Items:
According to the company's annual performance forecast for 2021, the company expects to achieve net profit of-1.08 billion yuan to-1.28 billion yuan belonging to shareholders of listed companies in 2021, down 288.49% to-323.39% compared with the same period last year; net profit after deducting non-recurrent profit and loss is-1.1 billion yuan to-1.3 billion yuan, down 300.19% by 366.59% from the same period last year. The performance is greatly affected by the sharp fluctuations in pig prices in 2021.
Guoxin agricultural point of view: 1) around the development strategy with "pig" as the core, Aonong has established an efficient and safe self-breeding system, the cost advantage is showing, and the average gross profit is in the forefront of the industry. At the same time, the company's current production capacity is mainly concentrated in sows, so it is relatively less affected by the trough of the pig market in 2021, and there is still a lot of room for fattening capacity in the future. In addition, there are sufficient funds at the bottom of the company, and the rate of expansion at the bottom of the cycle is not decreasing but increasing. In the future, it is expected to rely on a new round of capacity expansion to seize share against the trend, and fully enjoy the volume and price dividends brought about by the reversal of the 2023 cycle. 2) risk hint: the death of uncontrollable pig epidemic occurred in the industry, and the cost pressure caused by the uncontrollable rise in the price of fodder raw materials such as grain. 3) Investment advice: from the company's point of view, the company's current production capacity is still concentrated in the sow end, which is relatively less affected by this round of market trough, and there is still a large space for fat pigs to release themselves in the future, relying on sufficient bottom capital, the company is expected to rely on a new round of capacity expansion to counter the trend to seize more shares. From an industry point of view, 2022 is the best stage for the layout of the pig plate, because there is a high probability of a reversal in the pig cycle in 2023. From this point of view, Aonong may fully benefit from the volume and price increase brought about by the reversal in pig prices in 2023. It is estimated that the company's 21-23 year net return profit will be-11.108 Uniqure 292Universe 3.316 million yuan, corresponding to EPS of-1.62 Uniqure 0.43 Universe 4.84 yuan, corresponding to the previous share price PE of-10.4 Uniqure 391max 3.5 X, given a "buy" rating.
Comments:
The scale of breeding is expanding rapidly, and the short-term performance is under obvious pressure.
The company issued a performance forecast for 2021 on January 29th. In 2021, the company is expected to achieve a net profit of-1.08 billion yuan to-1.28 billion yuan belonging to shareholders of listed companies, down 288.49% and 323.39% from the same period last year. The sharp decline in profits is mainly due to the sharp expansion of the company in 2021, while pig prices have fallen sharply compared with the same period last year. The company sold 3.2459 million live pigs in 2021, an increase of 141.1% over the same period last year. By the end of December 2021, 1.7925 million pigs were kept in stock, an increase of 85.98% over the same period last year. The scale of the company's breeding business maintained a trend of rapid expansion at the bottom of the pig price cycle.
The rookie of pig farming with full-chain layout has established an efficient self-breeding system around the double main industry development strategy of "feed + breeding" and "pig" as the core, and the company has completed the layout of the whole industry chain of live pigs from upstream feed production to downstream food processing. In terms of feed business, the company's feed products cover three categories: compound feed, compound feed and concentrated feed, covering the feeding needs of suckling pigs, piglets, sows and large, medium and small pigs at all stages. In terms of breeding business, the company vertically established a pyramid self-breeding system composed of breeding population, propagation group and commodity group, and horizontally completed the layout of the main breeding areas in the country. the preparation of the core breeding population and the propagation group has been basically completed. At the same time, the company implements the concept of integrated epidemic prevention, takes agricultural Internet and animal protection business as the escort of breeding business, and further realizes the extension of downstream slaughtering and processing business.
Judging from the split of income in the first half of 2021, the company's income from feed, aquaculture, trade, food and animal protection accounted for 55.0%, 26.2%, 9.8%, 8.6% and 0.3%, respectively.
At present, the construction achievements of the company's efficient integrated breeding system are gradually realized: on the one hand, the company's pig production and storage have maintained rapid expansion, with a compound growth rate of 97.87% and 87.43% respectively in the past five years. And from the company's latest disclosure of the column, the company in January 2022 out of 380000 live pigs, is expected to account for nearly 50% of the proportion of piglets, piglets accounted for slightly higher than the proportion of fat pigs, the company's current production capacity is still mainly concentrated in sows, so the impact of this cold winter of the industry is relatively small, and fattening capacity still has more room to release in the future, its target production volume of 6 million respectively in 2022. On the other hand, compared with its peers, the scale of the company's breeding business not only grows faster, but its profitability is also higher than the average level of enterprises of the same size, with an average gross profit margin of 23.11% in 2018-2020. it is significantly higher than the average level of enterprises of the same size (21.43%).
There are plenty of funds at the bottom of the company to accelerate its expansion in the cold winter.
In terms of bank loans, the company issued a notice on December 21, 2021 to apply for financing credit lines from financial institutions in 2022. In 2022, the company will apply to financial institutions not limited to banks, financial leasing companies and other financial institutions for credit lines of no more than 8 billion yuan. In other aspects of financing, the company issued the latest fixed increase plan in March 2021, proposing a non-public offering of 130 million shares to raise no more than 1.44 billion yuan, of which 450 million yuan will be used for aquaculture capacity expansion and 940 million yuan will be used to supplement liquidity funds. the plan was approved by the CSRC in September 2021. In addition, according to the company's three quarterly reports in 2021, as of September 30, 2021, the company's monetary fund balance is 410 million yuan, and the short-term debt balance is 9.26 billion yuan. The existing monetary funds and financing programs are sufficient to achieve full coverage of short-term debt. We believe that at the bottom of the current downturn in pig prices, the capacity expansion of most breeding enterprises will be greatly limited or even shrink, while Aonong, which has technological and financial advantages, is expected to seize more share against the trend through continuous capacity expansion. so as to further open up the company's growth space and enjoy the volume and price dividend brought by the reversal of the cycle.
Investment suggestion: be optimistic about the performance flexibility after the repair of pig price, and give "buy".
We believe that the advantages of Aonong are mainly reflected in three aspects: 1) the company has established an efficient and safe self-breeding system, and the cost advantage is emerging. Head average gross profit is in the forefront of enterprises of the same size; 2) at the present stage, the company's production capacity is mainly concentrated in sows, so it is relatively less affected by this market trough, and there is still more room for fattening capacity to be released. 3) during the trough period of the industry, the company relies on a strong financial advantage, and the speed of expansion increases instead of decreasing. In the future, the production capacity to be fattened will be further increased, and it is expected to share the volume and price dividend brought by pig price repair this year and next year. It is estimated that the 21-23 net profit of the company will be-11.08 Mercer 2.92 / 3.316 billion yuan, corresponding to the EPS of-1.62 Universe 0.433,4.84 yuan, and the previous share price PE of-10.4 Uniqure 39.1 pesque 3.5 X, given a "buy" rating.