\u3000\u3 China Vanke Co.Ltd(000002) 385 Beijing Dabeinong Technology Group Co.Ltd(002385) )
Event: 1) the company released its 2021 annual report, and the company’s operating revenue was 31.328 billion yuan, a year-on-year increase of 37.32%; The net profit attributable to the parent company lost 440 million yuan from profit to loss. 2) Beijing Chuang Seed Technology Co., Ltd., the holding subsidiary of the company, plans to acquire 51% equity of Yunnan Datian Seed Industry Co., Ltd. The feed business is growing steadily, the basic sector is solid, and the endogenous extension enhances the feed competitiveness!
The company’s feed sales revenue was 22.695 billion yuan, a year-on-year increase of 36.83%, accounting for 72.44% of the main business revenue, and the profit of feed business increased year-on-year. The sales volume of feed was 5.8959 million tons (a year-on-year increase of 26.47%), setting a record for the company’s feed sales. In terms of breakdown, the company has 4575600 tons of pig feed (year-on-year + 39.76%), 425100 tons of aquatic feed (- 1.46%), 574500 tons of ruminant feed (+ 21.44%), and 308400 tons of poultry feed (- 34.97%) in 2021. In January 2022, the company announced that it planned to acquire 30% equity of Jiuding technology; In February 2022, the company issued another announcement to acquire 8 subsidiaries of Zhengbang (equivalent to all feed businesses of Zhengbang in the southwest market). The company said that the medium and long-term target of the market share of the feed sector is 20% – 30%. The feed business of the company is expected to continue to strengthen through internal management, sales promotion and extension integration, and the strength of Beijing Dabeinong Technology Group Co.Ltd(002385) feed sector will be greatly enhanced.
The decline of pig price has dragged down the company’s profits, and the pig price is expected to reverse in 2022
In 2021, the number of live pigs sold by the company’s holding subsidiary was 2511500, with a year-on-year increase of 129.04%; The sales revenue of live pigs was 4.699 billion yuan, a year-on-year increase of 23.61%. Since Q4 of 2021, the pig price has ushered in a cold winter, affecting the company’s pig breeding profit, and the gross profit margin of the company’s pig breeding business has decreased significantly. The company has made provision for impairment of assets for pigs on hand, resulting in losses in pig raising business. We believe that in the first half of 2022, due to the continuous downturn of pig price, the company’s pig breeding business may still face performance pressure, but the pig price is expected to pick up in the second half of 2022. At the same time, the company’s pig breeding cost control is strengthened, and the loss of pig breeding is expected to be significantly reduced.
Transgenic technology is leading in China, and the accumulation of germplasm resources continues to increase. It is expected to seize the opportunity of seed industry reform! China attaches great importance to the research and commercial promotion of transgenic technology. Transgenic technology can solve the bottleneck problem of maize and soybean varieties in China, and is the development direction of maize and soybean breeding technology in China. The company has accumulated more than ten years in the field of transgenic, and its R & D strength is at the leading level in China. It has obtained the safety certificate of transgenic maize varieties and has a significant first mover advantage. The company has four safety certificates for genetically modified corn seeds, including dbn9858, dbn9936, dbn9501 and dbn3601t. In 2021, the company passed the proposal on transferring equity to Beijing Chuang Seed Technology Co., Ltd., accelerating the integration of the company’s seed industry assets. In order to promote the strategy of strategic M & A and resource storage of corn seed industry, the company plans to acquire 51% equity of Yunnan Datian Seed Industry Co., Ltd., with a revenue of 135 million yuan and a net profit of 12.06 million yuan in 2021. We believe that the company’s seed business is developing rapidly and is expected to seize the opportunity of seed industry reform and become a leading seed company in China!
Profit forecast and investment suggestions:
Considering the factors such as the expected low price of pigs in the first half of 2022 and the accelerated volume of the company’s seed business in 2023, we adjust the company’s profit forecast. We expect the company’s EPS to be -0.05, 0.8 and 0.97 yuan / share in 20222024 (the value before 20222023 is 0.3 and 0.52 yuan / share), corresponding to 8.63 and 7.07 times of PE in 20232024. The company’s feed business continues to expand and its transgenic technology is leading, so it continues to give the company a “buy” rating.
Risk warning: epidemic risk; Price fluctuation; Risk of policy change; Failure to meet expectations; GM business promotion is blocked.
