\u3000\u3 China Vanke Co.Ltd(000002) 041 Shandong Denghai Seeds Co.Ltd(002041) )
Event: the company released the annual report of 2021. In 2021, the company realized an operating revenue of 110727 million yuan, an increase of 22.20% over the same period of last year; The total profit was 239554100 yuan, an increase of 247.01% over the same period of last year; The net profit attributable to shareholders of listed companies was 232798800 yuan, an increase of 128.33% over the same period of last year.
Key investment points:
The planting industry is booming, and the business volume and price of the company rise together. The global epidemic disturbs the supply chain and promotes the commodity market represented by Shenzhen Agricultural Products Group Co.Ltd(000061) . Pig stocks on the demand side continued to be high, and feed and industrial demand further supported the prices of feed raw materials such as corn and wheat. The price of corn has increased significantly in recent years. The average price of corn in the whole year of 21 years was 275394 yuan / ton, up 30.4% from the average price in the whole year of 20 years. The prosperity of the corn market has boosted the willingness of farmers to grow grain, the demand for corn seeds has increased, and the seed price has risen. The average price of corn in the 22-year planting season was 28.62 yuan / kg, up 14.5% from the 20-year planting season, reaching a high point in recent five years Shandong Denghai Seeds Co.Ltd(002041) mainly deals in corn seeds, and mainly promotes corn hybrids such as Denghai and Xianyu series. In 2021, eight varieties including 478 and YE107 selected by the company were selected as "national outstanding contribution maize inbred lines", accounting for 14.55%. In the 21st year, the company realized the sales revenue of corn seeds of 978 million yuan, accounting for 88.89% of the overall revenue, with a year-on-year increase of 24.66%. In terms of volume, it increased by 9.43% year-on-year in 21 years, and the overall business volume and price rose simultaneously.
Biological breeding is commercialized, and the company cooperates in advance. In January, 2004, four regulations related to biological breeding, including the administrative measures for the safety evaluation of agricultural genetically modified organisms and the measures for the examination and approval of major crop varieties, officially came into force. The industrialized application of biological breeding is expected to be promoted continuously and orderly, and it is expected to be popularized in the year of 22 / 23 Shandong Denghai Seeds Co.Ltd(002041) in recent years, the research and experiment of genetically modified maize seeds have been actively carried out in strict accordance with relevant requirements. The company mainly carries out trait cooperation with Beijing Dabeinong Technology Group Co.Ltd(002385) to introduce the target gene of Beijing Dabeinong Technology Group Co.Ltd(002385) for excellent traits into the parents of Denghai maize, reserve dominant varieties and wait for formal implementation and promotion.
The volume and price rise together, hoping to continue, and the commercialization of biological breeding ushers in new opportunities. In terms of quantity, we expect that corn and other staple grains are expected to continue to be strong, and the demand for seeds will remain strong. In the past 21 years, the company's seed production increased by 103.16% year-on-year. In the year of 22, the company plans to continue to increase the seed production area in combination with the market and inventory situation. In terms of price, driven by cost and supply and demand, we believe that price increase is a high probability. In terms of cost, the global bulk market has promoted the rise of agricultural materials and labor costs related to planting. In 21 years, the comprehensive cost of the company's seed industry increased by 7.77% year-on-year. In terms of supply and demand, the corn seed inventory continued to be removed. In 2021, 2.72 million mu of hybrid maize seed production was implemented in China, which is still at a historical low compared with 20112017. Under the cultivation boom, the seed demand is expected to continue, and the fundamentals of seed supply and demand are supported. In addition, the commercial promotion of biological breeding is gradually approaching, the capacity of seed industry is expanded and the pattern is reshaped. The company has reserves of relevant varieties and is expected to seize historical opportunities.
Investment advice
The company is a leading enterprise in the corn seed industry. The prosperity of seed industry is rising, the commercialization of biological breeding is advancing in an orderly manner, and the company's performance is expected to continue its strong trend. We estimate that the net profit attributable to the parent company from 2022 to 2024 will be 309.60 million yuan, 466.34 million yuan and 470.12 million yuan respectively, and the EPS will be 0.35 yuan, 0.53 yuan and 0.53 yuan respectively. The corresponding PE will be 72.39, 48.06 and 47.68 times respectively, giving a "buy" rating.
