\u3000\u30 China High-Speed Railway Technology Co.Ltd(000008) 95 Henan Shuanghui Investment & Development Co.Ltd(000895) )
Event: the company released the first quarterly report of 2022, achieving an operating revenue of 13.762 billion yuan, a year-on-year decrease of – 24.73%, a net profit attributable to the parent of 1.46 billion yuan, a year-on-year increase of 1.34%, and a net profit deducted from non attributable to the parent of 1.369 billion yuan, a year-on-year increase of 5.69%.
The high profit base of imported meat in the same period affected the overall profit, and the profit of fresh products increased rapidly. In the first quarter, the company realized an operating revenue of 13.762 billion yuan, a year-on-year decrease of – 24.73%. The year-on-year decrease of the company’s revenue was mainly due to the sharp decline of pig price in the first quarter. The average pig price in the first quarter was 14.02 yuan / kg, a year-on-year decrease of 56.1%. The slaughtering business realized a revenue of 6.881 billion yuan, a year-on-year decrease of – 37.10%. The slaughtering volume increased, but the import volume decreased, and the sales volume increased by. From the profit side, due to the high profit base of imported and domestic frozen meat last year, which affected the overall profit, the slaughtering business realized an operating profit of 134 million yuan, a year-on-year decrease of 58%. However, under the continuous decline of pig price, the profit of the company’s fresh products increased rapidly compared with the same period last year. In the short term, pig prices still showed a downward trend in the second quarter, and the base was relatively low in the same period last year. The slaughtering sector is expected to achieve both volume and profit growth.
Affected by the epidemic, the sales volume of meat products decreased to a certain extent, and the profit per ton reached a new high. In 2022, Q1’s meat products business achieved a revenue of 6.797 billion, a year-on-year decrease of – 4.94%, and the sales volume / ton price decreased by 2.5% respectively. We believe that the decline in the revenue of meat products is mainly due to the repeated epidemic in the first quarter, and the stricter epidemic prevention and control in some regions, affecting logistics, transportation and marketing. From the profit side, benefiting from the low cost of raw materials, the operating profit margin of meat products in the first quarter was 25.76%, with a year-on-year increase of 5.67pct, and the profit per ton was 454923 yuan, with a year-on-year increase of + 25%, a record high. Looking forward to the whole year, the company’s meat products business is expected to return to normal growth under the slowdown of the epidemic. At the same time, under the condition of low pig prices, we expect the annual ton profit to remain at a high level of more than 4000 yuan as a whole.
Benefiting from the decline in pig prices, profitability has improved significantly. In the first quarter, the company realized a net profit attributable to the parent company of 1.46 billion yuan, a year-on-year increase of 1.34%. The gross profit margin of the company in the first quarter was 18.96%, an increase of 2.7pcts over the same period last year. The Q1 sales / management / R & D expense ratio of the company was 3.1% / 1.89% / 0.28% respectively, with a year-on-year increase of -0.64 / + 0.23 / + 0.15pct, and the sales expense ratio improved year-on-year. The company achieved a net interest rate of 10.72% in Q1, with a year-on-year increase of 2.78pcts.
Looking forward to 2022, China’s pig production capacity will recover. It is expected that the pig price will be low before and high after, showing a downward trend as a whole. The continuous reduction of pig price in the first half of the year will help the company expand the scale of slaughtering business and reduce the cost of meat products business. The pig price may increase in the second half of the year, which will help the company release profits from domestic and imported frozen meat. On the whole, the slaughtering business is expected to achieve both volume and profit growth, and the meat products business is expected to achieve sales growth while maintaining a high profit margin. In the long run, the company adheres to the adjustment of meat product structure, continuously improves the national industrial layout and continues to expand channels. By the end of 2021, the company had 18947 dealers, a net increase of 1592 compared with the beginning of the year. The meat product sector is expected to realize the continuous upgrading of product structure while the sales volume increases steadily.
Profit forecast: the company is expected to achieve revenue of 72.7/82.4/90.7 billion yuan in 22-24 years, with a year-on-year increase of 8.87% / 13.35% / 10.08%, net profit of 6.320/72.50/7.988 billion yuan, with a year-on-year increase of 29.88% / 14.73% / 10.17%, and EPS of 1.82/2.09/2.31 yuan respectively, maintaining the “buy” rating of the company.
Risk warning: macroeconomic downside risk; Covid-19 epidemic risk; Risk of rising costs
