On October 27, 2023, Shunxin Agriculture released the third quarter report of 2023.
Main points of investment
Performance falls short of expectations and cost performance is under pressure
The total revenue of 2023 Q1-Q3 is 8.807 billion yuan (same as a decrease of 3%), and the net profit is-292 million yuan (compared with 28 million yuan in the same period last year). 2023Q3's total revenue was 2.596 billion yuan (up 0.3%), and its net profit was-211 million yuan (compared with-12 million yuan in the same period last year). The performance was lower than expected, and the profit end was under obvious pressure. On the profit side, 2023Q3 gross profit margin fell 8pct to 22.79% year-on-year, with greater damage on the cost side; 2023Q3 net profit margin fell 7pct to-8.13% year-on-year. On the expense side, the 2023Q3 sales expense rate / management expense rate / business tax and additional ratio are + 0.3pct/+0.1pct/-1pct to 11.71% to 11.71% to 9.09% to 6.89% respectively, with a small change in the expense rate. On the cash flow side, the net cash flow of 2023Q1-Q3 's operating activities was-2.014 billion yuan (compared with-701 million yuan in the same period last year), and the sales rebate was 6.84 billion yuan (same as a decrease of 29%). The net cash flow of 2023Q3's operating activities was 192 million yuan (- 190 million yuan in the same period last year), and the sales rebate was 2.509 billion yuan (same as a decrease of 12%). As of 2023Q3, the contract liability is 1.457 billion yuan (quarter to quarter).
Speed up the divestiture of the real estate business and look forward to the release of the gold standard.
In terms of liquor business, the new GB core product "Gold Standard Aging" developed by the company is in line with the trend of consumption upgrading and looks forward to the promotion of goods in the process of national layout in the future. In terms of the real estate business, the company firmly promoted the divestiture process of the real estate business. in July this year, the shareholders' meeting of the company considered the announcement of the transfer of Shunxin Jiayu's controlling shares through public listing, and re-listed on the Beijing property Exchange on October 11. the base price of the transfer was adjusted to 2.51 billion yuan, and the company is optimistic that the company will focus on the development of its main business for a long time.
Profit forecast
The performance of the company is greatly affected by the real estate and pork business. With the divestiture of the real estate business and the release of new gold standard products, the main liquor industry is expected to recover gradually. We are optimistic that the company will speed up the divestiture of its real estate business and accelerate the volume of gold standard aging. According to the company's three quarterly reports, we adjust the company's EPS for 2023-2025 to-0.43, 0.95, and 1.07 (the previous value is 0.74, 0.97, and 1.10). The current share price corresponds to a multiple of-52-23-21, respectively, maintaining the "buy" investment rating.
Risk hint
Macroeconomic downside risks, gold mark promotion is not as expected, real estate divestiture is not as expected, Bai Niu er growth is not as expected, pork price fluctuation risk and so on.