\u3000\u3 China Vanke Co.Ltd(000002) 311 Guangdong Haid Group Co.Limited(002311) )
The company disclosed the annual report of 2021 and the quarterly report of 2022. In 2021, the company achieved an operating revenue of 8599856 million yuan, with a year-on-year increase of 42.56%, and the attributable net profit of 159605 million yuan, with a year-on-year decrease of 36.73% and eps0.5% 96 yuan, weighted average roe11 46%, down 12.41 percentage points year-on-year. The profit distribution plan is to distribute a cash dividend of 1.5 yuan (including tax) for every 10 shares. In the first quarter of 2022, the company achieved an operating revenue of 1995322 million yuan, a year-on-year increase of 26.98%, and a net profit of 200.70 million yuan, a year-on-year decrease of 71.62%.
The year-on-year decline of the company's performance in 2021 was mainly due to the loss of pig breeding business, but the net profit of other businesses excluding pig breeding increased by 32.97%. The company sold about 2 million pigs in 2021. Affected by the downturn in pig prices after the second quarter, the impact of pig breeding business on the attributable net profit was -896 million yuan, a year-on-year decrease of 238.09%. Excluding other businesses of pig breeding, the attributable net profit in 2021 was 2.492 billion yuan, a year-on-year increase of 32.97%.
Feed, seedling and animal protection are the core business of the company. In 2021, the main feed categories of the company maintained steady growth and further improved market share. According to the disclosure of China Feed Industry Association, the total output of industrial feed in 2021 increased by 16.1% year-on-year, including 46.6% year-on-year increase of pig feed, 3.6% year-on-year decrease of egg and poultry feed, 2.9% year-on-year decrease of meat and poultry feed, 12.2% year-on-year increase of ruminant feed and 8% year-on-year increase of aquatic feed. In this industry environment, the company's total feed sales in 2021 were 19.63 million tons, including 860000 tons of internal breeding sales and 18.77 million tons of export sales, a year-on-year increase of 28%. In 2021, the sales volume of pig feed increased by 100% year-on-year to about 4.6 million tons; The sales volume of poultry feed was 9.44 million tons, a year-on-year increase of 11%; The sales volume of aquatic feed was 4.67 million tons, with a year-on-year increase of 21%. Benefiting from the advantages of the company in shrimp seedlings, shrimp feed, aquatic animal protection and service mode, the annual sales volume of shrimp and crab feed of the company increased by 35% year-on-year. In 2021, the main feed categories of the company achieved steady growth, and the growth rate was significantly higher than that of the industry, and the market share was further improved. Among them, poultry feed achieved contrarian growth under the condition of industry decline.
The business of animal protection and seedling will continue to develop in 2021. In 2021, the company realized an operating revenue of 892 million yuan from its dynamic insurance business, with a year-on-year increase of 34.27% and a gross profit margin of 50.85%; Among them, the operating income of aquatic animal protection reached 676 million yuan, with a year-on-year increase of 26.48% and a gross profit margin of 54.10%; Livestock and poultry animal insurance realized an operating revenue of 216 million yuan, a year-on-year increase of 66.29% and a gross profit margin of 40.70%. In 2021, the company's seedling business achieved an operating revenue of 855 million yuan, with a year-on-year increase of 42.30% and a gross profit margin of 51.22%. Among them, the "haixingnong No. 2" shrimp seedling of Litopenaeus vannamei developed and launched by the company has the characteristics of fast growth, strong stress resistance and high survival rate. Combined with the breeding service scheme formed by the company's feed animal protection products, it has performed prominently in various breeding areas and quickly promoted the sales of shrimp feed.
Pig breeding lost money in the first quarter of 2022, but the feed market share accelerated. In the first quarter of 2022, the company raised about 830000 pigs. Although the breeding cost of the company decreased significantly in the first quarter, affected by the downturn of pig prices, the attributable net profit of pig breeding business was about -302 million yuan, a year-on-year decrease of 236.07%. At the same time, excluding other businesses of pig breeding, the company achieved an operating revenue of 18.579 billion yuan, a year-on-year increase of 29.77%, and an attributable net profit of 503 million yuan, a year-on-year increase of 3.52%. Since the beginning of the year, the war between Russia and Ukraine and the weather in South America have led to a large increase in the global Shenzhen Agricultural Products Group Co.Ltd(000061) price, a sharp increase in the cost pressure of feed raw materials such as soybean meal, accelerated the withdrawal of small and medium-sized enterprises without scale advantages and formula R & D reserve advantages, and further concentrated their market share to the head. According to the disclosure of China Feed Industry Association, the cumulative total output of industrial feed in China increased by 3.5% year-on-year from January to February 2021. In the first quarter of 2022, the company sold 4.19 million tons of feed (excluding internal breeding sales), an increase of 22% year-on-year, and further improved its market share.
The company's future strategic planning is clearer. (1) Feed, seedling and animal protection are the core business; (2) On the premise of stability, the breeding business should be cultivated patiently, the pig business should maintain the existing investment scale, adopt the relatively light asset model, quickly improve the management ability and professional ability, and strive to reach the industry-leading level in the cost of pig breeding within two years; (3) No new investment will be added to poultry breeding and slaughtering, and the original poultry business will aim to improve its capacity; (4) The aquaculture business will focus on the industrialized shrimp farming and raw fish farming that the company has the overall advantages. The industrialized shrimp farming business is expected to become another new growth point in addition to feed, seedling and animal protection in the next two years.
The main reasons why we are optimistic about Guangdong Haid Group Co.Limited(002311) are as follows: (1) judging from the year-on-year trend of quarterly performance, the first quarter may be the low point of the whole year, and it is expected to improve quarter by quarter in the future; (2) The corresponding valuation of other businesses excluding pig breeding business is at a historically low level; (3) Since the beginning of this year, the price rise of upstream raw materials and the downturn of downstream breeding market have brought pressure on the whole feed in the short term, but due to the relatively poor pressure resistance of small and medium-sized enterprises, small and medium-sized enterprises will accelerate their withdrawal, the market share is expected to further concentrate on Guangdong Haid Group Co.Limited(002311) and other leading enterprises, and the company's competitive environment will be further optimized; (4) The company's stock option incentive plan has wide employee coverage and clear objectives. At present, the stock price is close to the exercise price of equity incentive.
Profit forecast, valuation analysis and investment suggestions: it is estimated that the company's net profit attributable to the parent company from 2022 to 2024 will be RMB 2.520/4.522/5.509 billion, with a year-on-year increase of 57.9% / 79.4% / 21.8%, corresponding to EPS of RMB 1.52/2.72/3.32 and PE of 39 / 22 / 18 times. It will be rated as "Buy-A" for the first time.
Risk tips: the resurgence of livestock and poultry epidemic leads to lower than expected sales of livestock and poultry feed, lower than expected sales of aquatic feed due to extreme weather, and the price fluctuation risk of raw materials such as fish meal and corn soybean meal.
