We recently inspected the company's Sanmenxia ecological pig breeding and Zhengzhou fledgling incense store sales. We believe that the company's recent work has been done according to the original plan, and Sanmenxia is expected to sell 100000 and 300000 ecological pigs in the next two years. Young mu Xiang shop sells well, and the number of stores will be expanded to 300 next year. The company's ecological pig production and the improvement of the industrial chain will help the company to span the pig cycle, and the company's future performance is expected to achieve high growth.
Main points of investment:
The impact of falling pig prices on the gross profit margins of the company's main products, breeding pigs and piglets, is limited. The advantages of Eagle Agriculture and Animal Husbandry Company are reflected in its unique breeding model, high efficiency and specialization. From 2007 to now, with the increase of production scale, the number of piglets per litter increased linearly, the sales volume of piglets increased significantly, and the gross profit margin increased continuously. The prices of breeding pigs and piglets are not the main determinants of their gross profit margin, so the decline in pig price has a limited impact on their gross profit margin. The gross profit rate of fattening pigs is affected by both pig price and feed price. We estimate that large-scale pig farming enterprises will make a profit of about 200 yuan per pig, which is equivalent to a 10% return on pig farm investment.
The company's ecological pigs will begin large-scale production next year. With the help of sales channels such as Chimu Muxiang stores, the profit contribution of ecological pigs will increase the company's Sanmenxia ecological pig breeding base in the next two years, and the number of ecological pigs will reach 100000 and 300000 respectively. The company will become the largest ecological pig breeding enterprise in the world. Although the eco-pig has a large investment, its price is stable and the rate of return is high, and the proportion of its profit contribution smoothes the volatility of the company's performance growth.
The ecological pig production and the extension of the industrial chain will help the company to span the pig cycle and achieve sustained and high profit growth. the company is establishing an integrated industrial chain from feed, breeding, slaughtering, cold chain, specialty stores and meat processing, and will focus on deploying the back end of the industrial chain and the company's brand building in the future. Based on the fact that the company will start large-scale production of ecological pigs next year, and the industrial chain is constantly improving, the company has developed from simple captive pigs to captive and ecological pigs to expand the scale at the same time. We can foresee that the growth of the company's profits in the next few years is the biggest story of investing in this company.
We fine-tune our earnings for 2013 while keeping our forecast earnings for 2012-2015 unchanged. The company's earnings for 12-15 years are expected to be 380 million, 620 million, 940 million and 1.83 billion, up-10%, 60%, 53% and 95% year-on-year, equivalent to 0.72,1.15,1.76 and 3.44 yuan per share. The company will create more than four times its current profit in the next three years.
Risk hint: the risk of pig epidemic disease, the fluctuation of pig price is higher than expected, and the ecological pig marketing does not meet the expectation.
