\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 598 Heilongjiang Agriculture Company Limited(600598) )
Key investment points
Performance summary: in 2021, the company achieved an operating revenue of 3.63 billion yuan, a year-on-year increase of 12%, and the net profit attributable to the parent company was 860 million yuan, a year-on-year decrease of 13.4%. After deduction, the net profit attributable to the parent company was 1 billion yuan, a year-on-year decrease of 4.7%
Comments: the company's operating income increased mainly due to the following reasons: 1) the growth of contracting income. During the reporting period, the company achieved land contracting income of 2.79 billion yuan through measures such as changing drought to water, step charging and large-scale field bidding, with a year-on-year increase of 110 million yuan and 4%; 2) The revenue of agricultural input products (fertilizers) increased by 91.77 million yuan, and aviation and chemical services increased by 110 million yuan. The year-on-year decrease in net profit attributable to the parent company was mainly due to the arbitration dispute between the holding subsidiary Xindu and Tianshun company over the cooperative development of Tianshun new town project, and Xindu company confirmed 300 million yuan of liquidated damages. During the reporting period, the company continued to optimize the agricultural planting structure, strengthen the protection of black land and improve the level of agricultural modernization. 16 agricultural branches achieved an operating revenue of 3.56 billion yuan, a year-on-year increase of 10.4%, and a total profit of 1.14 billion yuan, a year-on-year increase of 17.4%. The ability to ensure food security has been continuously strengthened. Throughout the year, 10.429 million mu of seeds were sown, and the total output of grain and beans was 5.989 million tons, an increase of 5.4% year-on-year. 2.93 million mu of high-quality rice and 770000 mu of high protein soybeans were planted. In the whole year, 985000 mu of grid land was transformed, 5728 sets of renewal machinery were purchased, and the comprehensive mechanization in the region reached 99%.
The standardization of seed industry has been continuously strengthened and the development environment has been gradually optimized; Transgenic related work has been gradually promoted and has a broad market. No. 1 central document issued by the CPC Central Committee and the State Council clearly raised the importance of food security and seed safety. Similarly, it was also mentioned in the three clear tasks for seed issues in the central economic work conference to carry out seed source "neck" technology research, and determined to fight a turnaround. In July 2021, the meeting of the central deep reform commission deliberated and adopted the action plan for the revitalization of the seed industry, emphasizing the importance of food security. In order to implement the relevant requirements, the office of the National Crop Variety approval Commission organized to modify the national corn and rice variety approval standards, adding consistency and authenticity requirements in the basic conditions for both corn and rice. In the process of standardized development, excellent seed enterprises and land companies with R & D strength will have a better growth environment. In January 22, the Ministry of agriculture and rural areas decided to revise some provisions of the four regulations, including the administrative measures for the safety evaluation of agricultural genetically modified organisms, the administrative measures for the approval of major crop varieties, the administrative measures for the production and operation license of crop seeds and the provisions on the naming of agricultural plant varieties, so as to further standardize the management of genetically modified organisms. Genetically modified organisms have growth space and development prospects in China. If they are industrialized in the future, The seed industry will usher in structural adjustment, and the dividends generated will be shared by farmers, seed industry and land enterprises. As a high-quality grain production base, the company has the advantages of scale, resources, resources, management and green products, and will benefit from it.
Affected by international relations, climate and other factors, the global food price is high, the state attaches great importance to food security, farmers have high planting enthusiasm, and the land value increases accordingly. The Ministry of agriculture and rural areas and the Ministry of finance made clear the policy support for the key work of grain production in 2022, which mentioned the stable implementation of cultivated land fertility protection subsidies and the issuance of one-time subsidies to actual grain farmers to alleviate the impact of increased expenditure caused by the rise of agricultural materials prices. In terms of rice, with the approval of the State Council, the minimum purchase prices of early indica rice (third-class), medium and late indica rice and japonica rice produced in 2022 are 124 yuan, 129 yuan and 131 yuan per 50kg respectively, up 2 yuan, 1 yuan and 1 yuan respectively, which will be further increased on the basis of 2021. Due to the impact of geographical conflict, the area of spring sowing in Ukraine has decreased, mainly including corn, barley and other crops. According to the latest news released by the Minister of agriculture of Ukraine, its grain output may decrease by about 54.6% in 2022, and the global corn price trend is still upward. There is still a gap between supply and demand of corn in China. According to customs data, China imported 28.35 million tons of corn in 21 years, a year-on-year increase of 151%. At the end of the 21st century, La Nina phenomenon appeared for the second consecutive year, which is expected to exacerbate rainfall and drought around the world, and then affect the output of food crops. Food prices are still in an upward trend, and the high boom of food planting will continue. The company has high-quality land resources, which are mainly distributed on the Sanjiang Plain, one of the three most fertile black soil belts. It is a "natural granary" with strong market competitiveness. If the land rent is increased, the performance flexibility of the company is large.
Profit forecast and investment suggestions. It is estimated that the EPS from 2022 to 2024 will be 0.59 yuan, 0.66 yuan and 0.74 yuan respectively, and the corresponding dynamic PE will be 27, 24 and 21 times respectively, maintaining the "buy" rating.
Risk warning: Shenzhen Agricultural Products Group Co.Ltd(000061) price is lower than expected, farmers' farming enthusiasm is lower than expected, and weather conditions are lower than expected.
