Closely follow the market trend to increase ecological animal husbandry, integrate the distribution of resources, pig breeding. At present, Tianyu Ecology is constantly integrating resources and optimizing industrial structure, and intends to cultivate the field of pig breeding as one of the main business directions for future development. In June 2020, the company's pig farm in Chongming District, Shanghai was officially put into production, and in December of the same year, the first batch of live pigs were successfully put on the market. In 2020, the company achieved a business income of 4.1721 million yuan in pig farming. On July 5, 2021, the company announced that its subsidiary Shanghai Tianqian plans to establish Hubei Tiancheng Fengtai Food Co., Ltd. as a joint venture with Ningbo Tourism City Development Co., Ltd. And Wuhan Hengyun Fengtai Technology Partnership. The joint venture company is mainly engaged in breeding livestock and poultry production, livestock raising, breeding livestock and poultry management and feed production. The company's move is to expand the business scale of the company's ecological animal husbandry sector. At present, the company has not yet formed a scale of raising pigs, and the gross profit margin in 2020 is 7.33%. In the future, the gross profit margin is expected to increase with the gradual expansion of the scale. As a part of the company's ecological "planting, raising and eating" circular agriculture, pig breeding helps to expand the company's ecological industrial chain and promote the sustained and healthy development of the company.
Revenue declined under the epidemic in 20 years, and Q1 business recovered steadily in 21 years. According to the 2020 annual report disclosed by the company, the company achieved operating income of 583 million yuan in 2020, down 30.43% from the same period last year, and realized deduction of non-return net profit of-162 million yuan, the first loss since the company went public. The decline in revenue and net profit is mainly due to the impact of the epidemic and floods in the Yangtze River basin, the slowdown of project construction progress, macroeconomic environment and other external factors leading to the slowdown of Party A's internal examination and approval process, which leads to the lengthening of the project landing cycle. However, with the orderly progress of the national resumption of work and production, and the control of the epidemic situation is on the right track, the management of Q1 in the past 21 years has gradually alleviated and increased steadily. The company achieved revenue of 139 million yuan, an increase of 58.28% over the same period last year, and the net profit after deducting non-return changed from negative to positive, to 3.8248 million yuan, up 151.98% from the same period last year. It is expected that the epidemic will continue to be controlled in the future, and the company's business will gradually return to its pre-epidemic level.
Actively respond to the national "rural revitalization" plan, committed to building a "small and beautiful" lightweight company in order to achieve a breakthrough. At present, the company is committed to implementing the development planning of rural revitalization, relying on the original ecological business experience, integrating "eco-environmental engineering, pastoral complex construction" in traditional business into "Tianyu pastoral city version", focusing on "garden" and "construction". Integrate the emerging business "ecological animal husbandry, circular farming" into "Tianyu pastoral and rural version", focusing on "field" and "food".
Through its own IP Tianyu pastoral brand to achieve collaborative development between businesses, to achieve industrial closed-loop and mutual empowerment between industries. On the other hand, in view of the great downward pressure on the domestic economy, the future impact of superimposing the epidemic situation of COVID-19 is still uncertain, and the gross profit margin of the landscape engineering industry is constantly being compressed. The traditional transformation direction of "garden + ecology" and "garden + tourism" has high capital investment and long investment recovery cycle. The company is committed to reducing its own weight, reducing financial pressure and payback cycle, in order to achieve track breakthrough.
Investment suggestion: the company's operation was not as good as expected due to the outage of the epidemic in 2020, and its business gradually returned to steady growth in the first quarter of 21. The field of pig farming will be brought into the strategy of "Tianyu Pastoral and Rural Edition" as part of ecological "planting, raising and eating" circular agriculture. We expect the company to achieve EPS 0.25,0.28,0.31 yuan in 2021-2023, corresponding to PE 58,52,47. Coverage for the first time, giving "overweight" rating
Risk hints: the industry competition intensifies the risk, the pig price fluctuation risk, the return of accounts receivable falls short of the expected risk, the original business development falls short of the expected risk, the new business development falls short of the expected risk, the industrial chain integration falls short of the expected risk, the cash creation ability is lower than the expected risk, the risk of higher expense rate, and so on.
