year, which is still low in recent years and provides support for egg prices. in the future, with the arrival of Mid-Autumn Festival, National Day and other holidays, the demand side is expected to grow, and the price trend is expected to promote the enthusiasm of breeding. The downstream demand of the company is increasing, and the management is improving. Imported breeds have higher capacity utilization due to better egg laying performance and other characteristics. the company's ancestral breeder chickens are all American sea relations products with high market recognition. And the company covers the marketing network throughout the country, with great influence, and Beijing Yukou, Huayu Agricultural Science and other enterprises rank first echelon in the laying hen seed production industry. By grasping the trend of integrated breeding of grandparents and parents, the company can enjoy dividends to the greatest extent in the process of increasing market concentration.
As one of the leading egg production enterprises, the company has obvious advantages in business model, biosafety and so on.
In 2021, 170 million chicks were sold, an increase of 20.1% over the same period last year, and the national market share reached 15%. From the perspective of introduction, the company introduced 50006 ancestral egg breeder chickens in 2021, accounting for 31.8% of the total number of ancestral egg breeder chickens introduced in the country. The company adopts the business model of "centralized culture and decentralized incubation" in Minning, Qingtong Gorge and Alashan breeding bases, making use of the location advantages of low fixed cost and high biosafety; after that, the breeding eggs are transported to Ningxia, Henan, Xinjiang, Jilin and other places for hatching, and then transported to customers to reduce loss and cost; the organization mode of husband and wife parcel helps to improve work efficiency and ensure stability. The company pays attention to the construction of biosafety system, which is located at the eastern foot of Helan Mountain and Alashan Mountain in Inner Mongolia. Helan Mountain is used as a natural barrier to block the spread of strong convective air and bird-borne disease, and has excellent isolation conditions. Strictly control the entry and exit of vehicles, minimize manual participation and reduce risk in the feeding process. The biological operation process of "all in and all out", closed management and rotating empty field is conducive to comprehensive disinfection to ensure health. In the future, the construction project of Alashan million breeder chicken ecological breeding base and Alashan breeder chicken farm, which will cost 340 million and 430 million yuan, will further expand the company's production capacity and enhance its market competitiveness.
Profit forecast and investment advice. It is estimated that the EPS from 2022 to 2024 will be 0.57,0.75,0.97 yuan respectively, and the corresponding dynamic PE will be times higher than that in 31-24-19, maintaining the "hold" rating.
Risk tips: rising feed prices, poultry breeding epidemic, lower-than-expected demand, and so on.