Tecon Biology Co.Ltd(002100) (002100)
Event: the company recently released the monthly sales report for November. 122600 pigs were sold in November, with a month on month increase of 6.33% and a year-on-year decrease of 32.04%; The sales revenue was RMB 229 million, with a month on month increase of 32.37% and a year-on-year decrease of 34.38%;
The slaughter volume of live pigs increased steadily, and the selling price rebounded sharply. In the first November of 2021, 1456000 pigs were sold, with a year-on-year increase of 32.3%. It is expected that 1.6 + million pigs will be sold in the whole year, with a year-on-year increase of about 30%. In November, the average selling price of the company’s commercial pigs was 15.26 yuan / kg, with a month on month increase of 30.87%. The selling price was basically the same as that of pigs in Xinjiang (15.44 yuan / kg in Shihezi). The month on month increase was higher than that in the region (21.1% month on month increase in November in Shihezi), indicating that the company had high production efficiency and did not eliminate inefficient sows to lower the average selling price.
The cost of pig breeding is low and the location advantage is obvious. In 2021 / Q3, the complete fattening cost of self raised piglets in Xinjiang base of the company was close to 15 yuan / kg, which was significantly lower than the national average level. It is expected that the overall cost of 2021 / Q4 will be further reduced with the reduction of fattening quantity of purchased piglets.
Other businesses have good growth, strong cash creation ability and improved the overall anti risk ability. The compound growth rate of feed sales of the company in 18-20 years is 22%, and the growth rate of 21 / H1 is 49.7%; The gross profit margin of animal insurance business increased by 10 percentage points in 18-20 years, and 21 / H1 increased by 2.5 percentage points over the previous year. The oil processing and grain collection and storage business has the first market share in Xinjiang, with obvious scale advantages. These businesses are current Taurus businesses, which effectively improves the company’s overall anti risk ability.
The fund is in good condition, and the listing flexibility may exceed expectations. The company aims to sell 5 million pigs in 2023, corresponding to the average compound growth rate of 21-23 years or 70% +. At the end of 21 / Q3, the company’s asset liability ratio was 54.78%, and the cash to maturity debt ratio was 104.43. In 2021, the company raised 2.067 billion yuan by non-public offering of shares. On the whole, the company’s capital situation is good, and there is a strong capital guarantee for the expansion of breeding business in the future.
Considering that after the recent rebound of pig price, the provision for asset impairment is expected to be reversed in a large amount, and the production efficiency is significantly improved after the optimization of sow structure, we raise the profit forecast and predict that the net profit attributable to mothers in 2021 / 2022 / 2023 will be RMB 191 / 3.02/1.625 billion. Give the company 2.63 times Pb in 22 years, the corresponding target price is 15.82 yuan, 60 +% space from the current price, and give a “buy” rating.
