Event: the company issued a September sales report that 4.3289 million live birds were sold in September 2023, with a sales income of 102 million yuan and an average sales price of 12.70 yuan / kg, with month-on-month changes of 25.33%, 28.04% and-2.00% respectively, and year-on-year changes of 9.07%,-10.28% and-19.92%, respectively.
Comments:
Live poultry sales are growing steadily, and the economic recovery is expected to boost the recovery of chicken prices: from January to September 2023, the company sold 32.9628 million yellow chickens, an increase of 8.05% over the same period last year, and sales revenue of 719 million yuan, down 1.47% from the same period last year. The increase and decrease in volume is mainly due to the weak performance on the demand side in September, broiler sales suffered a sluggish peak season, and the price of the company's yellow chicken fell 19.92% year on year. At present, the general trend of production capacity removal on the supply side of yellow chickens remains unchanged. According to the Poultry Industry Association, as of October 8, the stock of yellow-feathered broilers on behalf of their parents has dropped to 12.91 million sets, close to the 2018 low. Looking forward to 2023Q4, the peak season of traditional consumption is coming, the marginal demand is improving, and the continuous contraction of supply leads to a rebound in chicken prices, and the company's performance is expected to further improve.
Take the lead in the chilled chicken business and actively distribute prefabricated dishes: the company has become the leading enterprise of chilled yellow chicken in China, and the chilled business contributes the main income. The chilled sales revenue in the first half of 2023 is 1.023 billion yuan, accounting for about 58% of the company's revenue. It is estimated that the annual chilled business income in 2023 is more than 2.5 billion yuan. For many years, the company has been committed to the cold chain logistics distribution system and chilled network layout, its own cold chain logistics system and sales network covers 28 provinces, cities and regions across the country, and has established a mature chilled marketing model and strong network layout advantages. form a cooperative relationship with Yonghui supermarket, Carrefour, Hema Xiansheng and other large supermarket groups to establish a chilled self-counter. In terms of prefabricated dishes, the company has developed a series of prefabricated products, including salt baking, roast meat, steaming, sauce and so on, with an annual production capacity of 5000 tons. With the gradual construction and production of the "Hunan Xiangjia Food Heart Intelligent Factory Project", it is estimated that the total production capacity of prefabricated vegetables will reach 80,000 tons in the second half of 2024. In the future, the company's prefabricated food will adopt the combination of online and offline marketing to give full play to the company's supply chain advantages in cold chain distribution.
For the first time, the coverage gives a "buy" rating: affected by the overall weakness of capacity and market demand in 2023, the price of yellow feather chicken continues to hover near the cost line, and the mood of breeders is low. With the continuous promotion of capacity removal and long-term demand repair, the price of yellow-feathered broilers is expected to rise in 2024. The company is a leading enterprise of chilled yellow chicken in China, and is expected to benefit from the booming market. It is estimated that the company's net profit from 2023 to 2025 will be 1.65 Plus 3.54 million yuan, corresponding to EPS 2.48 pm 2.29 yuan, giving the company an industry average of 10 times PE in 2024, corresponding to the target price of 24.80 yuan per share, and giving it a "buy" rating for the first time.
Risk hints: the risk of large-scale epidemic outbreak, the risk of fluctuations in raw material prices, and the company's scale expansion is not up to expectations.