\u3000\u3 China Vanke Co.Ltd(000002) 299 Fujian Sunner Development Co.Ltd(002299) )
Core view
Event: the company recently released its annual report for 2021, with an annual operating revenue of 14.48 billion yuan, a year-on-year increase of + 5.3%; The net profit attributable to the parent company was 450 million yuan, a year-on-year increase of – 78.0%. In the fourth quarter alone, the company achieved an operating revenue of 4.01 billion yuan (+ 5.7%) and a net profit attributable to the parent company of 80 million yuan (- 66.1%).
Breeding increment and quality improvement, customer advantage contribution premium. In 2021, the company sold 1055400 tons of chicken (YoY + 7.9%), with an average price of 10599 yuan / ton. The company was deeply bound with key customers, and the average price of chicken was 582 yuan / ton higher than that of the industry; Affected by the price rise of raw materials, the full cost increased by 12.4% to 10320 yuan / ton. Taking advantage of the company’s self-developed variety “Shengze 901”, the company set the best breeding level in history in 2021, and the European index increased by more than 5% year-on-year. On the whole, the breeding business contributed 300 million profits.
The C-end channel structure is optimized, and the food sector continues to make efforts. The annual sales volume of meat products was 224600 tons (YoY + 17.1%), the average price of the food sector was 24960 yuan / ton (YoY + 0.5%), the income of the food subsidiary was 5.606 billion yuan (YoY + 17.7%), and the tax revenue at the C-end exceeded 1 billion yuan, accounting for more than 15% of the food revenue in 21 years from about 7% in 19 years. Among them, the growth of online and new retail business was particularly fast, and the proportion of sales at the C-end increased from less than 10% to more than 50%. In R & D, 58 products were transformed in 2021, with a year-on-year increase of 200%, and the sales of new products was 907 million. The compound growth rate from 2014 to 2021 was about 29%, of which the compound annual growth rate of new product sales of key customers was about 33.4%. Overall, food contributed 150 million profit.
Steady expansion of production capacity and continuous improvement of efficiency. In 2021, the company’s total investment reached 1.564 billion yuan. At present, the company’s white feather chicken breeding capacity has been close to 600 million feathers, and the total food deep-processing capacity built and under construction has exceeded 433200 tons, ranking first in China. According to the company’s “14th five year plan”, in the future, the company’s upstream broiler breeding capacity will be increased to 1 billion feathers, and the downstream food deep processing capacity will exceed 500000 tons, with sales of more than 13 billion. At the same time, the company systematically carried out fine management in various sections and links, implemented cost reduction and efficiency increase measures, and achieved a profit of about 280 million yuan from management improvement in the whole year after excluding market fluctuations, quantity growth and other changing factors.
Profit forecast and investment suggestions
Considering the high price of raw materials in the industry, we lowered the profit forecast of the company for 22-24 years, and estimated that the net profit attributable to the parent company for 22-24 years was 853 million yuan, 1590 million yuan and 1874 million yuan (the original forecast was 1002 million yuan and 1655 million yuan for 22-23 years), with a year-on-year increase of + 90.4%, + 86.3% and + 17.8% respectively. Using the segment valuation method, considering that the 22-year short-term performance of comparable companies may be greatly affected by disturbance factors, and referring to the 23-year valuation level of comparable companies, 14x and 24xpe are given to aquaculture and food respectively, with the target price of 21.26 yuan, maintaining the “buy” rating.
Risk tips: price fluctuation of chicken, price fluctuation of raw materials and occurrence of chicken epidemic.
