Focusing on the main meat products business and moving towards Chinese meat products, covering “increased holdings” investment rating companies for the first time, they have formed an operating model with strong internal synergies such as custom-branded meat, ham, specialty meat products, plant-based meat, etc. With the perfect channel layout and diversification of consumption scenarios, the company is still in a period of rapid development. Net profit attributable to the mother in 2020-2022 is estimated to be 1.1 (taking into account accruals, etc.), 240 million yuan, and 39 billion yuan respectively, and the EPS is 0.11, 0.24, and 0.40 yuan. The current stock price corresponding to PE is 48.9, 23.0, and 14.0 times, covering the “increase in holdings” rating for the first time.
The meat products industry has broad room for growth. China is a major meat consumer with great potential for development of Chinese meat products, but currently the share of meat consumption is still low. In 2019, it was only 17%, far below 70% in developed countries and the world average of 45%. Among them, Chinese meat products account for about 50% of consumption, while Western-style meat products account for about 45%. Looking forward to the future, as income increases and consumption is upgraded, Chinese meat products with rich flavors, pure meat preparation, and nutritional health have great potential for development. Currently, the industry is in the stage of extensive development, and concentration can be increased.
Focusing on the main business of meat products, internal synergies are strong, and the synergies of golden period companies are still developing under an omni-channel layout: (1) Customized brand meat: grasping the world pork market, seizing domestic and foreign pig price differences, providing ToB and ToC customers with personalized customized raw materials, pioneering personalized meat customized meat in China. There is no comparability. The market space is large, and it can meet new models such as fresh e-commerce, social e-commerce, etc., and the personalized customization needs of food processing enterprises, providing stable and high-quality meat product supply chain guarantees and rapid development together. The company has 60,000 tons of cold storage and needs for its own materials. It can flexibly enjoy the dividend of domestic and foreign pig price differences, and its performance is highly flexible; (2) ham: pioneering new consumption scenarios such as barbecues and hot pot, breaking the original seasoning scenario and increasing consumption frequency; (3) specialty meat products: imported pork from abroad, the cost is low. Moreover, the production cycle is short, which can speed up the company's capital turnover, improve the efficiency of capital utilization, and optimize the business structure; (4) Plant-based meat: Early layout, great potential for growth. In the future, with the further improvement of the layout of online and offline channels, the volume of various businesses can be expected.
Public auction of debt to eliminate receivables risk
After the company acquired Zhongyu Capital, the medical investment business and meat products business were managed separately by two teams. Therefore, the divestment of the healthcare and investment business had limited impact on the operation of the company's meat products business. Furthermore, the company has now calculated 110 million yuan in bad debt preparations, and the founder is bidding for claims, which has limited impact on the company's future performance.
Risk warning: risk of pork price fluctuation, food quality and safety risk, epidemic risk.