Event: the company recently released its quarterly report for the third quarter of 2022. In the first three quarters, the revenue was 3.03 billion yuan, with a decrease of 18.05%; the net profit returned to the mother was-38.2089 million yuan, compared with-292 million yuan in the same period last year; and the net profit was-144 million yuan in the same period last year, and-148 million yuan in the same period last year. In the third quarter alone, the revenue was 1.098 billion yuan, an increase of 1.78%, a net profit of 146 million yuan, an increase of 144.07%, and a net profit of 34.9867 million yuan, an increase of 216.4%. The comments are as follows:
The volume of aquaculture business increased in price, and the profit rose sharply in the third quarter. In the first half of the year, the breeding business produced 669600 live pigs, an increase of 48.43%. However, due to low pig prices, there was a loss. Entering the third quarter, pig prices rose sharply, driving the breeding business to turn losses into profits. In the third quarter alone, 285100 pigs were fenced, an increase of 65.37%, and a net profit of 58.12 million yuan. By the end of the third quarter, the book value of fixed assets and projects under construction was 2.488 billion yuan, an increase of 20.65% over the same period last year. The release of new capacity is conducive to the growth of pig production next year.
Feed business develops steadily. In the first three quarters, the feed business achieved an income of 1.6 billion yuan, accounting for 53% of the total revenue, with a net profit of 53 million yuan. In the third quarter alone, the feed business achieved a net profit of 24.95 million yuan and a profit of about 166yuan per ton.
Management has been improved and fee control has achieved remarkable results. In 2022, the company will streamline the organization, improve internal management and control expenses by adjusting the organizational structure, shutting down inefficient farms, and differential management of the total salary of subsidiaries to improve per capita efficiency.
In the first three quarters, the company's administrative expenses, sales expenses and R & D expenses totaled 247.1049 million yuan, down 44.37 percent from the same period last year.
Profit forecast and investment advice. In October, pig prices broke through the previous consolidation range of 20-24 yuan / kg, and further reached 29-30 yuan / kg, with a recent pullback. From the perspective of pre-production capacity changes, we expect that pig prices will continue to rise in the fourth quarter. Benefiting from this, the profit level of the company's breeding business is expected to continue to rise. Taking into account the impact of the continued rise in raw material prices, slightly lowered the profit forecast, the company is expected to return to the mother of the company's 23-year net profit of 501 million yuan, corresponding to PE of 7.6pm 12.15 times, maintaining the "buy" rating.
Risk hint: chicken prices rose less than expected in the fourth quarter, and chicken production capacity was released less than expected.