\u3000\u3 China Vanke Co.Ltd(000002) 041 Shandong Denghai Seeds Co.Ltd(002041) )
Performance summary: in 2021, the company achieved an operating revenue of 1.1 billion yuan, a year-on-year increase of 22.2%, a net profit attributable to the parent company of 230 million yuan, a year-on-year increase of 128.3%, and a net profit attributable to the parent company of 180 million yuan after deduction, a year-on-year increase of 292.9%.
Comments: in the 21st year, the company’s performance achieved rapid growth, mainly due to the rising food prices, the high planting enthusiasm of farmers and the improvement of the company’s seed business. Under the fierce competition of a large number of approved varieties of corn seeds, the company seized the opportunity of the recovery price of commercial corn and the recovery of corn seed demand to increase sales. During the reporting period, the revenue of corn seeds was 980 million yuan, with a year-on-year increase of 24.7%, accounting for 88.9%, the gross profit margin was 38.2%, with a year-on-year increase of 8.6 percentage points, and the revenue of wheat seeds was 60 million yuan, with a year-on-year increase of 4.4%, accounting for 5.5%. In addition, the profitability of subsidiaries has been greatly improved. The net profit of Denghai pioneer is 16.654 million, that of Denghai Wuyue is 3.56 million, and that of Denghai Daoji is 5.957 million.
There is still a gap between supply and demand of corn, the price is at a high level, and the planting enthusiasm is expected to remain high in the future. In 2016, the cancellation of temporary storage policy and subsequent policies related to the reduction of corn planting area successfully promoted the de stocking of corn. As of 2020, the corn planting area was 41.26 million hectares, a decrease of 3.71 million hectares compared with the peak in 2015, a decrease of 8.3%. In 2021, the annual corn planting area was 43.32 million hectares, a year-on-year increase of 5%, the annual corn output was 270 million tons, a year-on-year increase of 4.5%, and the imported corn was 28.35 million tons, a year-on-year increase of 152.2%. From the demand side, the demand for corn as feed raw materials will increase with the downstream breeding. Moreover, due to the geographical conflict between Russia and Ukraine, climate impact and other factors, global food prices may remain high. As a leading seed production enterprise, the company is expected to give full play to its own advantages and improve its market share. The company is the first pilot enterprise to implement the “integration of breeding, propagation and promotion”, which is an important embodiment of the strong market competitiveness and comprehensive strength of seed enterprises. Since Denghai 605 and Denghai 618 were approved to enter the market, they have performed well in disease resistance, high yield, lodging resistance, early maturity and other characteristics, and have been welcomed by the broad masses of farmers, Annual sales are growing.
The standardization of seed industry development will be enhanced, the growth environment of enterprises with excellent R & D strength will be optimized, and the work related to transgenic will be gradually promoted. If commercialization is successful, it will bring increment. In 2021, the No. 1 central document issued by the Central Government Council clearly pointed out the importance of food security and seed safety. The action plan for revitalizing the seed industry, which was considered and adopted at the 20th meeting of the Central Commission for comprehensively deepening reform in July, is another important deployment for the development of the seed industry after the introduction of the decision on strengthening seed work in 1962. The meeting pointed out that the development of the seed industry is still not solid and it is more urgent than ever to ensure the independent and controllable seed sources; To implement the relevant requirements of No. 1 central document, the office of the National Crop Variety Approval Committee has revised the national standards for maize and rice varieties, so as to encourage research and development breeding better. The company has rich experience in breeding and has adhered to it for a long time. It has been included in the key laboratories of the state and the Ministry of agriculture, and has successively won 25 national, provincial and ministerial awards, such as the first prize of national Spark, the first prize of national scientific and technological progress, and the first prize of scientific and technological progress of Shandong Province. In January 22, the Ministry of agriculture and rural areas decided to amend some provisions of the four regulations of the administrative measures for the safety evaluation of agricultural genetically modified organisms, the administrative measures for the approval of major crop varieties, the administrative measures for the production and operation license of crop seeds and the provisions on the naming of agricultural plant varieties. In view of the further standardization of genetically modified management, if industrialization will bring market increment, the company actively carries out cooperation and technical reserves, and has a first mover advantage.
Profit forecast and investment suggestions. It is estimated that the EPS from 2022 to 2024 will be 0.34 yuan, 0.46 yuan and 0.59 yuan respectively, and the corresponding dynamic PE will be 71 / 54 / 41 times respectively, maintaining the “hold” rating.
Risk warning: sudden natural disasters; The product sales were not as good as expected.
