\u3000\u3 China Vanke Co.Ltd(000002) 311 Guangdong Haid Group Co.Limited(002311) )
Event:
Guangdong Haid Group Co.Limited(002311) released the annual report of 2021 & the first quarter report of 2022: the total operating revenue in 2021 was 85.999 billion yuan, an increase of 42.56% year-on-year; The net profit attributable to the parent company was 1.596 billion yuan, a year-on-year decrease of 36.73%. In the first quarter of 2022, the total operating revenue was 19.953 billion yuan, an increase of 26.98% year-on-year; The net profit attributable to the parent company was 201 million yuan, a year-on-year decrease of 71.62%.
Key investment points:
The main revenue increased steadily, the pig price was low, and the pig sector dragged down the performance.
① in 2021, the total operating revenue was 85.999 billion yuan (an increase of 42.56% year-on-year), and the net profit attributable to the mother was 1.596 billion yuan (36.73% year-on-year), of which the pig breeding business lost 896 million yuan in the whole year. In 2022q1, the company realized an operating revenue of 19.953 billion yuan (year-on-year + 26.98%), and the net profit attributable to the mother was 201 million yuan (year-on-year – 71.62%), of which the net profit attributable to the mother of pig breeding business was about -302 million yuan (year-on-year – 236.07%), excluding other businesses of pig breeding, the net profit attributable to the mother was 503 million yuan (year-on-year caliber + 3.52%).
② during the reporting period, the war between Russia and Ukraine and the weather in South America led to a sharp rise in the price of global agricultural and sideline products after the Spring Festival, and the cost of feed and breeding increased sharply. At the same time, in addition to the major impact on catering consumption, covid-19 epidemic in China also continues to hinder the transportation of feed products, raw materials, seedlings, live birds, live fish and other materials. The whole feed and breeding industry is also seriously affected by logistics, among which live birds and special water fish with high dependence on catering consumption and living transportation have the most obvious impact. During the reporting period, pig breeding has been in a deep loss cycle; Poultry farming hovers on the cost line, with more losses and less profits; The profit of aquaculture is relatively good, but the price has dropped after being affected by the epidemic; The aquaculture industry as a whole is not optimistic.
③ from the perspective of expense change, the company’s sales expense in 2021 was 1.808 billion yuan (year-on-year + 34.66%), mainly due to the expansion of the company’s business scale, the increase of personnel, the improvement of salary level, the increase of amortization of expenses for the implementation of stock option incentive plan in 2021, and the corresponding increase of travel and other expenses; The management expense was 2.229 billion yuan (year-on-year + 42.95%), mainly due to the expansion of the company’s business scale, the increase in the number of managers, the improvement of salary and welfare level, the increase in the amortization of the implementation of the stock option incentive plan in 2021, and the increase in office expenses; The company’s financial expenses amounted to 403 million yuan (year-on-year + 70.54%), mainly due to the increase of the company’s loan scale and the increase of interest expense due to the increase of loan interest rate after the due repayment of covid-19 epidemic subsidy loan at the beginning of the period, as well as the increase of unrecognized financing expense amortization of lease liabilities in accordance with the new lease standards.
Feed sales reached a new high and the market share further increased. In 2021, the company sold 19.63 million tons of feed, including 860000 tons of internal aquaculture sales. The company achieved 18.77 million tons of external sales of feed (year-on-year + 28%), much higher than the growth rate of the industry, including 9.44 million tons of poultry feed (year-on-year + 11%), 4.6 million tons of pig feed (year-on-year + 100%), 4.67 million tons of aquatic feed (year-on-year + 21%), and the company’s common fish feed and shrimp and crab feed increased by 21% and 35% respectively. In 2022q1, the company achieved 4.19 million tons of feed sales (excluding internal breeding sales), with a year-on-year increase of 22%, and the sales volume maintained a stable growth. At present, the feed industry is in the stage of capacity withdrawal of small enterprises. The price of raw materials represented by soybean meal has risen sharply, the feed price has been rising continuously, the cost advantage and product power advantage of the company have been continuously strengthened, and various feed varieties can form a certain complementarity, laying a solid foundation for reaching the sales target of 40 million tons in 2025.? The breeding service system has been further improved and the core competitiveness has been continuously enhanced. In 2021, the company’s seedling business achieved an operating revenue of 855 million yuan (a year-on-year increase of 42.30%), with a gross profit margin of 51.22%,. Aiming at the core problem of the degradation of germplasm resources in the aquatic seed industry, the company has developed and launched a variety of new national aquatic varieties such as Litopenaeus vannamei “haixingnong No. 2” shrimp seedlings and long pearl hybrid mandarin fish. The company’s dynamic insurance business achieved an operating revenue of 892 million yuan (year-on-year + 34.27%), with a gross profit margin of 50.85%; Among them, the operating income of aquatic animal protection reached 676 million yuan (year-on-year + 26.48%), with a gross profit margin of 54.10%; Livestock and poultry animal protection achieved an operating revenue of 216 million yuan (year-on-year + 66.29%) and a gross profit margin of 40.70%. The company continued to promote the “thousand store plan” of the core breeding regional service station. By integrating the advantages of the company’s industrial chain, the company established a comprehensive service platform for advanced products and technologies in the industry, provided breeding technical services for farmers and expanded the company’s leading advantage in the industry.
Profit forecast and investment rating considering the continuous rise of raw material prices and the slight rise of breeding costs at the beginning of 2022, we believe that the profit in 2022 will be slightly reduced. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 2.209/55.3/6.121 billion respectively, and the corresponding PE will be 40.52/16.19/14.62 times respectively. Considering the upward trend of pig boom in 2023, the company’s pig business increased profits, and the main feed maintained a steady growth trend, maintaining the “buy” rating
Risk warning: the risk of periodic fluctuation of feed industry affected by abnormal weather and breeding diseases; The risk of substantial fluctuations in the prices of major raw materials; Risks of environmental protection laws and policies on the scale structure and regional adjustment of aquaculture industry; Risk of exchange rate fluctuation; Risk of continuous decline in pig prices; The risk that the company’s performance does not meet expectations, etc.
