\u3000\u3000 Muyuan Foods Co.Ltd(002714) (002714)
Core view:
The event company issued the 2022 restricted stock incentive plan (Draft).
The equity incentive plan shows confidence in future development. The company announced the restricted stock incentive plan for 2022, which plans to grant 81.807 million restricted shares, accounting for 1.54% of the total share capital of the company; Among them, 80% is granted for the first time and 20% is reserved. The grant price is 30.52 yuan / share. The total number of awarding objects is 6093, including directors, senior executives, core management / technical / business personnel of the company (holding subsidiaries). The performance assessment target is based on the sales volume of pigs in 2021, with the growth rate of no less than 25% and 40% in 22 and 23 years respectively. Compared with the 2019 plan, the scale of this equity incentive plan is greatly expanded, and the incentive objects are increased from 915 to 6093, which fully mobilize the enthusiasm of core talents, effectively combine the interests of shareholders, the company and the individual interests of managers, and the internal management efficiency is expected to be further improved.
In the past 21 years, the number of pigs in the market has increased rapidly, maintaining the comparative advantage of cost. In 2021, the company sold a total of 40.264 million pigs (year-on-year + 122.3%), including 36.887 million commercial pigs, 3.095 million piglets and 281000 breeding pigs. While maintaining the high growth of pig marketing, the complete cost of pig breeding shows a downward trend quarter by quarter. We estimate that the complete cost of pig breeding will decrease from 16.1 yuan / kg in Q1 to 14.8 yuan / kg in Q4 in 21 years. Compared with large-scale enterprises in the industry, the company has significant cost advantages. In the downward process / bottom grinding process of pig cycle, cost advantage is one of the core concerns, and the company has significant comparative advantages.
In the brewing of a new round of pig upward cycle, we are optimistic about the future development of the company. Since the bottom of the new round of pig cycle in October 21, the attention has gradually increased. At present, we think it is in the process of going to the second bottom. The production capacity of fertile sows continues to be cleared, and the pig price has experienced the trend of bottom – rebound – continuous downward exploration. Combined with the trend of simultaneous downward exploration of piglet and sow prices, it is in line with the trend of W bottom. At the same time, the profit of self breeding and autotrophic breeding entered the loss range again, with an average monthly profit of -249.3 yuan / head in January of 22 years, and the loss increased in February. Therefore, for pig prices, we are waiting for the arrival of the second bottom in the middle of the year. For investment attributes, the current is the best time point for allocation. We expect the company to maintain a rapid growth trend in pig marketing in the past 22 years, with the trend of gradual optimization of superimposed costs. We are optimistic about the steady development of the company.
The investment suggestion company is a leader in the pig breeding industry. With high growth of pigs and significant cost advantage, it can better resist risks in the downward process of pig cycle. In the fourth quarter of the 21st century, we have emphasized that the layout is the best choice when the company has a loss in a single quarter, and for the present, grasping the present is the key. We predict that the EPS from 2022 to 2023 will be 1.63 yuan and 2.41 yuan respectively, corresponding to 36 and 25 times of PE.
Risk tips
1. Risks of animal diseases and natural disasters;
2. Risk of raw material supply and price fluctuation;
3. Risk of pig price fluctuation;
4. Risk of policy change;
5. Risks of food safety.
