\u3000\u3 Shengda Resources Co.Ltd(000603) 477 Leshan Giantstar Farming&Husbandry Corporation Limited(603477) )
The company has the advantages of breeding cost and capital, practices the counter cyclical expansion strategy and maintains the “buy” rating
Leshan Giantstar Farming&Husbandry Corporation Limited(603477) public issuance of convertible corporate bonds was approved by the CSRC on March 21. The issuance of convertible bonds will help the company’s “Dechang integration project” to be successfully delivered and put into operation within the year. At the bottom of the cycle, the company orderly promoted project construction and capacity expansion. The company estimates that the marketing targets of pigs from 2022 to 2023 are 1.5/3 million pigs respectively. Based on this, the forecast for 2022 is raised, the forecast for 2023 is lowered, and the forecast for 2024 is added. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 316 / 1775 / 2373 million yuan (the forecast value before 20222023 is -215 / 2270 million yuan), the corresponding EPS will be 0.62/3.51/4.69 yuan respectively, and the corresponding PE of the current stock price is 35.6/6.3/4.7 times. The company has the advantages of breeding cost and capital, and maintains the “buy” rating.
In 2021, the company’s pig sales increased significantly, and the performance and fattening cost of breeding pigs had obvious advantages
In 2021, the company achieved a revenue of 1.792 billion yuan for pig products, accounting for 60.27% of the total revenue. 871000 pigs were sold, with a year-on-year increase of 308.87%. In terms of sales structure, the company sells about 62 / 15 / 100000 fattening pigs, piglets and breeding pigs respectively, and about 40000 eliminated sows. The sales of Siyin healthy breeding pigs of 2021h1 company (blue ear, pseudorabies Ge, PED and non plague antigen antibody detection are all negative) are smooth, and the sales of breeding pigs contribute the main part of the annual profit. In 2021h2, affected by the downward price of pigs in the industry, the company sold piglets to self fattening, which benefited from the advantages of breeding pigs, and the cost of weaning piglets was low; At the same time, it has the production performance of high feed conversion rate and meat quality. It is estimated that the complete cost of fattening pigs in 2021 is about 16.9 yuan / kg. We expect that the company’s total cost of pigs from 2022 to 2024 is expected to drop to 16.0 / 15.2 / 14.5 yuan / kg respectively.
The cash pressure at the bottom of the company’s cycle is small, and the completion degree of “counter cycle scale management” is high
The company’s pig breeding business adopts the development strategy of “reverse cycle scale management”. By the end of 2021, the company can breed about 130000 sows (100000 basal sows), supporting the company’s goal of 1.5/3 million pigs from 2022 to 2023. By the end of 2021, the total assets of the company were 6.016 billion yuan (+ 40.05%), and the asset liability ratio of the company was 44.68%. It is estimated that the capital expenditure of the company in 2022 will be 2-2.5 billion yuan, which will be mainly used for the engineering construction of pig breeding projects such as Dechang. On the whole, the current capital pressure of the company is small, and the subsequent financing space is relatively large, so as to better support the company’s capacity and realize counter cyclical expansion.
Risk tips: the occurrence of animal diseases is uncertain, covid-19 epidemic suppresses consumption and the company’s sales rhythm, etc.
