\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 975 Hunan New Wellful Co.Ltd(600975) )
The company is a state-owned listed leading enterprise in Hunan pig breeding industry
Hunan New Wellful Co.Ltd(600975) is an export-oriented listed company controlled by the state owned assets supervision and Administration Commission of Hunan Province. After years of development, it has established a whole industrial chain layout based on pig breeding, breeding pigs, commercial pigs, slaughtering pigs and meat products processing, cold chain logistics and pig trading. In 2021, the company sold about 450000 pigs, making it the second largest listed pig breeding enterprise in the province. Since 2009, the company has shifted its industrial layout from export to domestic sales, opening up growth space. The income of breeding business has increased from 481 million yuan in 2007 to 1.327 billion yuan in 2020, with an annual compound growth rate of 8%.
Realize the high-quality and rapid development of pig breeding business through the asset light mode of leasing breeding
In the leasing pig farm breeding mode, the company cooperates with related parties or social enterprises, the partners construct according to the company's design drawings, and the company signs a long-term lease contract with the contractor only after the supervisor's acceptance meets the standard requirements. The biggest advantage of this model is that it has low capital pressure and strong epidemic prevention ability. In 2021, the company actually delivered more than 50000 sows to lease farms, 40 fattening lease farms, and about 700000 new fattening capacity. The productive biological assets of 2021q3 company increased by 293% compared with the end of 2020. The use right assets increased by 174% compared with the end of 2020. In the future, the company will realize the rapid growth of pig production capacity with the asset light mode of leasing standardized, new process sow farms and professional fattening farms. We expect the company to sell 1.5 million pigs and 3 million pigs in 2022 and 2023.
The problem of horizontal competition is expected to be solved this year
The company and the actual controller, Hunan Tianxin Seed Industry Co., Ltd., a subsidiary of Hunan Modern Agricultural Industry Holding Group Co., Ltd., have the problem of horizontal competition. Hyundai agricultural group publicly promised to solve the problem of horizontal competition within five years. This year is the last year of the commitment period. It is conservatively estimated that the number of basic sows in Tianxin seed industry is more than 40000, and the annual number of pigs is more than 200000, mainly breeding pigs. Once Tianxin seed industry is injected into listed companies this year, the company's listing volume is expected to increase significantly in 2023.
Investment advice and profit forecast
We estimate that the operating revenue of the company from 2021 to 2023 will be 2.193 billion yuan, 4.259 billion yuan and 8.455 billion yuan respectively, the corresponding net profit attributable to the parent company will be -216 million yuan, - 439 million yuan and 995 million yuan respectively, the EPS will be -0.27 yuan, - 0.55 yuan and 1.24 yuan respectively, and the corresponding P / E will be - 32x, - 16x and 7x respectively. Referring to the historical P / B, we give the company 6 times P / b valuation in 2022, and the corresponding target price is 16.5 yuan / share. "Buy" rating is given for the first time.
Risk tips
Epidemic risk, rising breeding cost risk, food safety risk, abnormal fluctuation risk of pig price
