\u3000\u3000 Wens Foodstuff Group Co.Ltd(300498) (300498)
Performance express: in 2021, the company achieved an operating revenue of 64.96 billion yuan, a year-on-year decrease of 13.3%, and the net profit attributable to the parent company was -13.37 billion yuan, a year-on-year decrease of 279.6%.
Comments: the loss of the company was mainly affected by the pig price. In 2021, the company sold 13.217 million pigs, and the average price of hairy pigs was 17.4 yuan / kg, a year-on-year decrease of 48.2%. At the same time, the feed price continued to rise, the cost of outsourcing some piglets was high, and the structure of breeding sows continued to be optimized, which made the breeding cost of the company high; The company in the yellow feather chicken breeding sector sold 1.1 billion broilers, with a year-on-year increase of 4.8%, and 57.979 million ducks, with a year-on-year increase of 1.9%. During the reporting period, the poultry breeding market was good, the production performance maintained a historically high level for many consecutive months, and achieved overall profits while the feed cost was at a high level.
The company’s profitability is gradually restored and its future performance is expected to grow. The outbreak of African swine fever in 2018 had a great impact on pig breeding in China. The pig price reached 41 yuan / kg around November 2019, a record high. Since then, the price has been falling continuously since 2021, reaching 11 yuan / kg around October, and maintaining the level of 12-13 yuan / kg at this stage; In the medium and long term, the supply of pork is guaranteed. From the perspective of fertile sows, the trend of capacity removal is emerging, and it still takes time to clear, and the backward production capacity will be eliminated first in the elimination process, so as to form a structural adjustment. Taking into account the current development of productivity indicators such as psy of fertile sows, although the trend of capacity removal appears, However, in the future, it is still necessary for pig prices to remain at a low level for a period of time before further clearing of production capacity can be ushered in. The impact of non swine fever on the company’s pig breeding business is mainly reflected in three aspects: structure, slaughter volume and breeding cost: affected by African swine fever virus, the company eliminated some sows threatened by the virus and responded by outsourcing piglets for fattening sales. In 2020, the productive biological assets of the balance sheet showed that the outsourcing amount reached 5.19 billion yuan, a year-on-year increase of 117 times, Outsourcing accounted for about 36% of the new increase, compared with 0.9% in 19 years. The company’s epidemic prevention ability has been improved, the proportion of high-efficiency breeding sows has been increased, and the structure has been optimized. The outsourcing of piglets has been stopped in May 2021. The slaughter volume of the company has rebounded steadily. The slaughter volume of pigs in 2020 and 2021 were 9.55 million and 13.217 million respectively. The slaughter volume of the company has gradually recovered from the impact of non plague. On the breeding cost side, due to the outsourcing of piglets, epidemic prevention expenses and other reasons, the company’s complete cost increased, reaching 30 yuan / kg in the first quarter of 21. After making efforts to control it, it gradually reduced. The company’s goal is to control the cost at 17.5 yuan / kg by the end of 2021, superimposed with the increase of slaughter volume, and the elasticity of profit level is large
The yellow feather chicken breeding business has developed steadily. As of November 2021, the production capacity of yellow feather chicken of the parents’ generation in production was about 13.4 million sets, a year-on-year decrease of 8.1%. Since August 21, the price of wool chicken has increased. In November, the market price of wool chicken was about 16 yuan / kg, a year-on-year increase of 15.3%. On the other hand, the state said that it would severely crack down on the illegal trade of wild animals, prohibit the consumption of wild animals, restrict the trading and slaughter of live birds, encourage places with conditions to promote the centralized slaughter of live birds, and gradually cancel the live bird trading market. Nearly 80% of the sales of yellow feather chicken will go through the live bird market channel, and retail investors will withdraw from the market affected by this, Large scale breeding enterprises divide up this. The company promoted the transformation and upgrading of the poultry industry. In the first half of 2021, the listing rate of hairy chicken reached 94.5% and the feed meat ratio of broiler was lower than 2.9. Based on the general principle of “balance of volume and price” and according to market changes, the company adopted contract sales and hairy fresh linkage to maintain and stabilize the sales price of broiler and maximize business benefits.
Profit forecast and investment suggestions. Due to the recovery of national pig production capacity and the relatively low pork price, the company’s profit forecast is adjusted. It is estimated that the EPS from 2021 to 2023 will be -2.10 yuan, 0.09 yuan and 1.71 yuan respectively, and the corresponding PE will be – 10 / 227 / 12 times respectively. Maintain the “buy” rating.
Risk tip: African swine plague rebounded; Pig price fluctuation; The production progress of the project is less than expected.
