\u3000\u30 Beijing Telesound Electronics Co.Ltd(003004) 98 Wens Foodstuff Group Co.Ltd(300498) )
Event:
The company released its 2021 annual report: in 2021, it realized an operating revenue of 64.954 billion yuan, a year-on-year decrease of 13.31%; The net loss attributable to the parent company was 13.404 billion yuan, with a profit of 7.426 billion yuan in the same period last year; The net loss attributable to the parent company after deducting non profits was 14.666 billion yuan, with a profit of 6.381 billion yuan in the same period last year.
Comments:
With the depressed pig price and the provision for large asset impairment, the company's net profit decreased significantly.
1) pork business: the price of pork fell sharply. In 2021, the average selling price of the company's hairy pigs was 17.39 yuan / kg, down 48.18% year-on-year. At the same time, the price of feed raw materials and the fattening of some purchased pig seedlings pushed up the cost of raising pigs, resulting in deep losses in the pork business; 2) The average price of broiler chicken increased by 13.50% year-on-year, and the average market price of broiler chicken increased by 13.50%. However, the continuous rise in the price of feed raw materials has raised the breeding cost, and the chicken business only makes up for the loss of some pig business. 3) The company has made impairment provision of about 2 billion yuan for consumptive biological assets and productive biological assets, and amortized equity incentive expenses of 495 million yuan. At the same time, the company increased financing in response to the downturn of the industry, and the annual financial expenses were 1.163 billion yuan, a significant increase of 967 million yuan year-on-year.
The company has sufficient sows, sufficient funds and guaranteed marketing objectives.
Since June of 21 years, the number of fertile sows has continued to decline. By the end of February 2022, China had 42.68 million fertile sows, down 6.48% from the peak in June. June 2021 is the high point of breeding sows, which theoretically corresponds to the peak of pig slaughter from April to May of 22 years. Considering the game between breeding end and slaughtering end at the bottom of the cycle, the low point of pig price is expected to appear in 22q2-q3, and 22q4 pig price is expected to reverse. The company has sufficient sow reserves, with 1-1.1 million high-quality sows, about 400000 reserve sows, and 1 million small breeding pigs that can be used as reserve sows, which can ensure the goal of 18 million in 2022. By the end of 2021, the company had cash assets of RMB 11.559 billion, including monetary capital of RMB 7.633 billion and trading financial assets of RMB 3.926 billion, with guaranteed capital.
Earnings forecast, valuation and rating
We expect that the company's revenue from 2022 to 2024 will be 66.33/99.37/116.54 billion yuan respectively, with a year-on-year increase of 2.12% / 49.81% / 17.28%; The net profit attributable to the parent company was -83.7/201.5/11.69 billion yuan respectively, with a year-on-year increase of 37.59% / 340.82% / - 41.97%; BPS is 3.64/5.84/7.11 yuan / share respectively, and the corresponding Pb is 5.89x/3.67x/3.02x respectively. The company's cost has improved significantly and its cash flow is abundant. It has expanded rapidly with the "company + farmers" model. Maintain the target price of 25 yuan and maintain the "buy" rating.
Risk warning: inventory impairment risk, animal epidemic outbreak risk and price fluctuation risk
