On October 19, 2023, Longda Food released its report for the first three quarters of 2023.
Main points of investment
Pig price is still at an all-time low, and the breeding sector is under short-term pressure.
The total revenue of 2023Q1-Q3 is 10.106 billion yuan (same as minus 12%), and the net profit returned to the mother is-649 million yuan (same as minus 1416%). 2023Q3's total revenue is 3.38 billion yuan (27%), and the net profit is-24 million yuan (284%), mainly due to low pig prices and losses in the breeding sector. On the profit side, the gross profit / net profit of 2023Q1-Q3 is 0.41% / 6.91%, respectively, compared with the same period last year-3pct/-8pct, and the rate of sales expenses / management expenses is 1.15% / 1.99% respectively, which is respectively compared with the same period last year.
The gross profit margin / net profit rate of 0.03pct/+0.3pct and 2023Q3 is 3.15% + 0.03pct/-1pct respectively, and the sales expense rate / management expense rate is 1.07% + 2.00%, respectively, compared with the same period last year + 0.1pct/+1pct. The overall expense rate is relatively stable.
The business space of prepared food is broad, and the performance is expected to continue to improve.
The company adheres to the "one body and two wings" development strategy, takes breeding and slaughtering as the basic advantage business, and relies on the upstream raw material layout advantage and the national layout of the slaughterhouse to support the main business of prefabricated dishes. China's prefabricated vegetable market is rapidly expanding. With the increase in the proportion of the food sector, the company will gradually get rid of the adverse effects of periodic fluctuations in pig prices. In the prefabricated dish section, the company adheres to the strategy of solidifying the old and opening up the new in Big B, developing new customers through the increment of old customers and adding products at the same time, and increasing the coverage of the regional market through the continuous development of dealers in small and medium-sized B. the scale effect is gradually shown, focusing on the creation of large items at the C end, and the development of new online retail business has achieved initial results. At the same time, the company continues to optimize management efficiency, promote food industrialization, promote cost reduction and efficiency, and the future performance is expected to continue to improve.
Profit forecast
We are optimistic that the company's transformation will cut into the prefabricated food track, and the depressed pig prices are expected to further improve and bring about a sustained improvement in performance. According to the three quarterly reports, we adjust the EPS for 2023-2025 to-0.5Universe 0.12 yuan (the previous value is 0.02 scarp 0.22 scarp 0.38 yuan, respectively), and the current share price corresponds to 64 times the PE of-15 gamble 204 scarp, maintaining the "Buy" investment rating.
Risk hint
Macroeconomic downside risk, pig price fluctuation risk, the progress of prefabricated food is not as expected, the recovery of pig production capacity is not as expected, and so on.