The company officially entered the pig breeding industry in 2019, thanks to the rapid landing of industrial farming, it only took 3 years to achieve more than 1 million pigs in 2022, and achieved excellent production results. The production cost of the Gaozhou project in 2022 is about 14.93 yuan / kg, and the cost of Hezhou is lower than that of Gaozhou, and it will be further improved this year with remarkable achievements.
Jingji's success stems from its deep understanding and firm implementation of industrial aquaculture. From the very beginning, the top-level design abandoned the dirty mess that traditional retail investors were limited to low input and heavily relied on manual work. It is also different from the general scale breeding enterprises to adjust the pace of expansion at any time according to the rise and fall of pig prices. As a new cross-border force, Jingji adheres to the simple business philosophy of efficiency and success, and regards low cost as the only goal of enterprise survival and development, rather than blindly pursuing scale expansion and the concept of "getting stronger first and then bigger". Let pig prices fluctuate and never waver.
In the pig farming industry, with the irreversible and rapid rise of labor costs, for enterprises, the ultimate cost control must rely on a brand-new breeding model with high industrialization and standardization, especially for economically developed areas such as Guangdong-Hong Kong-Macau Greater Bay Area, which has a large population and little land. building farming with high standards and high investment has become the best choice. It is estimated that without considering major epidemic diseases and environmental protection investment, the complete cost of raising pigs in Jingji buildings is expected to be less than 15 yuan / kg, making it a large-scale farming body with high cost competitiveness. Its core lies in the production mode of building culture, which is closest to the industrial assembly line, which runs day and night like an enlarged assembly line machine. Only in this way can we minimize the cost waste caused by piggery, equipment, sows and manual idle and improve efficiency. For the manufacturing industry, under the condition that the raw material cost is out of control, the capacity utilization rate is the most key factor to determine the cost. Building pig raising through a highly intensive model to maximize the use of sites, equipment, sows and labor, and then improve unit output, that is, production efficiency, which is an incomparable advantage of low-density farming.
Everything has its advantages and disadvantages, and the biosafety risk and environmental protection pressure brought by high density are also two major risks that can not be ignored. Enterprises must seek the best balance between high efficiency and high risk. Company Wenchang project due to unreasonable previous design, the occurrence of environmental accidents, the company actively cooperated, invested a lot of manpower and material resources to renovate, the current indicators meet the standards and the project set up a public open day to enhance public understanding of the project. Biosafety, the company's biosafety prevention and control system and daily management of the two-pronged, excellent performance, Gaozhou project was selected into the national African classical swine fever epidemic-free community.
Investment suggestion
Our analysis: (1) the company's pig breeding business is progressing steadily, and the column will be close to 2 million this year, basically achieving full production and negative production, and the pig industry plate continues to contribute income to the company. (2) the real estate business is the company's strategic support business, Shanhai Royal Garden 2023H1 settlement amount of 7.526 billion yuan, the pre-sale of Shanhai mansion project will begin to be occupied and delivered in the second half of the year, which will continue to contribute considerable income and profit flexibility to the company.
(3) Pig prices remained depressed in the first half of this year, dragging down the performance of the pig farming sector. Based on this, we reduce the company's 23-year operating income by 13.719 billion yuan to 13.397 billion yuan, the company's 24-year operating income by 11.774 billion yuan to 11.674 billion yuan, and the new forecast company's operating income in 2025 to 139.22 yuan. The 23-year return net profit of the company will be increased by 2.025 billion yuan to 2.037 billion yuan, and the 24-year return net profit of the company will be reduced by 1.026 billion yuan to 1.008 billion yuan. It is estimated that the 25-year return net profit of the company will be 1.519 billion yuan. Increase the company's 23-year EPS 3.87 yuan to 3.89 yuan, downgrade the company's 24-year EPS1.96 to 1.93 yuan, the new forecast of the company's 25-year EPS of 2.90 yuan, August 18, 2023 share price of 20.13 yuan corresponding to 23-25 PE for 23-25 year 7X, maintaining the "buy" rating.
Risk hint
The risk of price fluctuation in the pig market, the lower-than-expected risk of the release process of pig production capacity, the risk of fluctuation in the price of feed raw materials, the progress of real estate projects and income recognition are not as expected.