\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 195 China Animal Husbandry Industry Co.Ltd(600195) )
Events. In 2021, the revenue increased by 6.1% year-on-year, and the net profit attributable to the parent company increased by 62.3% year-on-year. According to the company's annual report for 2021, fy2021 achieved a revenue of 5.3 billion yuan, a year-on-year increase of 6.1%, and a net profit attributable to the parent company of 510 million yuan, a year-on-year increase of 22.2%, including the investment income of Xiamen Kingdomway Group Company(002626) shareholding of 170 million yuan (holding Xiamen Kingdomway Group Company(002626) 2133% equity). After excluding the impact of Xiamen Kingdomway Group Company(002626) investment income, fy2021 achieved a net profit attributable to the parent company of 350 million yuan, a year-on-year increase of 62.3%. Among them, 2021q4 achieved a revenue of 1.4 billion yuan, a year-on-year increase of 3.5%, and a net profit attributable to the parent company of 49.222 million yuan, turning losses into profits year-on-year.
The growth of veterinary drugs was strong, and the biological products were stable as a whole, with excellent performance in the market of foot-and-mouth disease. In terms of segment revenue, fy2021 of biological products / veterinary drugs / feed / trade achieved revenue of 14.3 / 12.6 / 11.0 / 1.45 billion yuan respectively, with a year-on-year change of - 0.25% / + 24.02% / - 1.34% / 2.62%, of which fy2021h2's revenue changed by - 8.7% / + 5.7% / - 1.8% / + 0.5% respectively. It can be seen that under the background of low pig price and capacity removal in the downstream pig breeding industry in the second half of the year, it still recorded steady growth, and the chemical medicine business achieved contrarian growth and significantly outperformed the industry, In addition, we expect that the market of foot-and-mouth disease in biological products will grow by about 25% in the whole year, with excellent performance. Fy2021 overseas (mainly veterinary drugs and biological products) achieved 360 million yuan (YoY + 11.5%), a record high. In the future, with the gradual implementation of overseas export certification such as Inner Mongolia factory, the export business will continue to grow.
Support the improvement of product gross profit from multiple angles and significantly improve the profitability. In terms of distribution gross profit margin, the gross profit margin of biological products / veterinary drugs / feed / trade fy2021 was 58.13% / 31.02% / 18.89% / 4.01% respectively, with a year-on-year change of + 5.46 / + 4.23 / + 0.37 / - 0.15pcts respectively. The gross profit margin of biological products and veterinary drugs increased significantly. We think it mainly benefited from: ① optimization of product structure: the proportion of seedlings in biological products business market and the proportion of preparation products in chemical medicine business increased; ② Capacity upgrading, quality improvement and efficiency enhancement: the capacity upgrading and intelligent production level of Lanzhou new plant are improved to support the improvement of production efficiency and products; ③ The product quality is excellent, and the production capacity is in short supply. While avoiding the white hot price war, the market share is expected to increase significantly. The overall gross profit margin increased to 29.06% (YoY + 2.84pcts), and the expense rate during the period was basically the same as 18.85%, of which the sales expense rate / management expense rate was 9.56% / 8.69% respectively, with a year-on-year change of + 0.87 / - 0.44pct, and the R & D expense rate was 3.07% (yoy-0.33pct). The improvement of gross profit margin supported the increase of net profit margin to 11.08% (YoY + 1.61pcts) year-on-year.
Steady progress has been made in the construction of new production capacity. The market seedlings of veterinary drugs, foot-and-mouth disease and new single products support sustainable growth. The incentive mechanism has been improved and the development vitality has been released. ① Biological products: under the background of the effective promotion of the policy of "fight before supplement" and the gradual elimination of the policy of political seedling collection in 2025, the development opportunities of market seedlings are clear. While the company's political seedling collection remains in the leading position, the market seedlings are gradually in large quantity. The phase II construction of Lanzhou plant is steadily promoted, the scale field customers are steadily expanded + the penetration rate is improved. In addition, there are abundant reserves of new single products, the optimization of biological product sector structure and the continuous growth can be expected. ② Veterinary drugs: the prohibition of feed end resistance and the trend of large-scale breeding promote the demand for high-efficiency therapeutic chemical drugs. The new GMP standard may eliminate the backward production capacity of the industry, so as to promote the improvement of industry concentration. The company, as an industry leader, has priority to enjoy dividends, and the integration of API and preparation can ensure the cost of quality control. The construction of new production line of Inner Mongolia plant brings increment. The combination of China animal husbandry + Southern medicine - muyuan strong and powerful is expected to open a new development space for the company's chemical medicine business. ③ The incentive mechanism of SOE reform promoted by SASAC, including "excess profit distribution" and "contracting", is expected to be implemented in 2022, which is expected to effectively improve the vitality of the core team.
Profit forecast: the company is a leading enterprise in China's animal health insurance, with a comprehensive product layout, continuous competitive advantages in vaccines and chemical drugs, and deterministic growth supported by new production capacity, quality and efficiency improvement. According to the 2021 annual report and the downstream aquaculture industry, we adjusted the profit forecast. It is estimated that the net profit attributable to the parent company from fy20222024 is RMB 680 / 8.9 / 1.14 billion, an increase of 32.9% / 29.9% / 28.3%, corresponding to EPS of 0.67/0.87/1.12 yuan / share and pe16.5% 4X / 12.7x / 9.9x, maintain the "buy" rating.
Risk tip: the outbreak of epidemic diseases in the breeding industry, the repeated covid-19 epidemic, and the progress of production capacity construction are less than expected.
