\u3000\u3 China Vanke Co.Ltd(000002) 714 Muyuan Foods Co.Ltd(002714) )
Event:
In March, 5.986 million pigs were sold (including 527000 piglets), a year-on-year increase of + 111%; The sales revenue was 7.43 billion yuan, a year-on-year increase of + 5%; The average selling price is 11.7 yuan / kg.
Q1 sold a total of 13.817 million pigs, a year-on-year increase of + 79% (including 12.975 million fat pigs, yoy + 112%; 809000 piglets, yoy-45%; 33000 breeding pigs, yoy-73%); The total sales revenue was 17.59 billion yuan, a year-on-year increase of – 9%.
Our analysis and judgment:
1) the number of sales in March exceeded expectations. Mainly due to 1) affected by the Spring Festival holiday in February, part of the slaughter was reflected in March. The weight of fattening pigs was normal, and it was estimated that it was still about 110kg; 2) The company’s pig breeding system has strong hematopoietic support capacity, and the market demand for piglets is high. The sales of piglets reached 527000 in March, with a marginal increase in the slaughter volume in March.
2) sufficient capacity reserves, laying a solid foundation for the company’s subsequent growth. By the end of March, the company had a breeding stock of 2.752 million sows and 30 + million pigs. On the one hand, it laid a foundation for the future growth of the company. We expect the company to sell 5k-6k and 6k-7k in 20222023; On the other hand, the company deeply cultivates the pig track and has excellent pig operation and management. It can flexibly adjust the sales rhythm of piglets and breeding pigs according to the market situation, thicken the profits and optimize the operating cash flow.
3) there is still room for cost control in the industry. The company adopts the self breeding mode and has formulated a series of standardized systems and technical specifications for various production processes in business links such as feed processing, breeding pig breeding, breeding pig expansion and commercial pig breeding. Under the background of the sharp rise of feed raw materials from January to February, the complete breeding cost is still controlled at about 16 yuan / kg. In the follow-up, the company will also reduce the dispersion of the company’s internal breeding achievements by improving the operation efficiency of high-cost backward farms and subsidiaries, strengthening internal management and personnel empowerment training, and achieve the company’s full cost target of 13 yuan / kg this year.
Continue to give “buy” rating
It is estimated that from 2021 to 2023, the company will realize revenue of 79.628103.442163.414 billion yuan, with an increase of 41.49% / 29.91% / 57.98%, and net profit attributable to parent company of 79.15/98.15/54.360 billion yuan, with an increase of – 71.17% / 24.01% / 453.83%. We believe that the current company corresponds to the average market value of 42004400 yuan / head in 2023. Considering the cost advantage of the company, the future business cycle is high, the average profit is high, and the fulfillment degree of the company’s historical listing cost is high, we continue to focus on recommendation!
Risk tips: 1. Epidemic risk; 2. Price fluctuation, 3. Risk of policy change; 4. Less than expected
