Performance summary: the company achieved operating income of 440 million yuan in the first quarter of 2022, an increase of 49.7% over the same period last year, and its net profit was 20.416 million yuan, an increase of 1085.5% over the same period last year. The net profit after deducting non-return was 17.315 million yuan, an increase of 550% over the same period last year.
Comments: the company's performance growth is mainly due to the continued growth of seed business, mainly hybrid rice, hybrid corn and other varieties of good market performance, sales increased compared with the same period last year. According to customs data, China imported 28.35 million tons of corn in 2021, an increase of 151% over the same period last year. Overall grain imports totaled 65.376 million tons, up 82.7 percent over the same period last year, while imports totaled US $20.07 billion, up 110 percent. According to the January-February data in 2022, grain imports were 10.821 million tons, down 1.1 percent from the same period last year, while imports reached US $3.73 billion, an increase of 21.9 percent. The state attaches great importance to food security, farmers have high enthusiasm for planting, and the Ministry of Agriculture and Village and the Ministry of Finance have clearly defined the policy support for the key work of grain production in 2022, which mentioned the stable implementation of subsidies for the protection of cultivated land and the issuance of one-time subsidies to actual grain growers. to alleviate the impact of rising agricultural prices, the company has high quality seeds and good long-term performance in the future.
The work related to genetically modified seeds has been carried out smoothly, and if it can be commercialized smoothly, there will be a broad market space, the development of the seed industry will be gradually standardized, and the development environment of seed enterprises with real R & D strength will be optimized. The Central Committee document No. 1 issued by the CPC Central Committee and the State Council clearly pointed out the importance of food security and seed security; similarly, in the three tasks clearly defined in the seed issue at the Central Economic work Conference, it was also mentioned to carry out provenance "sticking neck" technology to tackle key problems, determined to fight a turnaround. In July 2021, the meeting of the Central Deep Reform Commission examined and adopted the Action Plan for Revitalizing the seed Industry, emphasizing the importance of food security. in order to implement the relevant requirements, the office of the National crop Variety approval Committee organized and revised the national maize and rice variety approval standards to adjust the number of differential loci in order to increase the requirements of consistency and authenticity in the basic conditions of corn and rice. In addition, domestic GM will usher in a huge market of standardization and healthy competition, and if industrialization can be realized in the future, the resulting market space will be divided among seeds, farmers, and land. Tsuen Yin Hi-Tech will benefit from it as a high-quality high-tech seed industry enterprise with the integration of breeding, reproduction and promotion. According to China's national review evaluation data, the rice quality of Tsuen Yin varieties is excellent (the main force is 1-2, usually at level 3), while other indicators are also ahead of the industry, in line with the trend of upgrading residents' consumption habits in the future, and the market share is expected to increase to 20%. Further boost the company's rice business sales income growth. At the same time, the company pays attention to R & D and innovation and promotes product iteration. in 2021, the company and its holding subsidiaries added or realized 97 varieties of multi-regional national examination through independent or cooperative breeding, including 92 for rice and 5 for corn.
Climate and the uncertainty of the international situation brought about by the Russian-Ukrainian War make global food prices on the high side, superimposed countries attach great importance to food security, farmers' enthusiasm for planting is high, and the demand for seeds increases. The area of spring sowing in Ukraine has declined due to the geographical conflict, which mainly includes crops such as corn and barley. According to the latest news released by Ukraine's Minister of Agriculture, its food production may decrease by about 54.6% in 2022. In terms of rice, with the approval of the State Council, the minimum purchase prices of early indica rice (third grade), medium and late indica rice and japonica rice produced in 2022 are 124 yuan, 129 yuan and 131 yuan per 50 kg respectively, an increase of 2 yuan, 1 yuan and 1 yuan respectively. It will be further raised on the basis of 2021. Global corn prices are still rising. The La Nina phenomenon appeared for the second year in a row at the end of the 21st year, which is expected to aggravate rainfall and drought around the world, thus affecting the yield of food crops.
The high-tech seed industry enterprises have some layout in rice, corn, wheat and other fields, and their performance is expected to improve with the planting boom.
Profit forecast and investment advice. It is estimated that the EPS from 2022 to 2024 is 0.50,0.67 and 0.92 yuan respectively, and the corresponding PE is twice as much as that in 43-32-23. Maintain a "buy" rating.
Risk tips: market competition may intensify, the company's product sales may fall short of expectations, etc.