\u3000\u3 China Vanke Co.Ltd(000002) 982 Hunan Xiangjia Animal Husbandry Company Limited(002982) )
Matters:
The company announced that in February 2022, 2149800 live birds were sold, with a sales revenue of 503748 million yuan and an average sales price of 12.23 yuan / kg. The month on month changes were – 44.39%, – 39.43% and 7.78% respectively, and the year-on-year changes were – 11.12%, – 9.05% and 0.16% respectively.
Guoxin agricultural view: 1) the average selling price of live poultry of the company in February increased by 7.78% month on month, and the upward trend is not reduced. We believe that the profit of yellow chicken breeding is expected to recover significantly from 2022, Hunan Xiangjia Animal Husbandry Company Limited(002982) as a high-quality target in the industry, the performance is expected to accelerate the recovery. 2) Hunan Xiangjia Animal Husbandry Company Limited(002982) is a scarce growth target in the field of large agriculture, which is mainly reflected in the following aspects: first, Hunan Xiangjia Animal Husbandry Company Limited(002982) although it made its fortune in poultry breeding, its sales of chilled yellow feather chicken products have increased steadily in recent years. Chilled yellow feather chicken has the attribute of consumer goods, and its profitability is less affected by the poultry cycle, and it is expected to further improve its profitability through brand premium in the future; 2、 The frozen yellow feather chicken industry has benefited from the rapid growth period of the listing policy of frozen yellow feather chicken everywhere. As the regional leader of frozen yellow feather chicken, the company is the best beneficiary of the expansion of the industry and is expected to usher in a golden period of performance development. 3) Risk warning: sudden large-scale uncontrollable epidemic disease; The commissioning progress of the raised investment project is less than expected. 4) Investment suggestion: Hunan Xiangjia Animal Husbandry Company Limited(002982) is a growth stock in the agriculture and animal husbandry industry. The main reason is that in the short term, as the leader of the frozen yellow chicken industry, the company will fully benefit from the expansion of the frozen chicken industry by virtue of its advantages in channel, logistics and whole industry operation. In addition, the production capacity of the raised investment project will be greatly expanded after it is put into operation, and the performance growth of frozen poultry products is highly deterministic; For a long time, the management of the company has significant advantages. With the vision of becoming a high-end animal protein consumer supplier in China, the company attaches importance to food safety and quality, and brings further growth reserves through the layout of new businesses such as poultry eggs and pork food, with full growth in the future. It is estimated that the net profit attributable to the parent company in 21-23 years is RMB 0.24/1.53/243 million, the corresponding EPS is RMB 0.24/1.50/2.39, and the corresponding current share price PE is 168.6/26.5/16.7x, maintaining the “buy” rating.
Comments:
In February 2022, the average price of live chicken sales of the company is booming. It is expected that the performance in 2022 will benefit from the recovery of yellow chicken market, which is expected to recover significantly
In February 2022, the company sold 2.498 million live birds, with a sales revenue of 503748 million yuan and an average sales price of 12.23 yuan / kg. The month on month changes were – 44.39%, – 39.43% and 7.78% respectively, and the year-on-year changes were – 11.12%, – 9.05% and 0.16% respectively. From the perspective of average sales price, the average sales price of yellow feather live birds in February increased significantly month on month. In terms of sales volume, due to the reduction of the company’s seedling investment in the early stage and the impact of the Spring Festival holiday, the company’s live poultry sales decreased month on month, which belongs to seasonal normal fluctuation. The company’s live poultry breeding capacity is still in the process of steady expansion. Its breeding capacity will reach about 75 million feathers in 2021. In the future, the company will continue to increase the construction of self breeding capacity, and the breeding capacity is expected to reach about 90 million feathers in 2022. At the same time, the company actively explored new markets and channels such as community group purchase, further improved the market share of the company’s chilled products and highlighted its growth.
In addition, the development of the company’s ice fresh business is stable and positive. Although the supermarket channel was affected by community group purchase in the first half of 2021, and the sales proportion of traditional supermarkets once fell to less than 50%, since the second half of 2021, with the further standardization of community group purchase, the impact on traditional supermarkets is fading. According to the data from January to November, The proportion of traditional supermarket sales has risen to more than 55%, and the channel structure has been steadily optimized. It is expected that in the future, with the further promotion of the state’s listing policy for chilled meat, the change of consumers’ consumption habits, the improvement of chilled meat consumption awareness and consumption level, and the strengthening of the state’s supervision on food safety, the company’s chilled meat business will usher in a period of rapid development, and is optimistic about the future development of the company for a long time.
We are optimistic about the industry recovery brought by the deregulation of yellow chicken production capacity, and pay attention to the high-quality enterprise growth opportunities brought by the development of ice freshening
At the breeding end, the stock of parents of yellow feather broilers is accelerated. According to the monitoring data of the poultry branch, the stock of yellow feather broiler grandparents and parents has increased significantly since 2019. The scale of breeding chickens reached an all-time high in the first half of 2020, with serious surplus. Then the industry began to reduce production capacity. At present, the production capacity of parents is at a historically low level, and the trend of reduction is still accelerating. As of November 21, 2021, China’s ancestral chicken stock (in production + reserve) was 2.53 million units, a year-on-year decrease of 1.82%; The stock of parents’ generation (in production + reserve) was 22.71 million, a year-on-year decrease of 9.35%. The stock of parents’ generation in production decreased by 7.11% compared with the same period in 2019, the lowest level in three years. We believe that after more than a year of low prices in the yellow feather broiler market, the stock of parental breeding chickens is at a new low level in three years, and the trend of capacity elimination is still continuing. It is expected that the breeding profit is expected to start to improve from 2022.
Ice fresh end, ice fresh yellow feather chicken industry is a typical industry of “large industry + low penetration + low leading market share”, which is easy to produce enterprises with large market value. First of all, we believe that the profit center of the poultry chain is on the food consumption side. The logic is as follows: 1) the scale of poultry breeding is high, and the feed conversion rate is high, so it is difficult for breeding to have excess returns and grow stocks; 2) Poultry food consumption is still in a brand gap. Relying on low-cost raw materials, food consumption has great prospects in the future. Secondly, yellow feather chicken is consumed in chilled products. The logic is as follows: 1) the proportion of chilled chicken consumed in China is low, and there is more than five times the growth space for a long time; 2) In the future, driven by the policy promotion of restricting live poultry trading and consumption upgrading, the rising power of China’s chilled yellow chicken market will be more sufficient, and the industry will usher in a golden period of development; 3) Chilled chicken has the attribute of consumer goods, the price is weakly cyclical, and the gross profit margin is significantly higher than that of live poultry. With the accumulation of brand advantages, the brand premium is also expected to bring considerable benefits to the company.
Channel + logistics + whole industry chain operation, and continuously expand the company’s core moat
We believe that Hunan Xiangjia Animal Husbandry Company Limited(002982) has a deep moat in the frozen yellow chicken industry, which is insurmountable in the short term. First of all, the company has formed an obvious leading advantage in the business supermarket channel by giving priority to occupying downstream customer resources, forming a mature marketing system and mastering consumer preferences. In the future, the company will continue to achieve high performance growth through single store growth + store expansion. Secondly, the company has built a 24-hour cold chain distribution circle in more than 20 provinces and cities. Chilled products have developed to 28 provincial capitals, and some provinces and cities have sunk to municipal and county-level cities. The overall sales volume will maintain a year-on-year growth of more than 30% in 2021. In the future, it will continue to expand its scale through channel sinking and sales radius expansion, and is expected to become a national leader in chilled chicken. Finally, the company is a rare enterprise in the industry with complete “from farm to table” integrated operation, and realizes the whole process traceability of chilled products through “commodity QR code”, which can effectively ensure food safety and greatly boost consumer confidence.
Investment suggestion: continue to recommend
Hunan Xiangjia Animal Husbandry Company Limited(002982) is a growth stock in the agriculture and animal husbandry industry. In the short term, the yellow chicken breeding industry as a whole will recover significantly in 2022. As the leader of the frozen yellow chicken industry, the company will fully benefit from the expansion of the frozen chicken industry by virtue of its advantages in channel, logistics and whole industry operation. In addition, the production capacity of raised investment projects will expand significantly after investment, so the performance growth of frozen poultry products is highly deterministic; For a long time, the management of the company has significant advantages. With the vision of becoming a high-end animal protein consumer supplier in China, the company attaches importance to food safety and quality, and brings further growth reserves through the layout of new businesses such as poultry eggs and pork food, with full growth in the future. It is estimated that the net profit attributable to the parent company in 21-23 years is RMB 0.24/1.53/243 million, the corresponding EPS is RMB 0.24/1.50/2.39, and the corresponding current share price PE is 168.6/26.5/16.7x, maintaining the “buy” rating.
Risk tips
Outbreak of large-scale uncontrollable avian diseases; The production progress of the company’s raised investment projects is less than expected.
