\u3000\u3 China Vanke Co.Ltd(000002) 041 Shandong Denghai Seeds Co.Ltd(002041) )
Event: the company released its annual report for 2021, with an operating revenue of 1.101 billion yuan, a year-on-year increase of 22.2%; The net profit attributable to the parent company was 233 million yuan, a year-on-year increase of 128.33%.
1. The company's corn seed sales revenue increased by 25% year-on-year, and the subsidiaries reversed losses and contributed profits
Since 2020, China's corn price has continued to rise, reaching a high of nearly 3000 yuan / ton in 2021, breaking the level of nearly 10 years. Farmers' enthusiasm for planting increased, and the demand for high-quality seeds was stronger than in previous years. The company's corn seed sales revenue increased by 25%, with a significant increase. The company's corn gross profit margin reached 38.15%, an increase of 8.61pct compared with 2020. Affected by the boom in grain prices, the sales of wheat seeds and rice seeds increased compared with the same period of last year. In addition, we judge that under the measures of strengthening the sales of high-quality varieties and strictly managing the stock sales ratio, the operation of the company's subsidiaries has improved. In 2020, the loss of the subsidiary Denghai pioneer reached 78.69 million yuan, and the profit in 2021 was 16.65 million yuan, which successfully turned the loss into profit; The net profits of Denghai Wuyue, Daoji and Huayu increased significantly. Looking forward to 2022, we believe that China's corn supply and demand continues to be tight, and due to external factors such as the Russian Ukrainian war, it is less likely that the supply and demand gap will be completely filled by imports. The corn price is expected to maintain a high position, and the company's corn seed sales are expected to continue to rise in both volume and price.
2. With the advent of the era of four locus approval, the company has strong variety competitiveness and is expected to benefit
In 2021, the office of the National Crop Variety Approval Committee organized the revision of the national maize and rice variety approval standards, stipulated that the number of heterotopic points of DNA fingerprint detection difference between maize varieties applied for approval and known varieties should be ≥ 4, and made higher requirements for yield and quality. The current scattered industry pattern is expected to be improved. Among the 55 maize inbred lines of "national outstanding contribution maize inbred lines", the maize inbred lines selected by Shandong Denghai Seeds Co.Ltd(002041) accounted for 15%. We believe that as the seed policy is further inclined to encourage and protect innovation, the head company that pays attention to R & D investment and has high-quality seeds is expected to develop rapidly, Shandong Denghai Seeds Co.Ltd(002041) with its leading variety competitiveness and variety reserve, it is expected to obtain a higher market share.
3. Genetically modified corn seeds are expected to land this year, and the company's reserves are leading
In January 2022, the Ministry of agriculture responded to the pilot industrialization of genetically modified soybeans and Maize in 2021, and proposed that the pilot progress is relatively good, the characteristics of genetically modified varieties are excellent, and the advantages of cost saving and efficiency increase are obvious - the control effect of genetically modified maize on Spodoptera meadowi can reach 95%, which is due to the low content of mycotoxin in maize grains. The company cooperates with Beijing Dabeinong Technology Group Co.Ltd(002385) in the field of genetically modified corn seeds in advance, with rich variety reserves. The company is expected to obtain the first mover advantage in the era of genetically modified corn.
Considering that the grain price is expected to continue to rise, the company's variety advantage is obvious, and the operation continues to improve, we raise the company's profit forecast: if we do not consider the large-scale amount of GM, we expect the company's revenue in 2022 / 23 / 24 to reach 1.784/25.77/3.444 billion yuan, with a year-on-year increase of 62% / 44% / 34% (the previous value is 1.621/2.008 billion yuan in 2022 / 2023); The net profit attributable to the parent company reached 358 / 458 / 589 million yuan, with a year-on-year increase of 54% / 28% / 29% (the previous value was 2022 / 2023, and the net profit was 271 / 340 million yuan). In addition, we believe that if GM corn is commercialized, the company is expected to gain a higher market share by virtue of the leading layout of GM corn seeds. Considering the high prosperity of the seed industry, the high growth of the company's performance and the leading layout of genetically modified corn seeds, we will continue to give a "buy" rating.
Risk tips: 1. Product price fluctuation; 2. Industry competition; 3. The launch of new products did not meet expectations.
