\u3000\u30 Beijing Telesound Electronics Co.Ltd(003004) 98 Wens Foodstuff Group Co.Ltd(300498) )
Performance summary: in the first quarter of 2022, the company achieved an operating revenue of 14.59 billion yuan, a year-on-year decrease of 13.3%, and the net profit attributable to the parent was -3.76 billion yuan, a year-on-year decrease of 792.4%. After deduction, the net profit attributable to the parent was -3.6 billion yuan, a year-on-year decrease of 767.8%.
Comments: the company’s revenue and profit fell year-on-year in the first quarter, mainly due to the low price of pigs and the continuous loss of pig breeding industry. In the first quarter, the company sold 4.024 million pigs, a year-on-year increase of 91.9%, and achieved a sales revenue of 6.15 billion yuan, a year-on-year decrease of 19%. In the first quarter, the company sold 230 million commercial chickens, basically the same as Q1 in 21 years, and achieved a sales revenue of 6.635 billion yuan, a year-on-year increase of 0.9%. Based on the principle of prudence, the company made a provision for asset impairment of 1 billion yuan in the current period, mainly to make a provision for the decline in the price of pig inventory and increase the cost of a single quarter. If this influencing factor is excluded, the loss in the first quarter will be 2.76 billion yuan.
Yellow feather chicken breeding has developed steadily. According to the data of China Animal Husbandry Association, at the end of 2021, there were 40.472 million sets of yellow feather chicken parents’ stock, a year-on-year decrease of 6%. At present, the stock has been at a relatively low level for nearly four years, which has a certain supporting effect on the price. Yellow feather chicken breeding was still in general loss in 21 years, and the industry’s capacity reduction has achieved initial results since the fourth quarter of 21 years. On the other hand, in July 2020, relevant departments said that they would restrict the trading and slaughter of live birds Encourage qualified places to promote the centralized slaughter of live birds, gradually abolish the live bird trading market, add factors such as high feed cost, accelerate the withdrawal of retail investors from the market, steadily expand the scale field and continuously improve the market share. In 2021, the company sold 1.101 billion broilers (including wool chicken, fresh and cooked food), accounting for about 11% of the total sales of yellow feather chicken and white feather chicken in China, ranking first among Listed Companies in the same industry. Moreover, the company pays attention to R & D and innovation, has a professional chicken breeding company, and has established a yellow feather chicken breeding base with leading scale and reasonable structure in the industry. It is one of the units with the most high-quality chicken genetic resources in China. In view of the restrictions on the trading and transportation of live poultry, the company continued to promote the transformation and upgrading of the poultry industry, and increased the development of poultry slaughter and prefabricated vegetable business. In 21 years, the company sold 150 million fresh chickens, with a year-on-year increase of 18.33%. The company’s cumulative capacity of broiler slaughter reached 285 million / year, and 16889 tons of prefabricated vegetable products were sold in the whole year.
The company’s profitability is gradually restored and its future performance is expected to grow. The outbreak of African swine fever in 2018 had a great impact on pig breeding in China. The pig price reached 41 yuan / kg around November 2019, a record high. After that, the price has been falling continuously since 2021, reaching 11 yuan / kg around October, and the price of live pigs has been about 14 yuan / kg recently; In the medium term, the supply of pork is guaranteed, and the price of live pigs will still be low. From the perspective of breeding sows, the trend of capacity removal is obvious, and it still takes time to clear. In the elimination process, the backward production capacity will be eliminated first, so as to form a structural adjustment. Comprehensively consider the development of production efficiency indicators such as psy of fertile sows, which have been improved compared with the past. The impact of non swine fever on the company’s pig breeding business is mainly reflected in three aspects: structure, slaughter volume and breeding cost: affected by African swine fever virus, the company eliminated some sows threatened by the virus and responded by purchasing piglets for fattening sales. In 2020, the productive biological assets of the balance sheet showed that the amount of outsourcing reached 5.19 billion yuan, a year-on-year increase of 117 times, and the proportion of outsourcing accounted for about 36%. The epidemic prevention ability of the company has been improved, the proportion of high-efficiency breeding sows has increased, the number of high-quality breeding sows in 21 years is 1-1.1 million, the structure has been optimized, and the outsourcing of piglets has been stopped in May 2021. The number of pigs sold by the company has rebounded steadily. The number of pigs sold by the company in 2020 and 2021 was 9.55 million and 13.217 million respectively. The company has gradually recovered from the impact of non plague, and the pigs sold by the company are mainly fattened by self-produced pig seedlings after the third quarter of 21. On the breeding cost side, the company’s total cost was higher due to outsourcing piglets, epidemic prevention expenses and other reasons. Later, the company made efforts to control and gradually reduce, superimposed the growth of slaughter volume, and the elasticity of profit level increased greatly. The company grasped the development trend of the industry, coordinated growth of multiple products, and further expanded the market share.
Profit forecast and investment suggestions. It is estimated that the EPS from 2022 to 2024 will be -0.25 yuan, 1.66 yuan and 2.68 yuan respectively, corresponding to 12 / 7 times of dynamic PE from 2023 to 2024, maintaining the “buy” rating.
Risk warning: there is an epidemic in the downstream aquaculture industry; The product sales were not as good as expected.
