\u3000\u30 China High-Speed Railway Technology Co.Ltd(000008) 95 Henan Shuanghui Investment & Development Co.Ltd(000895) )
Core view
Event: the company released 21 annual reports, with annual revenue of 66.68 billion yuan (- 9.7%) and net profit attributable to parent company of 4.87 billion yuan (- 22.2%); Among them, Q4’s revenue was 15.72 billion yuan (- 13.3%), the net profit attributable to the parent company was 1.41 billion yuan (+ 7.3%), the profit end improved significantly year-on-year, and the operation inflection point appeared.
The profit per ton of meat products initially benefited, and the profit margin of 22 years increased. The company’s 21 year revenue of meat products business was 27.35 billion (- 2.7%), the external sales volume of meat products was 1.558 million tons (- 1.8%), the ton price was basically the same year-on-year, and the operating profit per ton increased by about 3% year-on-year; Looking at 21q4 alone, the average operating profit per ton of meat products exceeded 4000 yuan, with a year-on-year increase of 25% +, and the boosting effect of downward cost on ton price has initially appeared. Looking forward to the next 22 years, as the pig price continues to be low (according to the consensus expectation of the market, there will be a price rebound in 22q3, and the annual average price is significantly lower than that in 21 years), the company’s meat products business is expected to enjoy cost dividends and abundant profit space.
Slaughtering is under pressure due to the impairment of frozen products, and the inventory has been basically cleaned up before the Spring Festival. The 22-year slaughtering fresh sales volume + beneficial supplement of frozen meat will shape the performance elasticity. The company’s slaughtering business had an annual revenue of 39.07 billion (- 19.0%), of which 11.12 million pigs (+ 56.8%) were slaughtered. Together with the import of frozen meat, the external sales volume of fresh frozen meat was 1.633 million tons (+ 18.2%), but the average selling price per ton decreased by about 30%. The operating profit of slaughtering business in 21 years was only 90 million (- 94.1%), mainly due to the provision of large amount of frozen goods impairment throughout the year. At present, the company’s frozen product inventory has been basically digested (about 300 million impairment has been transferred back in Q4). In 22 years, it will go into battle with light equipment. On the one hand, it will grasp the low pig price and expand the proportion of slaughtering market. On the other hand, it will form part of domestic frozen meat and sell it at the right time to increase profits by relying on the market of low pig price and high pig price.
The inflection point of the company’s performance has reached, and the double business profit in 22 years is expected to increase significantly. Combined with the current undervalued level, it is recommended to focus on and recommend the low-level layout. 1) In terms of meat products business, the company’s new products have been continuously promoted, and the catering business department and conditioning products have developed rapidly; The annual net increase of terminal outlets was 100000, and the channel foundation was further consolidated; With active marketing innovation and strengthened brand advantages, the sales volume and income in 22 years are expected to increase steadily. With the decline of cost and profit growth, it will increase market investment and open a positive cycle of operation. 2) In terms of slaughtering business, in view of the similar pig price market, the slaughtering profit scale in 22 years is expected to be benchmarked for 18 years, ushering in a situation of both volume and profit. 3) In terms of resale of frozen meat, the company has basically no burden at present. In the future, it is expected to adopt a more prudent strategy to support the control of pure slaughtering profits and raw materials of meat products in the high cost period, so as to form a beneficial supplement to the traditional business.
Profit forecast and investment suggestions
As the decline of pig price exceeds the expectation, which has a certain inhibition on the ton price of products, we predict that the company’s earnings per share in 22-24 years will be 1.81/2.02/2.23 yuan respectively (the EPS in 22 and 23 years is expected to be 1.84/2.13 yuan before adjustment). Using the valuation of comparable companies, we will give 19 times PE in 22 years, corresponding to the target price of 34.39 yuan in 22 years, and maintain the “buy rating”.
Risk tips
The sales volume of meat products is lower than expected; Price fluctuation of raw materials; Slaughter expansion is less than expected risk
