\u3000\u3 Shengda Resources Co.Ltd(000603) 477 Leshan Giantstar Farming&Husbandry Corporation Limited(603477) )
Vigorously develop the breeding business, and the revenue and net profit increased significantly. In July 2020, the company completed the acquisition of 100% equity of Leshan Giantstar Farming&Husbandry Corporation Limited(603477) Co., Ltd. (the consolidated statement of 2020 only included the performance from July to December). With the expansion of the company’s breeding scale, the number of pigs sold increased significantly, and the company’s performance increased significantly compared with the same period in 2020. The annual operating revenue was 2.994 billion yuan, a year-on-year increase of 108.03%; The net profit attributable to shareholders of listed companies was 269 million yuan, a year-on-year increase of 111.06%.
The integrated industrial chain layout has greatly increased the number of pigs. The integrated industrial chain layout has greatly increased the number of pigs. The company has a relatively complete integrated industrial chain of feed processing and livestock and poultry breeding, integrating feed production and sales, livestock and poultry breeding, propagation and breeding, and the business synergy has been effectively brought into play. The company introduces breeding pigs from pic, selects paternal breeding pigs with fast production speed, high feed conversion rate, good meat quality traits and strong adaptability and maternal breeding pigs with good reproductive performance, and makes full use of the principle of hybrid advantage and character complementarity to make their offspring comprehensively show excellent traits (high carcass lean meat rate, thin back fat, fresh and tender meat quality and uniform intermuscular fat). Through in-depth cooperation with Pipestone, the company introduced a full set of breeding concept and production technology system from the aspects of pig farm site selection, design, construction, facility and equipment configuration, pig farm production and operation process, followed the breeding concept of modernization, large-scale and industrialization, and greatly improved the company’s production performance, production efficiency and biological safety.
Profit forecast and investment rating: the turning point of the pig industry is approaching, the industry capacity will be cleared faster, the pig price will hit the bottom and rise, and the sector valuation is in the bottom range. The layout of the company’s integrated industrial chain is conducive to cost reduction and efficiency increase. The marketing of live pigs is expected to be greatly improved, and the performance flexibility is obvious. It is estimated that the company’s revenue from 2021 to 2023 will be RMB 2.994/45.1/8.043 billion respectively, the net profit attributable to the parent company will be RMB 264/0.97/1.168 billion respectively, and the corresponding PE will be 40.25/109.87/9.1 times respectively. “Overweight” rating is given for the first time.
Risk warning: the company’s performance is lower than the expected risk; Feed raw materials rose sharply and remained high; Non plague risk; Risk of long-term downturn in pig prices; Risks of less than expected sales, etc.
