\u3000\u3 China Vanke Co.Ltd(000002) 041 Shandong Denghai Seeds Co.Ltd(002041) )
Key investment points
Performance summary: the company achieved an operating revenue of 340 million yuan in Q1 of 22 years, with a year-on-year increase of 45.8%. The net profit attributable to the parent company was 100 million yuan, with a year-on-year increase of 76.9%. The net profit attributable to the parent company after deduction was 87.18 million yuan, with a year-on-year increase of 90%.
Comments: the company’s sales volume increased year-on-year. The inventory decreased by 30.3% compared with the beginning of the period, mainly due to the increase of sales volume and the improvement of corn planting prosperity. In 2021, the annual corn planting area was 43.32 million hectares, with a year-on-year increase of 5%, the annual corn output was 270 million tons, with a year-on-year increase of 4.5%, and the imported corn was 28.35 million tons, with a year-on-year increase of 152.2%. At present, the spot price of corn is 2859.9 yuan / ton, the spot price of soybean meal is 4376 yuan / ton, and the spot price of wheat is 3285.6 yuan / ton. The grain prices are at a high level, and the planting prosperity is high.
There is still a gap between supply and demand of corn, and the conflict between climate and geography makes the food price high. The planting enthusiasm is expected to remain high in the future, and the company’s planting business is developing steadily. The cancellation of the temporary storage policy in 2016 and the subsequent policies related to the reduction of corn planting area have successfully promoted the de stocking of corn. As of 2020, the corn planting area was 41.26 million hectares, a decrease of 3.71 million hectares compared with the peak in 2015, a decrease of 8.3%, which is now gradually restored. From the demand side, the demand for corn as feed raw material will increase with the downstream aquaculture. Moreover, due to the geographical conflict between Russia and Ukraine, climate impact and other factors, global food prices may remain high. As a leading seed production enterprise, the company is expected to give full play to its own advantages and improve its market share. The company is the first pilot enterprise to implement the “integration of breeding, propagation and promotion”, which is an important embodiment of the strong market competitiveness and comprehensive strength of seed enterprises. Since Denghai 605 and Denghai 618 were approved to enter the market, they have performed well in disease resistance, high yield, lodging resistance, early maturity and other characteristics, and have been welcomed by the broad masses of farmers, Annual sales are growing. In the fierce competition with a large number of approved varieties of corn seeds, the company seized the opportunity of the recovery of commodity corn price and corn seed demand to increase sales. In 2021, the revenue of corn seeds was 980 million yuan, with a year-on-year increase of 24.7%, accounting for 88.9%, the gross profit margin was 38.2%, with a year-on-year increase of 8.6 percentage points, and the revenue of wheat seeds was 60 million yuan, with a year-on-year increase of 4.4%, accounting for 5.5%. In addition, the profitability of subsidiaries has been greatly improved. The net profit of Denghai pioneer is 16.654 million, that of Denghai Wuyue is 3.56 million, and that of Denghai Daoji is 5.957 million.
The standardization of seed industry development will be enhanced, the growth environment of enterprises with excellent R & D strength will be optimized, and the work related to transgenic will be gradually promoted. If commercialization is successful, it will bring increment. In 2021, the No. 1 central document issued by the Central Committee and the State Council clearly put forward the importance of food security and seed security; The action plan for revitalizing the seed industry, which was considered and adopted at the 20th meeting of the Central Commission for comprehensively deepening reform in July, is another important deployment for the development of the seed industry after the introduction of the decision on strengthening seed work in 1962. The meeting pointed out that the development of the seed industry is still not solid and it is more urgent than ever to ensure the independent and controllable seed sources; In order to implement the relevant requirements of the No. 1 central document, the office of the National Crop Variety Approval Committee organized to revise the national maize and rice variety approval standards, so as to better encourage R & D and breeding; The company has rich experience in breeding and has adhered to it for a long time. It has been included in the key laboratories of the state and the Ministry of agriculture, and has successively won 25 national, provincial and ministerial awards, such as the first prize of national Spark, the first prize of national scientific and technological progress, and the first prize of scientific and technological progress of Shandong Province. In January 22, the Ministry of agriculture and rural areas decided to amend some provisions of the four regulations of the administrative measures for the safety evaluation of agricultural genetically modified organisms, the administrative measures for the approval of major crop varieties, the administrative measures for the production and operation license of crop seeds and the provisions on the naming of agricultural plant varieties. In view of the further standardization of genetically modified management, if industrialization will bring market increment, the company actively carries out cooperation and technical reserves, and has a first mover advantage.
Profit forecast and investment suggestions. It is estimated that the EPS from 2022 to 2024 will be 0.34 yuan, 0.46 yuan and 0.60 yuan respectively, and the corresponding dynamic PE will be 63 / 47 / 36 times respectively, maintaining the “hold” rating.
Risk warning: sudden natural disasters; The product sales were not as good as expected.
