Events:
Zhengbang Science and Technology released three quarterly results: the total operating income in the first three quarters of 2021 was 39.971 billion yuan, an increase of 22.59% over the same period last year. The net profit returned to the mother was-7.627 billion yuan, from profit to loss, with a profit of 5.433 billion yuan in the same period last year. Among them, the total operating income in the third quarter was 13.292 billion yuan, a decrease of 17.21% over the same period last year. The net profit returned to the mother was-6.197 billion yuan, from profit to loss, with a profit of 3.016 billion yuan in the same period last year.
Main points of investment:
The number of live pigs doubled in the first three quarters compared with the same period last year. The pig cycle maintained a downward trend in the third quarter, and pig prices fell further, entering the industry-wide loss, and fell to around 10 yuan / kg at the end of the third quarter.
Affected by this, the company's net profit in the third quarter was-6.197 billion yuan (including 1.019 billion yuan in impairment of assets), and the loss was further aggravated compared with the second quarter. The total net profit in the first three quarters was-7.627 billion yuan (including 1.222 billion yuan in impairment of assets). In terms of the number of pigs, 2021Q3 produced 4.84 million live pigs, an increase of 51.2 percent over the same period last year. A total of 11.84 million pigs were produced in the first three quarters, double that of the same period last year, and the number of live pigs increased significantly. According to the 21-year equity incentive plan target volume of 20 million, the first three quarters completed 59%, due to low pig prices, the company slowed down the pace of hurdles in September. By the end of the third quarter, the company's productive biological assets decreased by 37.2% compared with the same period last year, projects under construction increased by 17.4%, and fixed assets increased by 37.2%.
The income from feed sales has increased significantly. The national pig feed demand increased significantly in the first three quarters of 2021.
The company's feed sector revenue increased by 43.0% in the first half of the year compared with the same period last year, and continued to improve in the third quarter. It is expected that the income and profit of the feed sector will increase significantly for the whole year. In 2020, the company's feed revenue accounted for about 28%.
The elimination of sows is basically completed, and the breeding cost is expected to decrease. The company basically completed the elimination of sows in the first half of the year, and with the performance of the original breed pigs in the second half of next year, the cost is expected to decline further.
The complete cost of 2021Q2 is about 19.9yuan / kg. Without considering the amortization of eliminated sows, the complete cost of fattening pigs is 19.55yuan / kg. The company's breeding costs will continue to fall next year.
The profit forecast and investment rating estimate that the company's revenue in 2021-2023 will be 588.2max 152.22 billion yuan, the net profit of its parent will be-91.56 billion yuan, and the EPS will be-3.60 million and 1.41 billion yuan per share respectively, and the corresponding PE will be-/-/ 2.83 times.
Considering that the original pigs introduced by the company before the second half of next year will be effective, reduce the cost of fencing and maintain the "overweight" rating.
The risk suggests that the company's performance is lower than expected, the spread of the epidemic affects the column, and the cost of feed raw materials rises sharply.