\u3000\u300 Shenzhen Guohua Network Security Technology Co.Ltd(000004) 8 Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) )
Event overview
The company issued the annual report of 2021. During the reporting period, the company achieved an operating revenue of 3.221 billion yuan, yoy-20.88%; The net profit attributable to the parent company was 389 million yuan, yoy-55.07%; The company has withdrawn 49.13 million yuan of impairment reserves for consumptive biological assets. Meanwhile, the company plans to distribute cash dividends of 13 yuan (including tax) to all shareholders for every 10 shares, with a total dividend of Skshu Paint Co.Ltd(603737) 59650 yuan (including tax).
Analysis and judgment:
Business transformation is under short-term pressure, focusing on breeding, and the future can be expected
During the reporting period, the company achieved an operating revenue of 3.221 billion yuan, yoy-20.88%. The main reasons for the decline in performance compared with the same period of the previous year are the decrease in the sales revenue carried forward from real estate projects compared with the same period of the previous year, the serious decline in pig prices, and the fact that the company’s Shanhai Yuyuan project has not met the conditions for revenue recognition and is not included in the sales revenue. Specifically, in terms of real estate development, during the reporting period, the company’s real estate development achieved an operating revenue of 2.216 billion yuan, yoy-31.20%, mainly due to the company’s business transformation, the de capitalization of the stock of real estate business and the superposition of some real estate projects, the carry over sales revenue of real estate projects did not meet the inclusion conditions, and the revenue decreased compared with the same period; In terms of feed business, during the reporting period, the company’s feed business achieved an operating revenue of 745 million yuan, yoy + 7.98%; In terms of breeding business, during the reporting period, the company’s breeding business achieved an operating revenue of 241 million yuan, yoy + 228.81%, mainly due to the promotion of introduction and production of the company’s pig breeding project, and the gradual release of production capacity; Other businesses realized an operating income of 187753 million yuan, yoy-78.29%.
Pig production capacity continued to expand, and the strategic transformation was steady and firm
During the reporting period, the company sold 132200 pigs (including 47900 piglets), and the operating income of pig products was 181 million yuan, an increase of 230067% year-on-year. By the end of the reporting period, the company had a total stock of 89500 sows, including 66800 basic sows and 22700 reserve sows. In 2022, the company decided to increase investment in pig breeding industrial chain projects, including the increase of investment in Xuwen phase I project with 200 boar stations, 1500 ancestral breeding pigs, 12000 parental breeding pigs, 144000 fattening pigs, Xuwen phase I fattening expansion project, and the construction of feed plants in four places with a capacity of 1.08 million tons. We believe that with the full production of the invested projects and the promotion of subsequent projects, the company’s production capacity will expand steadily, and is expected to achieve the goal of more than 1 million pigs in 2022 and more than 2 million pigs in 2023; Combined with the building settlement three-dimensional breeding mode and the breeding mode integrating feed production, breeding, breeding and breeding, the scale effect is prominent, the pig breeding cost is further optimized, the cost is reduced and the volume is increased, and the profit of the company’s pig breeding business is thickened.
The real estate business continued to be deregulated, and the proportion of revenue further decreased
Affected by covid-19 pneumonia, Shenzhen property market multiple regulation policies and the company’s strategic transformation, the company’s real estate business revenue declined. During the reporting period, the company achieved an operating revenue of 2.216 billion yuan, a year-on-year decrease of 31.20%; Affected by the company’s strategic transformation, the proportion of real estate business revenue decreased by 10.33pct to 68.80%. During the reporting period, the company continued to develop and operate around the stock land, and the sales of real estate projects were good. Among them, the Shanhai imperial garden project was successfully opened. As of the end of the reporting period, 1058 sets had been signed, with a signed area of 10802979. In 2022, the company will continue to focus on Shanhai Shangyuan phase III (i.e. Shanhai residence) and phase IV (i.e. Shanhai imperial garden). The Shanhai residence project is expected to be opened in the first half of 2022. We believe that although the company’s main business income source is the real estate business, with the continuous promotion of the company’s strategic transformation and the de stocking of real estate projects, the proportion of real estate business revenue will further decline, boosting the implementation of the company’s transformation and modern agricultural strategy.
Investment advice
Considering the gradual release of the company’s pig production capacity and the gradual deregulation of the real estate business, we update the company’s operating revenue of 15.508/14.37 billion yuan (the previous value is 15.764/14.666 billion yuan respectively) and the net profit attributable to the parent company of 4.015/1.880 billion yuan (the previous value is 3.985/2.339 billion yuan respectively) from 2022 to 2023. It is estimated that the operating revenue of the company will be 15.069 billion yuan and the net profit attributable to the parent company of 3.022 billion yuan in 2024. To sum up, we expect that from 2022 to 2024, the company’s EPS will be 7.67/3.59/5.77 yuan respectively, corresponding to the closing price of 19.82 yuan / share on March 16, 2022, and PE will be 3 / 6 / 3x respectively, maintaining the “buy” rating.
Risk tips
The market price of pigs fell sharply, the release process of pig production capacity was less than expected, the price of feed raw materials rose more than expected, and the progress of real estate projects did not meet expectations.
