\u3000\u3 China Vanke Co.Ltd(000002) 041 Shandong Denghai Seeds Co.Ltd(002041) )
Event:
The company released its annual report for 2021: in 2021, the company achieved annual revenue of 1.101 billion yuan, a year-on-year increase of 22.20%; The net profit attributable to the parent company was 233 million yuan, a significant increase of 128.33% year-on-year; The net profit attributable to the parent company after non deduction was 184 million yuan, with a significant year-on-year increase of 292.94%.
Comments:
Farmers’ planting enthusiasm rebounded, and the profitability of the company increased strongly.
In 2021, commodity grain prices continued to rise, farmers’ planting enthusiasm increased, and there was a strong demand for high-quality varieties. Seed stocks fell and the oversupply situation eased. In 2021, the company achieved annual revenue of 1.101 billion yuan, a year-on-year increase of 22.20%; The gross profit margin was 36.31%, with a year-on-year increase of 7.5pct; Corn seed income was 978 million yuan, a year-on-year increase of 24.66%; The gross profit margin of corn seeds was 38.15%, with a year-on-year increase of 8.61pct. The company’s annual net interest rate reached 21.68%, a significant increase of 16.25 PCT year-on-year.
Grain prices remain high, and the seed boom range is expected to be extended to 2024.
At the end of the first quarter, the number of live pigs was 422.53 million, an increase of 1.6% year-on-year. The number of live pigs is still at an all-time high. At the end of the 20 / 21 planting season, the corn inventory consumption ratio was about 40%, and the inventory repression was basically lifted. Superimposed on the Shenzhen Agricultural Products Group Co.Ltd(000061) price rise caused by the conflict between Russia and Ukraine, it is expected that the corn price is expected to remain high from 2022 to 2023, and the seed boom range is expected to continue until 2024. As the self bred high-quality maize varieties have greater upward price elasticity, the company, as the leader of hybrid maize seeds, is expected to become the core beneficiary target in this round of seed cycle.
Earnings forecast, valuation and rating
It is estimated that the company’s revenue from 2022 to 2024 will be 14.46/19.13/2.452 billion yuan respectively, with a year-on-year change of 31.44% / 32.21% / 28.17% respectively; The net profit attributable to the parent company was 336 / 535 / 703 million yuan respectively, with a year-on-year change of 44.42% / 59.14% / 31.35%, EPS was 0.38/0.61/0.80 yuan respectively, and the corresponding PE was 67x / 42x / 32x respectively. The company is a pure hybrid corn seed leader, deeply benefiting from the current cycle boom and maintaining the “buy” rating.
Risk tips
The launch of new products did not meet expectations; Product price fluctuation risk; Natural disasters affect seed production
