\u3000\u3 China Vanke Co.Ltd(000002) 840 Zhejiang Huatong Meat Products Co.Ltd(002840) )
The performance of aquaculture business is outstanding, with excellent performance in volume, price and cost, and the overall data is better than that of the industry. The company's revenue in the first quarter of 2022 was 1.719 billion yuan, a year-on-year decrease of 35%; The net profit attributable to the parent company lost 87.89 million yuan, a year-on-year decrease of 213%; Net profit loss after deduction of non-profit was 102 million yuan, down 362% year-on-year. In addition, in 2022q1, the company's asset impairment loss was 28.54 million yuan (provision for inventory falling price). We expect the performance of 2022q1 to be split as follows: the operating loss of pig breeding is expected to be 70 million, the profit of slaughtering and meat products is close to 15 million, the government subsidy is close to 15 million, and the impairment loss is close to 30 million. We believe that the core focus of the company's first quarterly report lies in pig breeding: on the one hand, the number of pigs sold in the first quarter was close to 160000, the number of pigs sold maintained a significant increase, and the logic of cash volume; In terms of breeding cost, considering the cost amortization of factories that have just been converted to fixed assets but have not produced pigs, the actual breeding cost is close to 16-17 yuan / kg, and the breeding cost is better than that of most peer enterprises.
The production capacity is accelerated, and the quantity supplement price can pass through the cycle. By the end of the first quarter of 2022, the company's inventory had reached 650 million yuan, an increase of 24% over the beginning of the year; Productive biological assets reached 340 million yuan, an increase of 6% over the beginning of the year. According to the company's disclosure announcement, the company has launched the production capacity of pig breeding since the second half of 2021. At present, the number of sows that can be bred exceeds 100000. It is expected that the number of sows to be released from 2022 to 2023 will be 1.2 million and 2.6 million respectively, and the growth rate of release will continue to increase. Considering that the pig cycle is expected to reverse before 2023, the average market value of the company's head in 2023 is close to 2000 yuan / head, and there is enough space for valuation and repair.
The excess return of Zhejiang pigs is obvious, and the company's breeding high-quality assets are prominent. The company's breeding mode is self breeding and self raising building pig breeding, and the whole process breeding survival rate is close to 90%, which reflects the obvious advantages of building pig breeding. With the increase of breeding volume in 2022q1, the breeding cost is expected to decline significantly, which has been proved in the breeding cost of 22q1. In addition, according to the monthly report published by the company in March, the sales price of the company's commercial pigs is 13-14 yuan / kg; The sales price is significantly higher than muyuan's 11.64 yuan / kg and Wen's 12.17 yuan / kg, and the single head has obvious excess income. In addition, there are almost no farmers in Zhejiang, which belongs to a natural breeding epidemic free area and has natural advantages in the prevention and control of African classical swine fever and other diseases. Considering that the company is currently a scarce large-scale breeding listed company in Zhejiang Province, the company's pig production capacity should have a higher head average market value and sufficient valuation and repair space.
Risk tip: uncontrollable epidemic occurred in the breeding process, and the food price rose sharply, increasing the feed cost.
Investment suggestion: building breeding dark horse, maintain the "buy" rating. It is estimated that the net profit attributable to the parent company in 22-24 years will be RMB 40 / 14.64 / 2.952 billion, corresponding to the current share price PE of 169.1 / 4.6 / 2.3x.
