Winall Hi-Tech Seed Co.Ltd(300087) (300087)
event:
On December 10, the company issued the suggestive announcement on the free transfer of state-owned shares of the controlling shareholder, and the controlling shareholder modern agriculture transferred its 92.52 million shares of the company to Zhongzhong group free of charge. After the change, Zhongzhong group will control 128 million shares of the company, accounting for 28.17% of the issued shares of the company, become the controlling shareholder of the company, and the actual controller is still SASAC of the State Council.
comment:
The management caliber of Syngenta seed industry sector is smooth, which is conducive to the company to enhance the influence of seed industry.
Zhongzhong group is an integrated enterprise of breeding, propagation and promotion with crop seeds as the main business. It is a wholly-owned subsidiary of Syngenta group. There are 11 core seed companies directly or indirectly controlled by Zhongzhong group. After this equity change, Syngenta seed industry sector is expected to further realize resource integration and technical collaboration, which is conducive to China seed group to build a “China’s first and world-class” national seed industry enterprise, and improve the comprehensive competitiveness of Winall Hi-Tech Seed Co.Ltd(300087) industry. In terms of horizontal competition with listed companies, Zhongzhong group has issued a letter of commitment. Within five years from the date of this equity change, based on the principle of being conducive to the development of listed companies and safeguarding the interests of shareholders, especially the interests of small and medium-sized shareholders, Zhongzhong group will comprehensively promote relevant business integration by means of asset restructuring, business adjustment, entrusted management, establishment of joint ventures and so on.
With the superposition of cyclical boom and the continuous catalysis of national policies, the seed plate is expected to usher in a double-click.
As of September 2021, there were 438 million pigs in stock, with a year-on-year increase of 18.2% and a slight decrease of 0.3% month on month. The demand for feed is still strong. At the end of the 20 / 21 planting season, the corn inventory consumption ratio is about 40%, the inventory suppression is basically relieved, and the seed boom range is expected to continue until 2023. The seed industry policy continued to catalyze. On September 8, the Ministry of agriculture and rural areas published an article saying that the central government would soon issue the action plan; On September 18, the period of soliciting public opinions on the draft seed law will end; The new variety approval scheme has been implemented since October 1; On December 8-10, the central economic work conference proposed to “put the improvement of comprehensive agricultural production capacity in a more prominent position” and “deeply implement the action of seed industry revitalization”.
Earnings forecast, valuation and rating
Maintain eps0 43 / 0.54/0.68 yuan forecast, three-year CAGR 33%, corresponding to pe74x / 58x / 47x. With reference to the average valuation of comparable companies, and the company is expected to overtake on the curve with Syngenta, give a valuation premium, give a 22-year 70X PE, and maintain a “buy” rating with a target price of 37.8 yuan.
Risk statement
The launch of new varieties did not meet expectations; Commodity price fluctuation risk; Natural disasters affect seed production
