\u3000\u3 Guocheng Mining Co.Ltd(000688) 526 Wuhan Keqian Biology Co.Ltd(688526) )
The event company issued the annual report of 2021 and the report of the first quarter of 2022.
In the past 21 years, the company’s performance continued to grow and the gross profit margin decreased. In the past 21 years, the company’s revenue was 1.103 billion yuan, with a year-on-year increase of + 30.81%, of which pig vaccine and poultry vaccine contributed 1.057 billion yuan and 11 million yuan respectively, with a year-on-year increase of + 29.85% and – 11.23%; The net profit attributable to the parent company was 571 million yuan, a year-on-year increase of + 27.45%; The net profit attributable to the parent company after deduction was 554 million yuan, a year-on-year increase of + 28.59%. The company’s comprehensive gross profit margin was 79.80%, with a year-on-year increase of -2.98pct, mainly due to the depreciation of a large number of new fixed assets; The expense rate during the period was 20.31%, with a year-on-year increase of -1.48pct, mainly due to the large increase of the company’s management expenses. In 2022q1, the company’s operating revenue was 203 million yuan, a year-on-year increase of – 36.46%; The net profit attributable to the parent company was 91 million yuan, a year-on-year increase of – 46.28%; The net profit attributable to the parent company after deducting non-profit was 87 million yuan, a year-on-year increase of – 48.01%; The gross profit margin of sales was 72.95%, with a year-on-year increase of -10.77pct; The expense rate during the period was 22.51%, with a year-on-year increase of + 1.28 PCT, of which the R & D investment was 24 million yuan, with a year-on-year increase of + 13.77%. Dividend plan: cash dividend of 1.9 yuan (including tax) for every 10 shares.
Affected by the downward trend of the pig cycle, the vaccine sales of 22q1 company were affected. In the past 21 years, the income of the company’s pig vaccine increased significantly (+ 29.85%), mainly due to the good demand of the downstream pig breeding industry. The company accelerated its sinking to the township market by holding county and municipal vaccine promotion meetings, and the distribution mode was + 33.44% year-on-year. In the past 21 years, the gross profit margin of the company’s swine vaccine was 81.79%, with a year-on-year increase of -1.95pct, which remained high. 22q1, due to the continuous downturn of pig prices and the decline of downstream farmers’ willingness to purchase vaccines, the company’s vaccine sales were significantly affected by the contraction of market demand, and the quarterly gross profit margin was close to 2019q4. The animal vaccine industry has the post breeding cycle attribute. With the arrival of the upward stage of the pig cycle, the profitability of farmers will recover, which will gradually benefit the vaccine sales and wait for the industry β Elastic regression at the level.
R & D investment has increased significantly, with diversified product layout. Over the past 21 years, the company has invested 80 million yuan in R & D, a year-on-year increase of + 35.42%, accounting for 7.25% of revenue; The company has obtained five new veterinary drug registration certificates, including porcine pseudorabies gE gene deletion inactivated vaccine (hnx-12 strain) and porcine encephalitis B live vaccine (passage cell source, SA14-14-2 strain). 2022q1 company continued to increase R & D efforts, with R & D investment accounting for 11.81% of operating revenue, a record high. By the end of 22q1, the company had obtained 38 new veterinary drug registration certificates, including 29 certificates for cooperative research and development with central China Agricultural University, 8 certificates for cooperative research and development with third parties and 1 Certificate for independent research and development. Among them, many products such as porcine pseudorabies gene engineering live vaccine and bovine infectious rhinotracheitis gene engineering live vaccine are in the process of laboratory research. In addition, the company actively explored the pet vaccine market and the market of probiotics, in which the pet vaccine and diagnostic reagent increased by 166.03% and 66.69% respectively. Based on the existing advantageous products, the company’s performance can be expected with the gradual listing of new products and the arrival of the upward cycle of the pig cycle.
The investment suggestion company is a leading enterprise in the market-oriented sales of pig vaccines in China, and continues to increase R & D investment, realize product diversification, and gradually enhance the competitiveness of the industry. With the arrival of the follow-up pig upward cycle, it will significantly promote the company’s vaccine sales, and the performance growth can be expected. We expect that the company’s EPS from 2022 to 2023 will be 1.23 and 1.68 yuan respectively, corresponding to 19 and 14 times of PE, maintaining the “recommended” rating.
Risk tips
1. Risks of downstream aquaculture industry;
2. Risk of cooperative research and development with central China Agricultural University;
3. Risks of technological innovation;
4. Risks of production safety, etc.
