\u3000\u3 China Vanke Co.Ltd(000002) 385 Beijing Dabeinong Technology Group Co.Ltd(002385) )
Event: the company disclosed the annual report of 2021. In 2021, the company achieved a total operating revenue of RMB 31.328 billion, yoy + 37.32%, and a net profit attributable to the parent company of RMB -440 million, yoy-122.52%.
The feed scale expanded rapidly and continued to increase the market share. The company's feed scale continued to expand. In 21 years, the feed sales increased by 26.47% year-on-year to 5.8959 million tons, of which the pig feed sales increased by 39.76% year-on-year to 4.5756 million tons. The total sales revenue of feed was 22.695 billion yuan, yoy + 36.83%. Affected by the rise in the price of feed raw materials, the gross profit margin of the company's feed business fell 2.57pcts to 13.19%. The company continues to consolidate the core advantageous position of pig feed, front-end feed and high-end feed, and on this basis, actively expand the variety and differentiation of feed, make one policy for each province, and provide downstream technical services. In January and March 2022, the company successively acquired the equity of Hunan Jiuding technology and eight subsidiaries of Zhengbang in Southwest China, expanded the company's feed business layout in southwest and Hunan, and further laid out the southern market. Under the background of sluggish breeding and overall pressure on the profitability of the feed industry, the company, as a leading feed enterprise, continues to expand and continuously improve the company's share in the national feed market.
Breeding is under pressure in the short term, and the cost has improved steadily. In the past 21 years, the holding subsidiaries of the company achieved a total sales volume of 2.5115 million pigs, yoy + 129.04% (a total of 4.0378 million pigs, yoy + 132.80%) and a revenue of 4.699 billion yuan, yoy + 23.61%. Affected by the rapid decline in pig prices, the company's breeding business was under pressure, and the gross profit margin fell sharply by 58.89pcts to - 6.55%. Superimposed on the impairment of live pigs on hand, the breeding loss was large. The company continued to take measures to increase efficiency and reduce costs and eliminated inefficient sows. By the end of the year, the basic sows of the company's holding subsidiary had a stock of 110500, yoy-23.98%. As of December 21, the total cost of the company had decreased to 16 + yuan / kg, which was steadily improved compared with 18 + at the beginning of the year, and the cost had been at the medium and low level of the industry. The company continues to steadily develop the breeding business, scientifically utilize the existing breeding capacity, cultivate internal skills, improve the breeding level and reduce production costs. In the second half of the year, the company's full cost target was reduced to less than 16 yuan / kg. With the arrival of the inflection point of the future pig price, the company's breeding performance is expected to improve gradually.
The reserves of transgenic varieties are abundant, and the advantages of biological breeding continue to strengthen. The company has obvious first mover advantages in biological breeding in China. Up to now, four genetically modified maize varieties and one genetically modified soybean variety have obtained China's production and application safety certificate, ranking firmly at the leading level in China. The company actively developed its South American business. After the GM soybean varieties obtained the planting license from Argentina, the company continued to apply for the planting license from Uruguay and Brazil, and gradually accumulated the application experience of GM industrialization. The company has strengthened its first mover advantage in China in genetically modified corn and soybeans, strengthened R & D investment, and invested 668 million yuan in R & D in 21 years, yoy + 17.09%. It continues to promote the R & D of new generation technology of genetically modified corn, gene editing, drought resistance and other new gene mining, so as to prepare for the commercialization of genetically modified seeds in China, and is expected to open the company's long-term growth space in the future.
Profit forecast and investment rating of the company: the net profit attributable to the parent company from 2022 to 2024 is expected to be 299, 1868 and 2217 million yuan respectively, EPS is 0.07, 0.45 and 0.54 yuan, and PE value is 100.38, 16.08 and 13.54 times. We continue to be optimistic about the continuous expansion of the company's feed scale and the steady improvement of breeding costs. The genetically modified seed business is expected to open up the company's long-term growth space and maintain the "strongly recommended" rating.
Risk tips: fluctuations in pig prices, changes in raw material costs, the company's listing is not as expected, etc.
