What happened: the company recently released a forecast of its annual report for 2020: the company expects to achieve a net profit of 230 million yuan to 260 million yuan belonging to shareholders of listed companies in 2020, down 60.59% to 55.45% compared with the same period last year.
Comments:
Minsheng Bank's investment benefits declined. The main reason why the company realized the decrease in the net profit attributable to the shareholders of the listed company in the reporting period compared with the previous year was that the net profit attributable to the shareholders of China Minsheng Bank Co., Ltd., a shareholding company, decreased by about 650 million yuan in the reporting period, and the company's investment income correspondingly decreased by about 650 million yuan compared with the previous year.
Focus on food and strive for transformation. The company's main business modern agriculture and health food industry continued to improve, oil, bean products and brand rice and other business scale and profitability increased significantly. On this basis, the company actively promotes existing real estate development projects, speeds up the divestiture of project assets, strictly controls expenses, reduces financial expenses, and reduces losses in the real estate business sector of the company compared with the previous year.
Grain and oil sector business continued to improve. The distribution of agricultural products of Dongfang Group mainly includes rice, bean products and oil. Its brand "Tianyuan Road", "Tiandi Road", "Daoke Road" and other company brand rice products have been successfully expanded to 27 provinces, municipalities and autonomous regions across the country, including China Resources Wanjia, Wal-Mart, Carrefour, RT-Mart, Yonghui, Suguo supermarket, Wumart and other large chain supermarkets, and the number of retail outlets has increased to more than 3300. The company's main business, modern agriculture and health food industry, continued to improve, and the scale and profitability of business such as oil, bean products and brand rice increased significantly.
Actively layout the food sector. In recent years, Dongfang Group has actively explored the application of agricultural science and technology and the research and development of health food, and is committed to developing health food and applications related to high-tech content, good market prospects and high value-added agricultural products. Since 2020, Harbin Fushi Agricultural Development Co., Ltd., the company's artificial meat research and development team, relying on independent technology, has successfully developed high-moisture plant-based artificial meat, taking the lead in achieving a moisture content of 65% of meat products in China. High humidity legal person meat manufacturing technology is in the leading level in the country. The company has three national patents of "full-fat stable rice bran", which fills the domestic blank of full-fat stable rice bran products. In 2019, the company developed and launched skin care products with organic agricultural products as the main efficacy ingredient, and the first phase has launched the "Oriental make-up and brilliance mask" mainly composed of full-fat stable rice bran.
Investment advice: the investment benefit of the company is expected to improve in the interest rate hike cycle of tighter currency, and the company's active layout of new food business is expected to fully benefit from the high performance flexibility brought about by rising prices of diversified products. At the same time, in the long run, the company's real estate business is expected to gradually reduce losses, and the agri-food industry has made obvious efforts. We believe that the company's 21-23 net profit is forecast to 242 million / 502 million / 612 million, EPS0.10/0.12/0.18, corresponding to PE 36.4 shock 31.5 per cent 20.4 times, maintaining the "buy" rating.
Risk hint: the project schedule is not as expected, the product price fluctuates, and the demand falls short of expectations.