\u3000\u3 China Vanke Co.Ltd(000002) 1 Shenzhen Kaifa Technology Co.Ltd(000021) 00)
Event: the company disclosed the annual report of 2021. In 2021, the company realized a total operating revenue of 15.744 billion yuan, yoy + 31.35%, and the net profit attributable to the parent company was -686 million yuan, yoy-139.87%.
The decline of pig prices dragged down short-term performance, and the breeding expansion and food side layout were carried out steadily. The company has sold 1.6033 million pigs in 21 years, yoy + 19.20%. Affected by the rapid decline of pig prices, the revenue of the company’s pig breeding and food processing business increased by only 0.52% to 3.495 billion yuan year-on-year. At the same time, the gross profit margin of the breeding and food business also fell sharply by 66.26pcts to – 9.64%, adding to the company’s provision for inventory falling price of 385 million yuan (including 188 million for breeding and 197 million for meat products), which dragged down the company’s short-term performance. Based on the natural breeding location advantages of Xinjiang, the company actively carried out breeding efficiency and cost reduction measures from the aspects of improving production capacity utilization, eliminating inefficient sows, reducing dead Amoy, strengthening epidemic prevention and control and feed cost reduction, and actively planned production capacity expansion. By the end of the 21st century, the company could breed 120000 sows, with a target of 2.2 million in 22 years. The company’s production capacity layout has gradually expanded from Xinjiang to Gansu and Henan provinces, and the total production capacity is expected to reach more than 3 million. In the long term, it is also planned to carry out further breeding layout in Sichuan and Chongqing. With the continuous expansion of the company’s breeding scale, it is expected to become a regional leading breeding enterprise in the future. In addition, the long-term layout of the company’s food end is also gradually promoted, and the integrated development of the industrial chain is expected to provide a strong driving force for the company’s future development.
Other businesses continue to advance, and multiple sectors promote long-term development. The company continued to carry out multi field layout around the breeding industry chain. In terms of feed, the company’s feed sales in the past 21 years were 2.3125 million tons, yoy + 21.08%. Although the price of feed raw materials increased, the company’s gross profit margin of feed business increased by 0.34 PCTs to 13.35% based on its raw material advantages of corn collection and storage. The company continued to optimize the operating efficiency of the feed sector, implemented the full cost leadership strategy, and further strengthened the competitiveness of the feed business. From the perspective of extension, based on the Xinjiang market, the company focuses on expanding the Northwest market, the feed scale continues to expand steadily, and the regional market share continues to increase. In terms of animal protection, the company’s vaccine sales increased by 2.35% year-on-year in 21 years, benefiting from the construction and vigorous promotion of the company’s market vaccine channels in recent years, especially the continuous introduction of star products classical swine fever E2, brucellosis genetic engineering vaccine and porcine diarrhea vaccine. The proportion of market vaccine sales continued to increase, driving the steady growth of vaccine sales unit price. In the past 21 years, the gross profit margin of the company’s pharmaceutical business increased by 0.88pcts to 68.38% year-on-year. The company has the strong strength of animal protection R & D platform represented by P3 laboratory. Large single products such as Yuanzhi Erlian have successively entered the registration stage of new veterinary drugs. In the future, it is expected to further expand the company’s animal protection product matrix and continue to strengthen the company’s competitiveness of animal protection. Under the comprehensive action of multiple sectors, it is expected to continue to promote the long-term development of the company.
Profit forecast and investment rating of the company: it is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 278, 2285 and 2263 million yuan respectively, EPS will be 0.21, 1.69 and 1.67 yuan, and the PE value from 22 to 24 will be 44.11, 5.36 and 5.41 times. The company has formed a complete pig industry chain of feed animal protection, breeding, slaughtering and processing. Under the joint action of all sectors, it is expected to gradually develop into an integrated regional leader. Maintain a “recommended” rating.
Risk tips: fluctuations in pig prices, the expansion of the company’s pig production capacity is less than expected, etc
