Sales of rice, wheat, grain and oil are steady, and the expansion of transferred land helps increase performance and maintains the “buy” rating
Suken Nongfa released its 2022 annual report. The company achieved revenue of 12.727 billion yuan (+11.86%) in 2022 and net profit of 826 million yuan (+10.76%) to its mother. Sales/management/R&D/finance expenses accounted for 1.51%/4.73%/0.58%/1.98%, respectively, with year-on-year changes of -0.13pct/-0.75pct/-0.03pct/-0.51pct, respectively. Expenses all maintained a year-on-year decline. The price of large wheat may fall somewhat in 2023, and the profit forecast for 2023 was lowered slightly; the company optimized the planting structure, the share of sales of middle and high-end products increased, slightly raised the 2024 profit forecast, and added the 2025 annual profit forecast. The company's net profit for 2023-2025 is estimated to be 9.38/10.78/12.35 (the forecast values before 2023-2024 were 1,036/1,075 billion yuan respectively), the corresponding EPS was 0.68/0.78/0.90 yuan respectively, and the current stock price corresponding to PE was 17.3/15.0/13.1 times. The company's planting structure continues to be optimized, and the increase in land transfer area is recommended in an orderly manner to maintain the “buy” rating.
The company's annual output is stable, and sales of rice and wheat seeds, grain and oil remain steady
Sales volume: In 2022, the company sold 308,200 tons of wheat, homegrown wheat, self-produced barley, and malt respectively, 286,600 tons, 0.3 million tons, and 223,700 tons, respectively, with year-on-year changes of +11.05%, -3.27%, +210.83%, and -3.56%, respectively; sold 764,000 tons of rice, 375,700 tons of rice, and 336,000 tons of rice, respectively, with year-on-year changes of -27.39%, +69.22%, -2.83%; sales of edible oil 303,000 tons, -0.01 percent year-on-year %; sold 27,000 tons of corn and soybeans, and 0.4 million tons respectively. Production & yield: In 2022, the company achieved a total grain output (including bales) of 1,255,000 tons (down 11,000 tons from the previous year); the company successfully completed 100,000 mu of corn and large belt compound planting tasks (of which, corn yield 762.5 kg/mu; soybean yield 126 kg/mu); looking at the yield level, the company's own rice yield in 2022 was 2,280 kg/mu; the expansion base rice yield was 1,910 kg/mu.
The company recommended the expansion of transferred land in an orderly manner, and the scale of government subsidies maintained a year-on-year increase
In 2022, the Autumn Planting Company independently operated about 1,278 million mu of cultivated land, of which about 318,800 mu were transferred, an increase of 291,000 mu over the previous year. The company promoted the expansion of land transfer area in an orderly manner to help the company's profits grow steadily. In 2022, the company received 400 million yuan in government subsidies, including current profit and loss amount of 356 million yuan, an increase of 45 million yuan over the previous year. Furthermore, the optimization of the company's planting structure is expected to further increase the company's overall profitability.
Risk warning: The occurrence of animal diseases is uncertain, the COVID-19 pandemic suppresses the pace of consumption and company sales, etc.