\u3000\u30 China High-Speed Railway Technology Co.Ltd(000008) 95 Henan Shuanghui Investment & Development Co.Ltd(000895) )
Event: the company released an annual report. In 2021, the company achieved a total operating revenue of 66.798 billion yuan, a year-on-year decrease of 9.65%; The net profit attributable to the parent company was 4.866 billion yuan, a year-on-year decrease of 22.21%. Among them, Q4 alone achieved a total operating revenue of 15.753 billion yuan, a year-on-year decrease of 13.31%; The net profit attributable to the parent company was 1.413 billion yuan, a year-on-year increase of 7.28%.
The high base plus the impairment of frozen goods dragged down the annual performance, and the Q4 performance improved significantly month on month. From Q1 to Q4 in 2021, the revenue of each quarter was 4.13% / – 11.66% / – 16.79% / – 13.31% year-on-year, the net profit attributable to the parent was -1.61% / – 30.47% / – 51.73% / + 7.28% year-on-year, and the annual net interest rate was 7.32%, a year-on-year decrease of 1.3pcts. The main reasons for the performance pressure are: 1) the base number of last year was high; 2) Pig prices fell more than expected in the second and third quarters, and the impairment of domestic and imported frozen meat of the company increased significantly. Q4 profit growth improved significantly year-on-year, mainly due to the rebound in meat prices in the fourth quarter, and the company increased the delivery of frozen products, so the impairment of Q3 was offset. By business:
Slaughtering business: in 2021, the company’s slaughtering business achieved a revenue of 39.073 billion, a year-on-year decrease of 19.05%, mainly due to the sharp decline in pig prices. The average pig price in 2021 was 20.68 yuan / kg, a year-on-year decrease of 39%. In 2021, the company slaughtered 11.12 million pigs, up 56.8% year-on-year. Among them, 2.8 million pigs were slaughtered in Q4, a year-on-year increase of 21%. With the decline of pig price, the company’s Q4 slaughtering business realized an operating profit of 430 million yuan, a year-on-year increase of 13%, and the average slaughtering profit increased to about 60 yuan / head.
Meat products business: in 2021, the company’s meat products business achieved a revenue of 27.351 billion, a year-on-year decrease of 2.66%, of which the sales volume decreased by 1.85% year-on-year and the ton price decreased by 0.83% year-on-year. We expect that it is mainly due to 1) the weak overall consumption this year, that is, the high base of last year; 2) Under the 20-year epidemic situation, the proportion of medium and high-end products in commercial supermarket channels is relatively high; 3) The cost of the company is high during the downward trend of pig price, and the price reduction of competitive products affects the sales volume of the company. The operating profit margin of meat products in 21 years was 21.23%, with a year-on-year increase of 0.75pct. Among them, q1-4 achieved an operating profit margin of 20.1% / 18.4% / 22.8% / 23.5%, a year-on-year increase of -0.25 / – 3.07 / + 1.98 / + 4.54pcts. In the third and fourth quarters, the benefit cost decreased and the profit improved significantly. Q4 achieved a single ton profit of about 4170 yuan, a year-on-year increase of about 25%, a record high.
Affected by the high base + weak consumption + impairment of frozen meat, the company’s performance in 21 years was under pressure. Looking forward to 2022, China’s pig production capacity will recover, and the overall pig price is expected to show a downward trend, which is conducive to the expansion of the company’s slaughtering business and the reduction of the cost of meat products business. On the whole, the slaughtering business is expected to achieve both volume and profit growth, and the meat products business is expected to achieve sales growth while maintaining a high profit margin.
Profit forecast: according to the annual report of the company for 21 years and the forecast of pig price for 22 years, the profit forecast is adjusted. It is estimated that the company will achieve a revenue of 72.7/82.4/90.7 billion yuan in 22-24 years, with a year-on-year increase of 8.87% / 13.35% / 10.08% (4.98% / 5.64% before 22 / 23 years), a net profit of 6.320/72.50/7.988 billion yuan, with a year-on-year increase of 29.88% / 14.73% / 10.17% (17.48% / 15.35% before 22-23 years), and EPS of 1.82/2.09/2.31 yuan respectively, maintaining the “buy” rating of the company.
Risk warning: macroeconomic downside risk; Food safety risks; Covid-19 epidemic risk; Risk of rising costs
