\u3000\u30 China High-Speed Railway Technology Co.Ltd(000008) 95 Henan Shuanghui Investment & Development Co.Ltd(000895) )
Event:
Henan Shuanghui Investment & Development Co.Ltd(000895) released the 2021 annual report: in 2021, the company achieved an operating revenue of 66.682 billion yuan, a year-on-year decrease of 9.7%, and a net profit of 4.866 billion yuan, a year-on-year decrease of 22.2%; The net profit margin was 7.3%, down 1.17 percentage points year-on-year. EPS1. Four yuan. It is proposed to distribute a cash dividend of 12.98 yuan (including tax) for every 10 shares.
Key investment points:
The performance inflection point of the fourth quarter was fulfilled as scheduled: the company achieved an operating revenue of 15.724 billion yuan in a single quarter in the fourth quarter, a year-on-year decrease of 13.3%, and a net profit of 1.413 billion yuan, a year-on-year increase of 7.3%. The meat products and slaughtering departments of the company achieved operating profits of 5.807 billion yuan and 93 million yuan respectively, with a year-on-year increase of 0.91% and a decrease of 94.14%, of which the operating profits of 1.512 billion yuan and 430 million yuan respectively in the fourth quarter, with a year-on-year increase of 24.97% and 13.02% respectively. In the fourth quarter, the price of live pigs decreased by 50.43% year-on-year to 15.48 yuan / kg, and the price of pork decreased by 50% year-on-year to 23.22 yuan / kg. The cost of the meat products Department of the company decreased significantly. At the same time, the frozen products inventory was no longer subject to significant impairment, but turned back to 317 million yuan. Both departments had correct performance.
The profit per ton of meat products remained high and continued to accelerate product diversification: the company’s sales volume of meat products in 2021 was 1.558 million tons, a year-on-year decrease of 1.85%, including 370000 tons in the fourth quarter, a year-on-year decrease of 0.17%. Since the second half of last year, benefiting from the downward trend of pig price, the profit per ton of meat products of the company has continued to reach a new high, of which the profit per ton exceeded 4000 yuan / ton in the fourth quarter and reached 3733 yuan / ton in the whole year. The leading new products of packaged meat products performed well, with more than 20000 tons of spicy food, more than 10000 tons of starch free king Zhongwang and fire whirlwind. The new track products such as meatballs, crispy meat products and Chinese cooked food achieved rapid growth. The newly developed Chinese cuisine products such as self heated rice, Shuanghui eight bowls and family banquet gift boxes also received high praise and have great growth potential. In 2021, 30000 tons of catering ingredients were sold, which doubled year-on-year, and the e-commerce revenue was 780 million, with a year-on-year increase of 1.4 times. The volume can be expected in the later period. There are also breakthroughs in brand marketing, such as sponsoring variety shows, and joint marketing with the glory of kings, B tiktok and jitter, which will help to promote brand younger. In the future, the company’s meat products will continue to promote product diversification, broaden consumption scenarios, and change the product structure to the combination of meat, eggs, milk, vegetables and grains, and to a bowl of rice, a meal and a table of dishes.
The performance of the slaughtering department is reversed, and the profit will rise significantly in 2022: due to the unexpected decline of pig price in the second half of 2021, the company’s frozen meat inventory cost is high, the company has accrued an impairment loss of 1.3 billion yuan throughout the year, and the operating profit of the slaughtering Department has fallen to a new low in recent years. As of December 31, the company’s frozen meat inventory has fallen to a low level, and it is expected that the first quarter will not be affected by the continued decline of pig prices. It is expected that the profit of the company’s Chinese slaughtering department will return to normal this year, and the profit of imported frozen meat will increase with the expansion of the price difference between China and the United States, contributing to the performance flexibility.
Profit forecast and investment rating: the inflection point of the company’s performance in the fourth quarter of 2021 will be fulfilled, and the slaughtering department will contribute performance flexibility in 2022. It is estimated that the company’s EPS from 2021 to 2023 will be 1.69/1.83/1.98 yuan respectively, and the corresponding PE will be 16 / 15 / 13 times respectively. It will be rated as “overweight” for the first time.
Risk warning: covid-19 epidemic lasted longer than expected; The promotion of new products did not meet expectations; Internal marketing reform is less than expected; Pork price fluctuations exceeded expectations; Food safety risks.
