Tangrenshen Group Co.Ltd(002567) (002567)
Report summary:
Company profile: an old brand feeding enterprise deeply engaged in the main business and a steadily growing breeding star
Since its establishment 32 years ago, the company has been committed to developing the integrated management system of pig industry chain, forming five industrial development patterns of "variety improvement, safe feed, healthy breeding, meat processing and brand monopoly". The company's aquaculture business continued to develop, and its operating performance improved significantly. In 2020, its revenue increased by 20.67% year-on-year compared with 2019, and its net profit increased by 271% year-on-year.
Company analysis: new forces of pig breeding against the cycle
1) Improve feed distribution and deep ploughing without resistance technology. In a short time after its establishment, the company created the "Camel" brand feed widely recognized by the industry. In the later stage, it horizontally integrated and acquired Shandong Hemei group and Shenzhen Billy meiyingwei, and completed the product layout covering pig feed, poultry feed and aquatic feed. The company's feed R & D achievements are innovative. Non anti biological feed and suckling pig yoghurt oral milk are the company's two fist products, which have excellent effects on enhancing pig immunity, maintaining intestinal health, promoting digestion and improving survival rate. 2) Attach great importance to core breeding and build a moat of pig production capacity. The company and the world's top breeding company Walter Hill Qiangqiang jointly successfully developed and bred the new American breeding pig "Meishen". In 2020, the company also introduced new Danish breeding pigs with a high breeding rate of Psy of more than 28 to further strengthen the core breeding strength. With the phasing out of inefficient sows and the continuous breeding and cultivation of Dan line breeding pigs, the company will be able to complete a large proportion of breeding pig population renewal by the end of 2022, and the overall production efficiency of the population will be significantly improved at that time. 3) Longhua mode accelerates the expansion of production capacity and intelligent breeding of buildings to reduce costs and increase efficiency. In order to expand the scale of pig breeding business, the company acquired Longhua agriculture and animal husbandry, a well-known leading breeding enterprise in Hunan. Longhua agriculture and animal husbandry plans to complete the construction of 1.3 million self breeding and autotrophic production capacity by the first quarter of 2022, which will fully enhance the performance flexibility of the company. In terms of the promotion of building intelligent pig raising mode, Longhua agriculture and animal husbandry, which has been put into operation first, has solved technical problems such as ventilation, epidemic prevention and environmental protection. Many production indicators of its projects have excellent performance, and the full cost of marketing is expected to reach the industry-leading level. In the future, the company will improve the construction and proportion of self breeding pig farms. At that time, the complete cost and breeding efficiency will be further improved. 4) Based on slaughtering, build a meat brand and improve the added value of pig products. Among many enterprises in the pig industry, the company is a rare enterprise with strong brand effect in feed and meat products at the same time. The company has established offline sales modes such as business chains and supermarkets in Hunan. At the same time, it has actively embraced new retail and actively carried out new marketing modes such as webcast and goods delivery, resulting in a significant increase in meat sales. 5) Skillfully use financing tools to expand steadily, and strive to sell tens of millions of pigs in ten years. In 2021, the pig price entered a downward cycle. In order to continue to expand production capacity steadily, the company's asset liability ratio increased compared with 2020. However, as of Q3 of 2021, the company's assets and liabilities are in good condition. The bonds are mainly medium and long-term loans, the short-term repayment pressure is small, and the financial risk is still in a safe and controllable range. The company currently holds nearly 2.896 billion yuan of monetary capital, an increase of nearly 174% over the beginning of the year.
Investment advice
It is estimated that the company will achieve a revenue of RMB 20.244/23.284/27.529 billion and a net profit attributable to the parent company of RMB 258/5.31/1.3 billion from 2021 to 2023. The current market value corresponds to 34 / 16 / 7 times of PE from 2021 to 2023, and the corresponding EPS is 0.22/0.44/1.08 yuan. The company's pe16 times in 2022, which is significantly 40 times lower than the average value of comparable companies. The future valuation is expected to have great room for improvement, and the "recommended" rating is given for the first time.
Risk statement
The risk of spread of classical swine fever, the risk of price fluctuation of raw materials caused by weather disasters, and the risk that the rebound of pig price caused by policy regulation is less than expected.
