The price of wheat, grain and oil has warmed up and the operation has improved, the company's performance has improved for a long time, and the "buy" rating has been maintained.
Su Ken Nong Development released its three-quarter report in 2023, with revenue of 8.62 billion yuan (yoy-4.32%) and net profit of 531 million yuan (yoy- 12.10%) in the first three quarters of 2023. The revenue of Q3 alone is 3.332 billion yuan (yoy + 16.54%), and the net profit is 249 million yuan (yoy-2.59%). Since 2023Q3, the price of wheat, grain and oil has rebounded, and the price of rice is higher than that of the same period in 2022. We keep the company's profit forecast for 2023-2025 unchanged. It is estimated that the company's net profit for 2023-2025 will be 743pm, 983 EPS, 0.84 yuan, respectively, and the current stock price will correspond to PE, 19.1, 14.4, 12.2 times. The company's operation improved month-on-month, the long-term trend of performance repair improved, and the "buy" rating was maintained.
Wheat, grain and oil prices pick up, wheat seed sales are high, and it is optimistic that Q4 rice prices will rise and profits will improve
Wheat: during the reporting period, the sales volume of self-produced wheat, harvested wheat and wheat seeds was 23.50,25.39 and 160200 tons respectively, which was-14.67%,-15.73% and + 50.23% respectively compared with the same period last year. Since 2023Q3, wheat prices have risen, the company has increased wheat and wheat seed sales, and wheat seed sales have increased greatly. The company's wheat sales are concentrated in the first three quarters, and 2023Q4 wheat sales are expected to decline month-on-month, and some wheat or processed wheat will be sold with higher gross margins.
Cooking oil: during the reporting period, the company sold 233500 tons of edible oil, compared with the same period last year. The price of edible oil picked up in the second half of 2023, and the company took the opportunity to increase sales. In terms of production capacity, the company's Jingjiang Longwei project resumes production in an orderly manner and is expected to be put into production in 2 years. Rice: during the reporting period, the company's sales of rice, seed and rice were 13.86,9.33 and 250700 tons respectively, which were-33.28%, + 27.94% and + 2.39% respectively compared with the same period last year. The average price of rice in 2023 is better than that in the same period in 2022, and we expect 2023Q4 to expand rice sales to boost performance.
The malt business focuses on the steady development of the high end, and the company has a long-term trend of high-dividend operation with abundant funds.
During the reporting period, the company sold 170900 tons of malt (year-on-year + 0.68%), the company's malt business production capacity of 250000 tons, focusing on expanding the high-end brand market, high customer recognition and steady development. In terms of finance, the company has maintained a high dividend ratio to shareholders for a long time, with a dividend payment rate of 50% in 2022, an asset-liability ratio of 53.49% (year-on-1.85pcts) by the end of the third quarter, book currency funds of 806 million yuan, abundant funds, steady progress in the annual expansion goal of 50,000 mu of land, and a long-term upward trend.
Risk hint: planting costs rose faster than expected, barley prices rose less than expected, and demand was lower than expected.