\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 975 Hunan New Wellful Co.Ltd(600975) )
Event:
On April 16, 2022, the company issued the suspension notice of planning major asset restructuring, and planned to purchase 100% equity of Tianxin seed industry, 48.2% equity of Yuanjiang Tianxin, 49% equity of Jingzhou Xiangmu, 39% equity of Hengdong Tianxin, 46.7% equity of Linxiang Tianxin, 100% equity of Hunan Tianhan, 100% equity of Chenzhou xiasitian, 100% equity of Xinhua Jiuyang, 100% equity of Hengdong Xinbang, 100% equity of Hunan tianqin Longshan Tianhan 100% equity and raised supporting funds.
Comments:
It is planned to acquire high-quality breeding pig assets, and the annual marketing capacity of the company may be rapidly improved.
The underlying asset Tianxin seed industry is a subsidiary of Hunan Modern Agricultural Industry Holding Group Co., Ltd., a provincial state-owned enterprise. Its main business is the breeding and sales of breeding pigs and live pigs. It has a basic sow stock of about 60000 and an annual production capacity of 1.5 million, including 200000 breeding pigs. Tianxin seed industry has three high standard original pig farms and more than 20 primary breeding farms in China, and its molecular companies are all over Hunan, Hubei, Henan and other provinces. The reorganization is conducive to the company to master the high-quality breeding pig resources in the upstream. If the reorganization can be successfully completed, the company is expected to have 150000 sows, and the annual marketing capacity will be greatly improved.
Hunan is the leading state-owned breeding enterprise, and the production expansion is accelerated at the bottom of the cycle.
The company is a listed pig breeding company subordinate to Hunan SASAC. It has formed a whole pig industry chain from upstream feed production, breeding pig breeding, pig breeding and downstream slaughtering and processing, cold chain logistics, meat supermarket and home distribution sales. In 2021, the company raised 1.03 billion yuan, and the raised funds arrived in the account in the fourth quarter. The turning point of the company’s sales volume is upward. In 2021, the sales volume was about 440000, an increase of more than 30% year-on-year. More than 40 fattening farms are expected to be delivered in 2021. By the end of the year, the annual production capacity of the company exceeds or 1 million pigs.
Earnings forecast, valuation and rating
It is estimated that the operating revenue from 2021 to 2023 will be RMB 2.249/43.89/8.523 billion respectively, with a year-on-year increase of – 17.44% / 95.21% / 94.18% respectively. The net profit attributable to the parent company was -225 / – 438 / 908 million yuan respectively, with a year-on-year increase of -179.65% / – 94.32% / 307.55%, BPS was 2.77/2.23/3.20 yuan / share, and the corresponding Pb was 3.78x/4.70x/3.28x respectively. Referring to the average valuation level of comparable companies and the historical valuation center of the company, and considering the abundant capital of the company, we are accelerating the layout of pig business, giving the company 6x Pb in 2022, raising the target price to 13.14 yuan and maintaining the “buy” rating.
Risk tips
There is still uncertainty in asset restructuring; Price fluctuation risk of raw materials; Pig epidemic risk
