Event
On the evening of April 13, Jiawo Food issued a private additional offering plan to issue no less than 3484 million shares and no more than 52.26 million shares to Jiawo Group, the company's controlling shareholder, and the total amount of funds raised was not less than 515.632 million yuan and not more than 773.448 million yuan. The issue price is 14.8 yuan per share.
Comment
Full subscription by shareholders shows confidence, and the financial structure is expected to be optimized. The increase is fully subscribed by the controlling shareholder Jiawo Group, which demonstrates the firm confidence of the controlling shareholders in the future development of the company. All the funds raised will be used to replenish the working capital, the company's financial structure is expected to be optimized, the company's cash flow is effectively improved, and financial expenses are expected to be reduced, releasing the company's profit flexibility. This increase is expected to fully boost the company's business confidence, while improving the company's performance and profitability.
The industry demand recovery company has greatly reduced its losses, and the fundamentals of the post-epidemic era have continued to improve. Affected by the epidemic in 2020, global salmon prices fell sharply. Since 2021, salmon consumer market demand has gradually picked up, prices have rebounded, and the company's performance has increased at the same time. The company's full-year loss narrowed substantially. In 2021, Australis achieved sales revenue of 3.169 billion yuan, an increase of 2% over 2020, and a net profit of 83.1938 million yuan, turning a loss into profit compared with 2020. In addition, the company continues to promote management optimization and cost reduction and efficiency work, investing in the 12 districts of the rough processing plant annual processing capacity of about 72000 tons. We expect that with the effective reduction of cost and efficiency after the trial operation of the roughing plant at the end of March 2022, and the rise in fish prices after the superimposed epidemic, the company's performance is expected to release high elasticity.
With the activation of domestic business, there is a broad road to growth. The company has strengthened its brand expansion and launched a high-nutrition children's food brand "Chanxiong" for mother and child customers, and new products such as "Salmon fresh Sauce", "Salmon crisp", "Atlantic Real Cod" and so on. The new management team of the company has rich experience in domestic snack food management, which is expected to activate the vitality of domestic deep processing business. The gross profit margin of deep processing products is 2-3 times that of the company's main rough processing products. With the continuous development of deep processing products and the continuous strengthening of brand recognition, the company's business profitability is expected to continue to improve.
Investment suggestion
We estimate that from 2022 to 2024, the company's net profit from homing will be 1.97pm 425 million yuan respectively, corresponding to EPS 0.58 pound 1.13pm 2.44 yuan, and the current share price will be 33.88 pound 17.44pm 8.07x, respectively. Considering that salmon prices are expected to continue to rise, financial expenses, feed raw materials and other costs are gradually falling, it is expected that the company's performance flexibility will continue to release and maintain the "recommended" rating.
Risk hint
Recurrent epidemic situation; disease risk of salmon; food safety risk.
