\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 195 China Animal Husbandry Industry Co.Ltd(600195) )
Key investment points
Performance summary: in 2022, Q1 company achieved an operating revenue of 1.12 billion yuan, a year-on-year decrease of 12.9%, and a net profit of 130 million yuan, a year-on-year decrease of 16.2%.
Comments: the decline in Q1 revenue of the company is mainly due to the fact that the overall breeding industry is still in a state of extreme deep loss. The average loss of a single head in the first quarter of self breeding and self breeding is still more than 500 yuan, which has a certain suppression on the demand for non key products of animal insurance, and the decline in the price of API in the first quarter has a certain impact on the revenue of the chemical medicine sector. However, from the profit side, the main reason for the decline of the company in the first quarter is that the profit of Xiamen Kingdomway Group Company(002626) decreased significantly in the same period. If the investment income related to Xiamen Kingdomway Group Company(002626) is excluded, the main profit of the company will increase by about 13.7%. In the environment of 30% + decline in the overall market demand of animal health insurance, the company achieved 10% + profit growth against the trend. The main reasons are as follows: 1) actively expand the product side, continue to vigorously promote the marketization of vaccine products, realize double-digit growth of vaccine market products in the first quarter, and continue to expand pharmaceutical products with high gross profit and high R & D barrier, driving the stable increase of the company's gross profit margin; 2) The company strengthened cost control, and during the reporting period, the company's sales expenses decreased by 34.8% year-on-year, showing the advantages of high-quality group cooperative customers. The company has made steady progress in various reforms. At present, it has achieved initial results in management efficiency. In the future, the overall company system and future development strategy may be gradually implemented to drive the rapid growth of the company's performance.
The average profitability of the pig breeding industry shows a repair trend, and the demand for animal protection products is expected to increase. In the third quarter of 2021, the pig price rebounded after falling to the lowest point. At present, the pig price is about 14.5 yuan / kg, which is still in the bottom consolidation stage. However, the overall price is expected to pick up in the future, and the demand for animal insurance will increase accordingly. The special feature of this cycle is that African swine fever, prohibition and resistance and other events have widened the range of breeding costs, and the cost gap between different breeding subjects can reach 10 yuan / kg. We believe that the core influencing factor of the demand of the animal protection industry is the one-time impact of African swine fever, which has been transformed into the restoration of the profitability of breeding enterprises in the short term. With the structural adjustment of fertile sows, the proportion of high-quality sows increased, the dead Amoy rate decreased, the healthy litter rate, Psy and other indicators increased, the overall pig breeding cost showed a marginal improvement trend, and the research and development of non plague vaccine was steadily promoted. The development of African classical swine fever vaccine continues to advance. With the variation of classical swine fever virus, its toxicity gradually weakens and its infectivity increases. The subunit inactivated vaccine is weaker. Although the vaccine is less effective, it has higher safety, so it is more likely to be popularized. If it is successfully marketed in the future, the industry's attention and growth will be further improved.
In the future, the company will gradually realize the two wheel drive of medicine and seedling, gradually release the new production capacity, continuously optimize the customer structure, and further improve the market share. In terms of vaccines, the policy of "first and last" will be steadily promoted. In 2025, the market vaccine of compulsory immunization epidemic disease will fully replace the vaccine collected by the government. The proportion of the company's market-oriented structure will continue to increase in the future. The core product Oubeijia is foot-and-mouth disease type O and type a bivalent inactivated vaccines. The market feedback is good. In the future, with the continuous improvement of capacity utilization, the new capacity will be released after the construction of phase II project of Lanzhou new plant, and the sales volume will usher in growth. In addition, the penetration improvement of large single products drives the comprehensive layout of multiple products, including vaccines and combined vaccines for swine fever, pig ring, pseudorabies and other diseases, and the product combination improves the competitive advantage. From the perspective of chemical medicine, in the context of the implementation of the new GMP, combined with the strategy of downstream breeding enterprises to control risks and reduce suppliers of animal protection products, the company has successively issued announcements in the chemical medicine industry for 22 years. The company will jointly establish chemical medicine subsidiaries with Nanyang pharmaceutical and muyuan and increase the holdings of Huanong assets. We believe that the most efficient breeding enterprises represented by muyuan have continuously increased their demand and attention to chemical drugs. The foundation of the company's Nanjing veterinary biomedical industrial park project was successfully laid, and the Inner Mongolia Zhongmu macrolide innovation driven industrial quality improvement and upgrading project was launched. Shengli biology obtained the export certification of the US FDA, indicating that the product quality of the company's tavancomycin is recognized by the world. It is expected that the company's chemical sector will show a rapid upward trend in the next 3-5 years.
Profit forecast and investment suggestions. It is estimated that the EPS from 2022 to 2024 will be 0.72 yuan, 0.92 yuan and 1.08 yuan respectively, and the corresponding dynamic PE will be 15 / 11 / 10 times respectively, maintaining the "buy" rating.
Risk tip: capacity expansion is less than expected; The product sales situation is less than expected; Breeding industry outbreak, etc.
