Leshan Giantstar Farming&Husbandry Corporation Limited(603477) (603477)
Leshan Giantstar Farming&Husbandry Corporation Limited(603477) , provide pork food with extreme efficiency, and give a “buy” rating for the first time
The predecessor of the company was Zhenjing Co., Ltd. and the company completed asset restructuring in July 2020. At present, the company’s main business is breeding business, and its main products are pigs, yellow feather chickens, feed and cow leather products. In the first three quarters of 2021, the company’s aquaculture business contributed 90% of its total revenue. In the downward phase of the cycle, the company has both industry-leading cost advantages and comparative capital advantages. The company is expected to realize the countercyclical expansion of breeding capacity and achieve large-scale marketing in the upward phase of the next cycle. We estimate that from 2021 to 2023, the number of pigs sold by the company will be 1 / 2 / 5 million respectively. Based on this, we are optimistic about the comprehensive advantages of the company’s breeding in the future. We expect that the net profit attributable to the parent company from 2021 to 2023 will be RMB 261 / – 215 / 2270 million, EPS will be RMB 0.52 / – 0.42/4.48, and the corresponding PE of the current stock price will be 29.5 / – 35.9/3.4 times; The first coverage is given a “buy” rating.
Focus on “integrated” breeding to realize independent and controllable breeding in the whole process, cost reduction and efficiency increase
The core advantage of the “integrated” breeding model is not the difference in labor cost and breeding efficiency, but to better realize the autonomy and controllability of the whole breeding link. On the one hand, “grain into meat out” is the general direction of reform in China’s aquaculture industry, which will better ensure China’s food safety; On the other hand, in the post plague era, the breeding industry began to pay more attention to the independent and controllable ability of biosafety control. The high biosafety coefficient means that the ability of enterprises to resist systemic risks is enhanced, and then it is easier to maximize economic benefits on the premise of stable production and supply. Leshan Giantstar Farming&Husbandry Corporation Limited(603477) in the future, we will focus on the development of integrated breeding mode, and the new and under construction production capacity are integrated projects.
The company has both cost leadership and capital advantages, and is expected to achieve reverse cycle capacity leap
The company integrates global high-quality resources and scientific breeding. In terms of breeding, the company has reached in-depth cooperation with pic, and the psy of the company has reached 27 heads / year in recent two years. In terms of breeding management, the company has carried out in-depth cooperation with Pipestone, and all production indicators have reached the top level of the industry. In the first half of 2021, the weaning cost of the company’s piglets was 320 yuan / head, and the breeding cost of fattening pigs was about 16.5 yuan / kg; It is estimated that the annual breeding cost in 2021 will be 17.7 yuan / kg; It is expected that the company’s fattening pig breeding cost is expected to drop to 16.5 yuan / kg in 2022. In addition, the company has both internal and external capital advantages, and the breeding scale is expected to achieve reverse cycle leap.
Risk warning: systemic risk caused by repeated non plague situations; The rhythm of financing and capacity expansion in the later stage; Low consumption inhibits the rebound rhythm of pig prices, etc.
