\u3000\u30 Beijing Telesound Electronics Co.Ltd(003004) 98 Wens Foodstuff Group Co.Ltd(300498) )
Key investment points:
Reversal of pig price: 2.74 million sows can be bred, and the capacity removal in 22 years is expected to accelerate. June 2021 is the high point of breeding sows. According to the estimation of breeding cycle, April May of 22 years is expected to be the lowest point of pig price. From the perspective of capital, the current pig loss period is shorter than the previous round, and there is no large-scale capital chain fracture yet; In terms of sow efficiency, three yuan elimination and two yuan compensation, and the efficiency MSY of fertile sows is expected to return to 18 in 2022; From the emotional point of view, the profit-making effect of the 2020 pig cycle makes farmers wait-and-see to make up the fence. From June 2021 to now, the stock of fertile sows has been reduced by 6%. We expect that the price of 22h1 pig will still be in the downward channel, the price of 2022q2-q3 pig may have an inflection point, and the price of pig is expected to rise in 2023.
Marketing growth: the company's marketing volume has an upward inflection point, and it is expected to grow steadily in the future. From 2019 to 2020, affected by non plague, the annual pig slaughter volume of the company decreased significantly. In 2019 and 2020, the company's commercial pig slaughter volume decreased to 18.52 million and 9.55 million respectively, with an annual decline of 17.0% and 48.4% respectively, while the pig slaughter volume has recovered to 132174 million in 2021. By the end of 2021, the company has about 1 million high-performance breeding sows, and the number of GP, GGP and backup sows is sufficient. We expect that the population size of the company will be sufficient to support the marketing goal in the next two years.
Cost optimization: the breeding cost of the company has improved significantly, and there is still room for decline in the future.
Affected by non plague, in 2020, the book value of the company's purchased breeding pigs accounted for 36% of the book value of the new breeding pigs, and the number of the company's purchased piglets surged. In 2020, the company's full cost increased significantly. In May 2021, the company stopped purchasing piglets, and the purchased piglets were basically sold in November of the same year. By the end of 2021, the company's full cost had decreased to 17.4 yuan / kg. The company's total cost has improved significantly, and the company's target cost in 2022 is 15.6 yuan / kg. With the decline of piglet cost and the optimization of company management, the company's complete cost still has room to decline.
Earnings forecast, valuation and rating
We expect that the company's BPS will be 5.5/5.7/7.1 yuan / share from 2021 to 2023, the CAGR will be 13.33% in two years, and the corresponding Pb will be 3.5x/3.4x/2.8x respectively. The company has significantly improved costs and abundant cash flow, and has expanded rapidly with the "company + farmers" model. Considering that the average valuation level of the pig industry is 4.26 times, considering the leading position of the company in the industry, the company is given 4.5xpb of pig business; With reference to the average valuation of the yellow feather chicken industry, 19xpe was given to the company's broiler business. Raise the target price to 25 yuan and maintain the "buy" rating.
Risk warning: inventory impairment risk, animal epidemic outbreak risk and price fluctuation risk
