\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 975 Hunan New Wellful Co.Ltd(600975) )
Event:
On April 27, the company disclosed its 2021 annual report. In 2021, the company realized an operating revenue of 2.003 billion yuan, a year-on-year decrease of 26.47%, a net profit attributable to the parent company of – 280 million yuan, a year-on-year decrease of 199.13%, and a net profit not attributable to the parent company of – 279 million yuan, a year-on-year decrease of 200.53%.
Event comments:
The sharp decline in pig prices dragged down the company’s performance
In 2021, the company’s pig breeding business achieved a sales revenue of 870 million yuan, a year-on-year decrease of 34.49%. Among them, the domestic sales revenue of pigs was 706 million yuan, a year-on-year decrease of 38.91%, and the export sales revenue of pigs was 164 million yuan, a year-on-year decrease of 4.82%. The gross profit margin of pig breeding business was 2.55%, a year-on-year decrease of 25.50 percentage points. 441500 pigs were sold throughout the year, with a year-on-year increase of 34.19%. During the reporting period, the pig cycle was in a downward cycle, and the pig price decreased from 35.41 yuan / kg at the beginning of the year to 16.3 yuan / kg at the end of the year, a decrease of 53.97%. The sharp decline in pig prices led to pressure on the company’s revenue side, which dragged down the company’s performance.
Core assets increased significantly and pig production capacity increased rapidly
The company’s core assets show a trend of rapid growth. Productive biological assets were 476 million yuan, a year-on-year increase of 384.52%, and use right assets were 1.891 billion yuan, a year-on-year increase of 262.7%. Fixed assets and construction in progress increased by 10.72% and 109.33% respectively year-on-year. By the end of the 21st century, the company had 77 rental sites, an increase of 38 compared with 2020. Among them, 31 sow farms are leased, and the production capacity of sows is about 105000. 46 fattening farms are leased, and the production capacity of fat pigs is about 940000. The company expects to add about 100000 sows and 800000 fat pigs this year.
The acquisition of Tianxin seed industry has greatly increased the strength of pig breeding business
Hunan Tianxin Seed Industry Co., Ltd., formerly known as Changsha pig breeding farm, is the national pig core breeding farm. According to our previous research, Tianxin seed industry had more than 8000 Zeng Zu pigs and 18000 Zu Dai pigs at the end of last year. Theoretically, the number of binary sows that can be provided each year exceeds 200000. Once Tianxin seed industry is injected into the body, the company’s capacity bottleneck will be broken through, and the sales volume is expected to increase significantly next year.
Investment advice and profit forecast
We estimate that the operating revenue of the company from 2022 to 2024 will be 4.294 billion yuan, 8.930 billion yuan and 11.492 billion yuan respectively, the corresponding net profit attributable to the parent company will be -454 million yuan, 920 million yuan and 748 million yuan respectively, the EPS will be -0.56 yuan, 1.14 yuan and 0.93 yuan respectively, and the corresponding PE will be – 19x, 9x and 11x respectively. Maintain the “buy” rating.
Risk tips
Epidemic risk, abnormal fluctuation risk of pig price, rising breeding cost risk and food safety risk
