\u3000\u3 China Vanke Co.Ltd(000002) 311 Guangdong Haid Group Co.Limited(002311) )
Event: the company disclosed the annual report of 2021 and the first quarterly report of 2022. In 2021, the company achieved an operating revenue of 86 billion yuan, a year-on-year increase of 43%, and a net profit attributable to the parent company of 1.6 billion yuan, a year-on-year decrease of 37%; In 2022q1, the operating revenue was 19.953 billion yuan, a year-on-year increase of 26.98%, and the net profit attributable to the parent company was 201 million yuan, a year-on-year decrease of 71.62%.
In addition to breeding, the main industry maintained high growth, and the comprehensive competitiveness and market share were further improved. In 2021, the company exported 18.77 million tons of feed and successfully achieved the unlocking target of 18.5 million tons of equity incentive. The sales volume increased by 28% year-on-year, far exceeding the overall growth rate of the industry. The market share of the company in China further increased from 5.8% in 2020 to 6.69%. The sales volume of Q1 feed continued to grow steadily in 2022. With clear and excellent product power, perfect product categories and comprehensive technical services in the whole process of breeding, the company continues to create value for customers and continuously improve its industry competitiveness, which will help the company continue to strive to achieve the strategic goal of 40 million tons by 2025. In 2021, the pig breeding business suffered a lot of losses due to the impact of the price cycle. After excluding the pig breeding business, the company realized an operating revenue of 81.357 billion yuan, a year-on-year increase of 43.71%, and a net profit attributable to the parent of 2.492 billion yuan, a year-on-year increase of 32.97%, maintaining a steady and high-speed growth.
The management level of pig breeding continues to improve, and animal protection seedlings and aquaculture are expected to contribute to new growth. The company sold about 2 million pigs throughout the year, mainly fattening the purchased piglets, with high initial cost. With the continuous improvement of the company’s biological prevention and control ability and the scale advantage of the company’s feed end, the company’s breeding indicators gradually improved, the survival rate of fattening section exceeded 90%, and the cost decreased step by step. The company positions the pig breeding business as a strategic sector to deepen the understanding of the industry. In the future, it will aim to improve the comprehensive breeding capacity, and the pace of expansion is expected to be relatively stable. We believe that with the inflection point of the pig cycle approaching and the gradual decline of the company’s breeding costs, the impact of pig breeding on the company’s overall performance is expected to change from negative to positive. In addition, in 2021, the revenue and profitability of the company’s dynamic insurance seedling business continued to improve. The dynamic insurance and seedling business contributed an operating revenue of 855 million yuan and 892 million yuan respectively, with a year-on-year increase of 42.3% and 34.27% respectively, and the gross profit margin remained above 50%; In addition, the company has also been involved in the breeding of special aquatic products such as raw fish and shrimp. In the future, it plans to further expand the breeding scale, which is expected to bring new performance growth to the company.
Profit forecast and investment rating of the company: we are optimistic about the core competitiveness and market share of the company’s main feed and supporting business, and the impact of pig business is expected to change from negative to positive. It is estimated that the net profit attributable to the parent company in 22-24 years is RMB 2.760 billion, RMB 4.109 billion and RMB 6 billion respectively, EPS is RMB 1.66, RMB 2.47 and RMB 3.61, and PE is 32, 22 and 15 times, maintaining the “strongly recommended” rating.
Risk tip: the company’s feed sales are less than expected, and the risk of pig price fluctuation, etc
