Events:

On April 18, 2022, the company released its quarterly report: revenue was 1.223 billion, up 6.2% from the same period last year, and net profit was 110 million, up 170.5% from the same period last year.

Comments:

Salmon industry demand strong recovery, the company's profits increased sharply in the first quarter.

According to the Data Salmon report, global salmon sales prices are showing a rapid recovery trend. In 2021, the average price of Chilean Trim D fish sold to the United States increased by 33% compared with the same period last year, while the average price of the whole fish industry sold by Chile to Shanghai, China rose 41% from the same period last year. Affected by the recovery of salmon prices, the company's net profit in the first quarter was 110 million, a sharp increase of 170.5% over the same period last year, greatly exceeding market expectations. Among them, the core subsidiary Australis achieved a net profit of 189 million in a single quarter, an increase of 251.9% over the same period last year, and a gross profit margin of 18.96%, a substantial increase in 27.21pct over the same period last year. Due to the significant increase in fish prices, the fair value change income of consumable biological assets was 166 million yuan, an increase of 382.72% over the same period last year.

The company issued a fixed increase plan, the controlling shareholder plans to subscribe in full, and the capital structure is expected to improve.

The company issued a fixed increase plan, which intends to raise 516-773 million yuan, which will be fully subscribed by Jiawo Group, the controlling shareholder, and will be used to supplement liquidity after deducting the issuance expenses. The financial expenses of 2022Q1 Company were 108 million yuan, up 37 million yuan from the same period last year; the asset-liability ratio was 89.56%, down 4.47pct from the same period last year. This increase will help reduce the company's financial risk, improve its capital structure and boost the company's profit release.

The company has launched 3R prefabricated dishes to create a "new engine" for future growth.

The company mainly launches the brands "Mama Bear" and "Jiawo Xiansheng" which focus on household consumption segment.

And brands such as "Chanxiong", the sales of value-added products increased by 45% in 2021 compared with the same period last year. In 2022, the company will focus on five sales channels: distribution, retail, catering, monopoly and gift. The domestic salmon market price is high and the growth rate is fast. With the development of the Chinese market, the company's gross profit margin is expected to increase.

Earnings forecasts, valuations and ratings.

Affected by the sharp rebound in the salmon industry, the company's profit forecast has been raised. It is estimated that the revenue of the company from 2022 to 2024 is 57.21 percent 69.45 / 8.451 billion yuan, respectively, compared with 24.44 percent, 21.40 percent, 21.69 percent, and the net profit of returning home is 2.43 / 4.08 / 707 million yuan, respectively, and 184.21 percent, 67.96 percent, 73.20 percent, respectively. With reference to the 23-year average valuation of the comparable company, the target price is maintained at 34.9 yuan and the "buy" rating is maintained.

Risk hint

Natural disaster risk; exchange rate fluctuation risk; food safety risk