\u3000\u3 China Vanke Co.Ltd(000002) 385 Beijing Dabeinong Technology Group Co.Ltd(002385) )
Key investment points
Modern agricultural high-tech enterprises, feed, breeding and seed industry have developed in an all-round way
The company started with the feed business, and has arranged the pig breeding and genetically modified seed business in recent years to create a profit growth curve at present and in the future. The company is born with innovative genes. Shao genhuo, the founder of the company and doctor of Agronomy, attaches great importance to scientific and technological research and development. In the process of early development and growth, the company has been constantly trying Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) , helping to develop feed and seeds with animal and plant protection.
Industry: feed and pig cycle dance together, and the seed industry welcomes new opportunities of transgenic
(1) the overall growth of the feed industry is stable, entering the stock competition stage of big fish eating small fish, with prominent structural opportunities, including pig feed highly related to the pig breeding cycle and special aquatic feed with booming demand caused by the upgrading of aquatic product consumption. (2) The production capacity of the pig industry continues to be reduced. In 2022, the pig supply shows a trend growth, coupled with the sluggish consumer demand, we think the pig price may start a second bottom. (3) After the shock correction from 2016 to 2020, the seed industry ushered in a new upward cycle, in which high price + low inventory + strong demand is expected to improve the prosperity of corn seeds, and the certainty of the commercialization of genetically modified crops in China is enhanced.
Company: business and industry are coordinated and complementary, with sufficient growth momentum in the future
Taking the feed business as cash cow, the company positions the pig breeding and seed business as a star business, with a high degree of synergy and complementarity among industries. (1) In terms of feed, the long-term goal of the company is to double the market share. We believe that after the acquisition of Jiuding, the company can comprehensively strengthen the feed scale, regional layout and product advantages, and the feasibility of achieving the strategic goal is high. It is expected that the sales volume is expected to increase to 8 million and 10 million tons in 2022 and 2023. (2) In terms of pigs, the company’s sow stock reaches 400000, which can contribute to the production capacity of 8 million commercial pigs according to psy20. We believe that the current round of pig price may reach the bottom in the second quarter of 2022, and the company’s pig slaughter volume may be released in 2023; On the cost side, the fixed cost will be diluted after the new plant is put into operation. At present, the cost in some parts of central and southern China has reached 14 yuan / kg, and the breeding cost is expected to be further reduced. Moreover, the feed formula of the company is characterized by high amino acid and low protein, which can avoid the adverse impact of soybean meal price rise. (3) In terms of seeds, the company’s reserves of genetically modified traits rank first in the whole industry. We believe that after the commercialization of genetically modified products, the genetically modified products represented by double resistance corn seeds will bring profit increment to the whole industry, and the threshold of genetically modified breeding is high. The approval of variety traits is equivalent to a first mover advantage of about 10 years. As a leader of China’s genetically modified products, the company is expected to be the leader after the opening of the national genetically modified policy, Rapidly increase the market share and become a seed industry giant with new technology.
Profit forecast and valuation
We believe that the company’s feed business is growing steadily, the pig breeding business contributes to the profit increment with the recovery of pig price, and the seed business benefits from the commercialization of GM and ushers in great opportunities. It is estimated that the revenue from 2021 to 2023 will be 28.929 billion yuan, 42.017 billion yuan and 66.030 billion yuan respectively; The net profit attributable to the parent company was -428 million yuan, 2.437 billion yuan and 3.756 billion yuan respectively; The corresponding PE is – 75, 13 and 9 times respectively. Compared with comparable companies, Beijing Dabeinong Technology Group Co.Ltd(002385) business is mature and complementary + growth is underestimated. The company has clear strategic objectives and huge market value space. We give the company a PE of 20 times the profit in 2022, corresponding to the target share price of 11.60 yuan, and give a “buy” rating for the first time.
Risk tips
The demand for feed was less than expected, the slaughter of pigs and the recovery of pig prices were less than expected, and the commercialization process of GM was less than expected.
