\u3000\u3000 Orient Group Incorporation(600811) (600811)
Event overview
The company issued the announcement of annual performance loss in 2021. During the reporting period, the net profit attributable to listed shareholders is expected to be – 1.3 billion yuan to – 1.5 billion yuan, a year-on-year decrease of 641.67% – 725.00%; It is expected to realize the net profit attributable to listed shareholders from minus 1.15 billion yuan to minus 1.35 billion yuan, a year-on-year decrease of 1985.25% – 2313.11%; The real estate business segment is expected to withdraw the total impairment of about 800 million yuan to 950 million yuan, and the net profit is expected to be about – 1.7 billion yuan to – 1.9 billion yuan.
Analysis and judgment:
The real estate sector dragged down performance and stripped off as soon as possible to reduce losses
In 2021, affected by covid-19 pneumonia, Beijing property market regulation policies and new regulations on capital financing supervision of real estate enterprises, the company’s real estate business sector suffered huge losses, which dragged down the company’s performance. Specifically, there was oversupply in the area where the first and second level land development projects of CDB Oriental were located, the progress of relevant projects was slow, and the return of funds did not meet expectations, The company expects to accrue asset impairment loss and credit impairment loss respectively for relevant inventories and other receivables in the annual report of 2021, with a total of about 800 million yuan to 950 million yuan. The real estate business sector is expected to realize a net profit of – 1.7 billion yuan to – 1.9 billion yuan. According to China Securities Network, the company will not increase investment in the real estate sector in the future, and will try its best to revitalize and strip the stock land assets, Recover the project investment, accelerate the realization of assets and reduce losses, and return to the main business.
Build a new highland of scientific and technological innovation and focus on new projects of extracting potassium from seawater
For nearly 15 years, the company has paid close attention to the innovative development of upstream and downstream agriculture and actively carried out R & D cooperation. According to China Securities Network, the company recently took extracting potassium from seawater as one of the key projects. Potassium fertilizer is an irreplaceable basic fertilizer for agricultural planting. However, China’s potassium mineral resources are scarce and heavily dependent on imports. The report points out that the company’s R & D team has made key breakthroughs in the core technology of potassium ion seawater separation through a series of experiments, which is currently in the pilot stage. The results of continuous laboratory data monitoring from December 2021 to now are much higher than the comparative data of relevant industry literature. Now, the effect is expected to meet the requirements of industrialization and transformation. If the technology can be successfully industrialized in the future, the company’s profit is expected to achieve a breakthrough.
The core business is stable, and the development of “artificial meat” can be expected
The company’s core business is modern agriculture and healthy food industry, and the operation is stable. In terms of rice sales business, the company adjusted its focus to the new retail format of community group purchase, focused on expanding online channels and settled in a number of e-commerce platforms; In terms of oil business, it has maintained long-term friendly cooperation with well-known oil brand enterprises in China, and actively expanded its customer base in terms of oil and meal sales channels, with obvious advantages in sales and channels; In terms of “artificial meat”, according to the latest report of China Securities Network, the company has also made some achievements in plant-based artificial meat. The high moisture plant meat project is in the stage of market cultivation and optimization. At present, the company is cooperating with a number of catering institutions and dealers. The company is now promoting the listing of semi-finished products of high moisture plant protein meat, with more than 30 varieties in reserve, and is still in continuous research and development, The company has also developed Zero sugar and zero cholesterol vegetable protein meat, which tastes good and easy to cook. In the future, the company will further develop prefabricated dishes, expand the C-end consumer market, produce higher quality and high moisture vegetable protein meat products that meet the needs of the market, and improve the brand influence and market share. We believe that relying on its advantages of low fat, low sugar, high protein and environmental protection, “artificial meat” has a broad market space in the future. The company actively explores and continues research and development, which is expected to give full play to the advantages of the whole industrial chain of Shenzhen Agricultural Products Group Co.Ltd(000061) processing and sales, and further release the space for profit promotion.
Investment advice
Considering the possible losses when the company divested the real estate business sector and the increase in investment brought by continuous scientific and technological R & D and innovation when focusing on the main business of modern agriculture and healthy food industry, we lowered the company’s revenue forecast for 21-22 years to 16.279/17.908 billion yuan (the previous values were 19.157/23.189 billion yuan respectively), The net profit attributable to the parent company was reduced to -1418 / 871 million yuan (the previous value was 681 / 825 million yuan respectively), and the new forecast was that in 2023, the company’s revenue was 19.7 billion yuan and the net profit attributable to the parent company was 934 million yuan. To sum up, we expect that from 2021 to 2023, the company’s EPS will be -0.38/0.23/0.25 yuan respectively, corresponding to the closing price of 2.88 yuan / share on January 28, 2022, and PE will be -7.6/12.3/11.5 times respectively, maintaining the “overweight” rating of the company.
Risk tips
Shenzhen Agricultural Products Group Co.Ltd(000061) price fluctuation risk, policy disturbance risk, and the industrialization process of potassium fertilizer production is less than expected risk
