This report is read as follows:
2022Q1 performance exceeded expectations, the company's breeding costs gradually decreased, and the post-cycle business developed steadily. The company's financial position and solvency are good, and the volume of the company is expected to grow rapidly in the future.
Main points of investment:
Maintain the "overweight" rating and raise the target price to 13.44 yuan. Based on the decline in pig prices and the rise in agricultural prices, the forecast is lowered by 2022, the forecast for 2023 is raised, and the forecast for 2024 is increased. The EPS is expected to be-0.12 / 1.13 (0.95) / 1.62 yuan per share in 2022-2024. With the increase of losses in the industry, the stock of fertile sows continued to decline, and the pig cycle reversed and expected to increase, so the profit forecast was adjusted and the target price was raised. By using the segment valuation method, the market capitalization of feed plate 15XPE, animal protection plate 25XPE and breeding board in 2022 was 3500 yuan, and the target market value of feed, animal protection and breeding plate was 3 billion, 7.5 billion and 7.7 billion respectively, with a total target market value of 18.2 billion, and the target price was raised to 13.44 yuan. Maintain the "overweight" rating.
The performance in 2021 was lower than expected, while the performance of 2022Q1 exceeded expectations. Due to the high fattening cost of some of the piglets purchased by the company in 2021 and the 385 million provision for inventory price decline in the 2021 annual report, the performance in 2021 was lower than previously expected. 2022Q1 expects the company's aquaculture business to make a profit of-170 million, and the full cost of farming is expected to exceed 18 yuan / kg.
After the steady development of business cycle, aquaculture costs are expected to continue to decline. The stock of downstream aquaculture decreased marginally, but 2022Q1's feed sales continued to grow and animal protection business revenue grew year-on-year, and the business developed steadily after the cycle. The fattening cost of the company in Xinjiang is 150.16 yuan / kg, and the complete fattening cost is more than 18 yuan / kg. With the increase of capacity utilization, the overall fattening cost of the company is expected to reduce in 2022.
The financial situation and solvency are good, and the flexibility is expected to exceed expectations. The 2021 annual report and 2022Q1 maintain an asset-liability ratio of 55% to 56%, monetary funds of 2.322 billion in 2022Q1, and the company's current cash flow is good. It is estimated that the company will produce 2.2 million pigs in 2022 and 5 million pigs in 2023. The company's current financial situation and debt-paying ability provide sufficient protection for the company's future aquaculture business expansion.
Risk tips: epidemic risk, raw material price fluctuation risk.