\u3000\u3 Shengda Resources Co.Ltd(000603) 363 Fujian Aonong Biological Technology Group Incorporation Limited(603363) )
Event: the company issued a suggestive announcement on the issuance of non-public offering shares. The company's summary report on the underwriting of non-public offering shares and relevant documents have been filed and approved by the CSRC. The company will go through the registration and custody procedures for the new shares issued this time as soon as possible. The total amount of funds raised in this issuance is 1.44 billion yuan. After deducting various issuance expenses, the actual net amount of funds raised is 1.43 billion yuan.
Supplement liquidity and help the company expand. Of the funds raised this time, 450 million was used for the project of self breeding and self breeding of 15000 sows, 50 million was used for the project with an annual output of 180000 tons of feed, and the remaining 940 million was used to supplement working capital. With the help of fixed increase funds, the company firmly promotes capacity expansion at the bottom of the cycle, replenishes liquidity, expands the company's scale and strength, and further improves the cash flow situation, so as to make the company's financial structure more stable and reduce financial risks. As of September 30, 2021, the consolidated asset liability ratio of the company is 79.96%. After the issuance, the total assets and net assets of the company will increase and the asset liability ratio will decrease accordingly.
It is worth looking forward to the release of pig production capacity. From January to March 2022, the company has sold 1047000 pigs, a year-on-year increase of 95.81%; There were 1.892 million pigs on hand, a year-on-year increase of 47.88%. According to the company's announcement in early March, the company has about 320000 sows on hand (breeding + reserve), and it is expected to deliver 400000 sows by the end of 22. The company's production capacity continues to expand, laying a solid foundation for future growth. According to the company's plan at the end of 2021, the marketing targets for 202224 are 6 million, 8 million and 10 million respectively, with a year-on-year increase of 85%, 33% and 25% respectively.
Gradually improve the cost and wait for the cycle to reverse. With the formation of the company's production capacity layout, the company's focus has changed from "quantity" to "quality". According to the company's announcement in early March, the average cost of weaned piglets has been reduced to less than 450 yuan / head, and the production cost of piglets will continue to decline in the future. The company's goal is to make the cost of weaned piglets gradually approach the average level of sow farms that have reached full production, that is, about 350 yuan / head. At the fattening end, the cost of self breeding and self fattening of the company decreased slightly compared with the end of last year. As the fattening work of the company is just beginning to enter the stage of comprehensive supporting, there is still much room for decline. The goal of the company is to make every effort to reduce the fattening cost to 16 yuan / kg.
Profit forecast and investment suggestions
The fixed increase is implemented, and we are optimistic about the long-term growth of the company. As part of the company's convertible bonds were converted into shares to increase its share capital, the profit forecast was adjusted synchronously. It is estimated that the net profit attributable to the parent company in 21-23 years will be -1176, -447 and 1.631 billion yuan respectively (the original forecast: - 1178, -453 and 1.625 billion yuan), with a year-on-year ratio of - 305.2%, + 62% and + 464.5% respectively. The valuation level of the comparable company referenced for the first coverage will be maintained, and the 23-year 11xpe will be given, the target price will be 25.85 yuan, and the "buy" rating will be given.
Risk tips: epidemic risk, pig price fluctuation risk, cash flow risk, raw material price fluctuation risk, food safety risk, etc.
