\u3000\u30 Beijing Telesound Electronics Co.Ltd(003004) 98 Wens Foodstuff Group Co.Ltd(300498) )
Core view
Event: the company recently released its annual report for 2021, with an annual operating revenue of 64.95 billion yuan, a year-on-year increase of – 13.3%; The net profit attributable to the parent company was – 13.4 billion yuan, a year-on-year increase of – 280.5%.
The growth of live pigs returned to the market, and the impairment fell to the ground and went into battle with light equipment. In 2021, the company sold 132174 million pigs, with a year-on-year increase of + 38.5%. The average selling price of hairy pigs was 17.39 yuan / kg, with a year-on-year increase of – 48.2%. Due to the sharp decline in the price, the increase in the price of feed raw materials, the fattening of some purchased pig seedlings, the continuous promotion of pig breeding optimization and other factors, the company’s pig breeding business suffered a deep loss. Since Q3, the company’s pig raising sector has improved significantly, and the listing rate of pigs has steadily rebounded to about 85% for many consecutive months; The structure of breeding pigs has been continuously optimized and the efficiency has been steadily improved. Since Q3, the average number of healthy piglets per litter has remained at 10.1-10.3. In the past 21 years, the company’s provision for impairment of biological assets was about 2 billion yuan, of which the impairment of breeding pigs was 1.907 billion yuan. With the implementation of impairment and the improvement of listing rate, the cost factors hindering the company are gradually eliminated. In January, the comprehensive total cost of pigs of the company has been less than 18 yuan / kg, and the cost is still expected to improve steadily in the future.
The efficiency of the poultry industry has been steadily improved, and the downstream transformation has been continuously promoted. In 2021, the company sold 1.101 billion broilers, a year-on-year increase of + 4.8%, and the listing rate was 94.75%, a record high; 579789 million meat ducks were sold, with a year-on-year + 1.8%, and the listing rate was 94.07%, with a year-on-year + 5.02 PCT. The company continued to improve the efficiency of poultry breeding, continuously optimized the feed formula and hedged the impact of the rising price of feed raw materials. In 21 years, the feed to meat ratio of Broilers and ducks decreased by 0.15 and 0.07 year-on-year respectively. At the same time, the company continued to promote the transformation and upgrading of the poultry industry, and strengthened the development of poultry slaughtering and prefabricated vegetable business. In 2021, the company sold 150 million fresh chickens, a year-on-year increase of + 18.3%; The sales volume of fresh ducks was 9.8786 million, a year-on-year increase of + 313.3%; The company sells 16889 tons of prefabricated vegetable products. At present, the company has completed a total production capacity of 285 million broiler slaughters per shift per year, which strongly supports the further development of fresh chicken sales business.
Sufficient capital reserves, not afraid of the cold winter of the cycle. At the end of 2021, the company’s Book Monetary Capital and tradable financial assets totaled 11.56 billion yuan. In addition, by the end of January, the company had billions of financial investment projects that can be realized at any time. We believe that the capital reserve is sufficient and we have sufficient strength to get through the bottom of this round of pig cycle.
Profit forecast and investment suggestions
Affected by the rise of raw materials in 22 years, the industry’s losses have intensified, and the reversal expectation is more certain. We have lowered the profit forecast for 22 years and raised the profit forecast for 23 years. The net profit attributable to the parent company in 22-24 years is expected to be 833 million yuan, 12965 million yuan and 4375 million yuan respectively (the original forecast is 990 million yuan and 12634 million yuan in 22-23 years), with a year-on-year increase of + 106.2%, 1457.1% and – 66.3%. With reference to the valuation of comparable companies, it maintains the “buy” rating of 11xpe covering 23 years for the first time, with a target price of 22.44 yuan.
Risk tips: epidemic risk, pig price fluctuation risk, raw material price fluctuation risk, food safety risk, etc.
