\u3000\u30 China Baoan Group Co.Ltd(000009) 98 Yuan Longping High-Tech Agriculture Co.Ltd(000998) )
The variety system continued to improve and commodity grain prices were booming, supporting the willingness to sow in the new season and maintaining the “buy” rating
In 2021, the company achieved a revenue of 3.503 billion yuan (+ 6.47%) and a net profit attributable to the parent company of 624474 million yuan (- 46.12%). During the reporting period, the company independently and jointly cultivated 88 rice, 50 corn and 1 new cotton variety to further consolidate the variety system. Due to the high inventory due to more seed production in the early stage, the amount of inventory falling price loss in the current period is large, which hinders the performance. In the follow-up, the performance will improve with the de inventory and the recovery of grain prices. In 2022, Q1’s profitability increased year-on-year, realizing a net profit attributable to the parent company of 544585 million yuan (+ 34.38%). Due to the dry weather in Longping, Brazil, the yield per mu of seed production did not meet the expectation and the cost of seed production increased. We lowered the pre forecast value, and expected the net profit attributable to the parent company in 20222024 to be 325 / 455 / 676 million yuan respectively (the pre forecast value was 469 / 564 million yuan in 2022 / 2023), EPS to be 0.25/0.35/0.51 yuan respectively, and the current share price corresponding to PE to be 64.4/46.0/30.9 times respectively. China’s commercial grain prices of rice and corn are booming and the commercialization of GM is imminent. Based on the advantages of GM breeding, the company is expected to benefit from it. It has strong planting intention in 2022 and maintains the “buy” rating.
Optimization and integration of rice business division, and the performance elasticity of commercial grain seeds in the new season can be expected
During the reporting period, the company’s rice seed revenue was 1.304 billion yuan (- 6.19%), and the proportion of independent rice varieties was further improved. The five industrial entities of the former Yahua seed industry, percent agriculture, Sichuan Longping, Xinqiao Longping and Youzhi seed industry were integrated into Yahua rice business department, and the level of internal coordination was improved. Corn seeds achieved a revenue of 1.015 billion yuan (+ 2.74%), and the coverage of new varieties was further expanded and sold to more than 90% of the corn planting areas in China. China’s commodity grain prices are booming, and the elasticity of seed performance in the new season of 2022 is expected. The comprehensive agricultural service and other seed business realized a revenue of 632 million yuan, with a year-on-year increase of 62.42%. Under the integrated service mode, the profit space gradually thickened.
The innovation advantage has been continuously improved, and the research and development of biological breeding has been promoted in an orderly manner
The company remains a leader in the field of biological breeding. Hangzhou Ruifeng transgenic maize varieties Ruifeng 125 and Ruifeng 8, the joint-stock companies, have obtained the production and application safety certificate. Q1 company completed the capital increase of its equity from 22.97% to 23.20% in 2022. The company has made a phased breakthrough in the research and development of transgenic insect resistant and herbicide resistant maize, and the leading maize varieties Yufeng 303 have completed the preparations for industrialization. The biotechnology sector has formed the leading position of Hangzhou Ruifeng Longping is a front-end R & D pioneer keeping pace with Hainan, and is the main force of back-end variety transfer based on corn Academy of Sciences and Lianchuang seed industry.
Risk tip: the global epidemic situation is repeated, the rise of seed price suppresses planting sentiment, and the cost of seed production increases.
