\u3000\u3000 Joyvio Food Co.Ltd(300268) (300268)
Event overview
The company released the annual performance forecast for 2021. During the reporting period, the net profit attributable to the parent company was a loss of 170-300 million yuan, compared with 710 million yuan in the same period last year. Among them, if the impairment is not considered, the net profit attributable to the parent company in the fourth quarter is a loss of 24-44 million yuan, and the net profit attributable to the parent company in the third quarter is 30 million yuan. The consolidated goodwill of the company shows signs of impairment of about 20-170 million yuan, and the impairment of 150 million yuan involving the Chilean subsidiary australis has not been recognized.
Analysis and judgment:
Salmon demand recovered and performance improved significantly
In 2021, thanks to the active control of the global epidemic, the demand for salmon recovered, and the price of the company’s products rose simultaneously, which promoted the company to turn losses into profits in the second and third quarters. Among them, the Chilean subsidiary australis realized a net profit of 88 million yuan in the third quarter, and the gross profit margin rose sharply to 22%; The net profit attributable to the parent company in the fourth quarter was a loss, which dragged down the net profit of the whole year, mainly due to the high overall cost of the company. However, on the whole, the trend of gradual recovery of the company’s performance is obvious, and the performance of the whole year has decreased significantly year-on-year. In the future, the gradual improvement of the global epidemic will drive the demand for salmon to continue to pick up. The growth of the supply side is limited under the restriction of the number of breeding licenses. The company’s products are expected to increase both volume and price, supporting the performance to turn losses into profits.
In the post epidemic era, the cost is expected to improve gradually
In 2021, the global epidemic became normalized, the company’s labor employment costs, cross-border logistics costs and storage costs increased, and the efficiency of salmon seedling approval was also affected. After the superposition of debt acquisition of australis, the financial expenses were at a high level, the overall cost of the company was high, and the profit level was significantly affected. However, looking forward to 2022 and 2023, it is expected that with the gradual improvement of the global epidemic, the relevant operating costs of the company will be effectively controlled. In addition, with the completion and operation of the company’s Chilean salmon intelligent factory project in the future, it will completely solve the problem of nearby production and processing in Magellan District, promote the overall improvement of breeding and processing efficiency and product quality, and realize cost reduction and efficiency increase. On the other hand, the controlling shareholder jiawo group will continue to vigorously support the company’s equity financing, debt to equity swap and the introduction of strategic investors, so that the company’s debt structure may be improved in the future and further release profit space, in addition to subscribing for all private placement shares of the company with 416 million yuan in 2020.
Firmly control the scarce high-quality resources in the upstream, and the profit is expected to increase
Salmon requires high growth environment, and the global suitable sea area is limited and irreplaceable. In addition, salmon farming has high requirements for enterprise industrialization and intelligence, and licenses are extremely scarce. Norway, the world’s main production area, is only issued in a small amount by auction, while Chile has stopped issuing. The company acquired australis in 2019. It has breeding licenses in many regions of Chile, and has 29 licenses in the 12 regions with the largest development space in the future, with the largest output in this region. In addition, australis has taken the lead in establishing an industrialized and information-based breeding system, with strong quality control strength and world-class breeding technology and operation level. From 2010 to 2019, the global salmon sales CAGR reached 7%, and the consumption volume continued to grow; Under the background of stricter aquaculture regulation, the supply side capacity expansion is limited, and the supply-demand gap promotes the rise of the price center. The company prospectively acquires the scarce resources of upstream salmon to ensure the space for capacity improvement in the future, consolidate the leading position, and is expected to fully benefit from the price rise, so as to increase profits.
Investment advice
Considering that the volume and price of the company’s salmon products have increased simultaneously and the performance has improved significantly, but the overall performance is a loss, we lowered the company’s revenue forecast from 2021 to 2022 to 5.789/6.869 billion yuan (the previous values were 6.154/7.298 billion yuan respectively) and the net profit attributable to the parent company to -191/156 million yuan (the previous values were 86 / 196 million yuan respectively). Considering that the improvement of the global epidemic will drive the recovery of seafood consumption in the future, the company has mastered the core scarce resources in the upstream. It is newly predicted that in 2023, the company’s revenue will be 8.161 billion yuan and the net profit attributable to the parent company will be 403 million yuan. To sum up, we expect that the company’s EPS from 2021 to 2023 will be -1.10/0.89/2.31 yuan respectively, corresponding to the closing price of 17.47 yuan / share on January 28, 2022, and PE will be – 16 / 20 / 8x respectively, maintaining the “overweight” rating.
Risk tips
Epidemic risk, salmon price recovery is less than expected risk, and policy disturbance risk.
