\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 975 Hunan New Wellful Co.Ltd(600975) )
Cycle reversal: the cumulative de production of fertile sows is 6%, and the de production capacity in 22 years is expected to accelerate.
At present, the price of live pigs has entered the first-class early warning range. Since June 2021, the number of sows has been reduced by 6%, and the number of sows has decreased by 2.74 million. Generally, pork consumption is low from February to may, and the first half of this year is still the peak of pig marketing. It is expected that 22h1 pig price will still be in the downward channel. Considering the game between slaughtering end and breeding end at the trough of pig price, the bottom of pig price may be delayed. It is expected that the low point of pig price is expected to appear in 2022q2-q32023, and the pig price may reverse.
Sales growth: accelerate production expansion at the bottom of the cycle, and asset injection may significantly increase sales.
The company continues to expand production capacity at the bottom of the cycle. In 2021, the company is expected to deliver more than 40 fattening farms. By the end of 2021, the annual production capacity of the company may exceed 1 million pigs. The turning point of the company’s sales volume is upward. In 2021, the sales volume is about 450000, with a year-on-year increase of 34.19%. In addition, Tianxin seed industry is a breeding company subordinate to the indirect controlling shareholder of the company, and its main products are original breeding pigs and binary sows. The problem of horizontal competition of the company is expected to be solved in 2022. If Tianxin can be injected smoothly, the company’s sales volume is expected to increase significantly in 2022.
Abundant funds: Pig listed companies under Hunan SASAC will increase their working capital.
The company is a listed pig breeding company subordinate to Hunan SASAC. It has formed a whole pig industry chain layout based on pig breeding, pig breeding, slaughtering and processing, cold chain logistics and pig trading. In 2021, the company will raise 1.03 billion yuan as a fixed increase, and the subscribers are controlled by Hunan SASAC. The funds raised in 2021q4 have arrived. At present, the company has sufficient funds.
Earnings forecast, valuation and rating
It is estimated that the operating revenue from 2021 to 2023 will be RMB 2.249/42.34/8.583 billion respectively, with a year-on-year increase of – 17.44% / 88.27% / 102.75% respectively. The net profit attributable to the parent company was -221 / – 473 / 973 million yuan respectively, with a year-on-year increase of -178.23% / – 113.66% / 305.90%, EPS was -0.27 / – 0.59/1.21 yuan / share, BPS was 2.78/2.19/3.23 yuan / share, CAGR was 8% in two years, and the corresponding Pb was 3.22x/4.08x/2.77x respectively. Referring to the average valuation level of comparable companies and the historical valuation center of the company, and considering the abundant capital of the company, the company is accelerating the layout of pig breeding business, giving the company 5xpb in 2022 with a target price of 10.95 yuan, and a “buy” rating for the first time.
Risk tips
Raw material price fluctuation risk; Pig price fluctuation risk; Pig epidemic risk
