Analysis and judgment
The company is the largest agricultural listed company in Gansu Province.
The company was established in 1995 and is a listed company of Gansu Agricultural Reclamation Group Co., Ltd. After 26 years of steady development, Yasheng Group has become a large-scale modern agricultural enterprise group integrating crop planting, agricultural product processing, agricultural technology research and development, agricultural material services, water-saving equipment production and trade circulation. Taking modern agriculture as the main line, the company has established a vertical integrated management system of "group parent company-professional subsidiary-base branch". The group parent company plans the industrial development as a whole, and the professional subsidiary is driven by the industrial leader. The base branch is responsible for the cultivation of high-quality agricultural products. From 2011 to 2020, the company's operating income increased steadily from 1.47 billion yuan to 3.132 billion yuan, with a compound annual growth rate of 8.77%. 2021Q1, the company achieved operating income of 562 million yuan, yoy+38.24%; achieved a net profit of 31 million yuan, yoy+405.39%, mainly due to the weakening of the influencing factors of the epidemic in the first quarter of this year, the company increased sales efforts, and the performance increased compared with the same period last year.
As for corn, the gap between supply and demand has expanded, and the planting industry chain has entered the upstream cycle. from the supply side, after the cancellation of corn temporary storage and acquisition policy in 2016, corn inventory has officially entered the elimination cycle, and prices have been depressed for a long time. The sown area has declined year after year, while imports account for a low level of corn consumption in China, which has a limited impact on the domestic corn supply and demand pattern. From the demand side, under the stimulation of high profits of early breeding, the recovery rate of pig production capacity is relatively fast. We judge that in the next 2-3 years, with the rapid release of pig production capacity, the demand for forage corn will continue to grow, supporting corn prices to remain high. Rice, wheat, rice, wheat as a substitute for corn, in the context of high corn prices, alternative demand will also be gradually released, prices are expected to rise moderately. The general rise in the prices of major agricultural products such as corn, wheat and rice will lead to a pick-up in the planting industry.
The company has remarkable advantages in land resources and produces a variety of products.
The area of agricultural land owned by the company ranks first among the listed agricultural companies in the country. Modern agriculture is mainly characterized by industrialization and intensive production, and the premise of large-scale operation and intensive production is that agricultural production enterprises must have a large number of concentrated land resources. In view of the fact that the company has rich land resources, the company can greatly improve the promotion rate of improved varieties and the coverage of mechanization. At present, the core competitiveness of the company is a large base and scientific and technological support, and the advantage is the full coverage of standardization and green production. The company produces a variety of products and has a wide market base, among which sunflower, alfalfa, potatoes, fruits and hops all have their unique advantages, which are expected to provide support for the company's future profit release.
Investment suggestion
Planting industry chain temperament warmed up, the company's agricultural sector performance is expected to show an upward trend.
We estimate that from 2021 to 2023, the company's operating income will be RMB 4239,51.36max, respectively, and the net profit attributable to the parent will be RMB397 million, respectively, and the corresponding EPS will be RMB 0.09pm. The corresponding PE will be RMB 0.15max, and the current share price will be rated as "overweight" under PE for the first time.
Risk hint
The risk of natural disaster, the risk of product technology research and development, the risk of price fluctuation of agricultural products.