\u3000\u30 China High-Speed Railway Technology Co.Ltd(000008) 76 New Hope Liuhe Co.Ltd(000876) )
Core view
The operation of the company's pig business resumed quarter by quarter, and the performance of 2021 and 2022q1 was under pressure due to the bottom of pig price. In 2021, the company achieved an operating revenue of 126262 billion yuan, a year-on-year increase of + 14.97%, and a net profit attributable to the parent company of -9.591 billion yuan, a year-on-year increase of -293.98%. In 2022q1, due to the sharp decline of pig price after the Spring Festival, the company's performance was further under pressure, with a year-on-year revenue of + 0.91% to 29.506 billion yuan and a year-on-year net profit attributable to the parent of - 220450% to - 2.879 billion yuan. We expect the performance of 2022q1 to be split as follows: the net profit of feed business is about 100 million yuan, the loss of poultry industry is nearly 110 million yuan, the loss of pig industry is about 3 billion yuan, the profit of food business is about 30 million yuan, other and headquarters expenses are about 330 million yuan, and the profit of subsidiary China Minsheng Banking Corp.Ltd(600016) is about 430 million yuan.
The production capacity of pigs has increased steadily, and the cost is expected to continue the downward trend. Pig breeding is the core factor affecting the company's profit fluctuation. We believe that the operation of the company's pig sector is in the process of steady recovery: in terms of marketing, the number of pigs sold by the company in 2022q1 increased by 61.88% year-on-year to 3.6968 million. It is expected that 13-18 million pigs will be sold in 2022 and about 20 million pigs will be sold in 2023, which is expected to continue the growth trend. The company has sufficient capacity reserves. By the end of December 2021, the company has nearly 1 million breeding sows and nearly 400000 reserve sows; At present, the scale of leasing and self-cultivation fertilizer of the company has reached 7.36 million; The capacity of sow farms that have been put into operation, transformation or new construction has reached 1.66 million, which is enough to meet the needs of pig business development in the next two years. The improvement trend of the company's cost is also obvious. By the end of 2021, the total cost of breeding and fattening pigs has been reduced to 17.9 yuan / kg (excluding headquarters expenses), and the company's target breeding full cost is expected to continue to decrease to 16 yuan / kg from June to July 2022.
The leading position of feed is stable, and the food business is expected to contribute new profit growth points. Benefiting from the high stock of livestock and poultry, the company's feed business achieved a simultaneous rise in volume. In 2021, the parent company's profit reached 1.57 billion, a year-on-year increase of 17%, showing a bright performance. On the one hand, in 2021, the sales volume of the company's feed products reached 28.24 million tons, with a year-on-year increase of 18%, which was higher than the growth rate of the national total feed sales of 16%, and the market share of the company's feed industry continued to increase to 9.6%. On the other hand, the company developed a feed formula system with independent intellectual property rights in the first half of 2021 and put it into trial operation in early August. It can quickly and flexibly adjust the formula when the price of raw materials fluctuates, effectively coping with the pressure of sharp rise in the price of feed raw materials. In addition, the company's food business is also booming. In 2021, the net profit attributable to the parent company reached 130 million yuan, breaking through the profit scale of 100 million yuan for the first time. Among them, several star single products achieved breakthroughs, including the sales revenue of small crispy meat single products of nearly 1 billion yuan, and there are two 500 million yuan products, one 100 million yuan products and three 50 million yuan products. The product matrix is gradually complete and is expected to continue to maintain rapid growth.
Risk tip: uncontrollable epidemic occurred in the breeding process, and the food price rose sharply, increasing the feed cost.
Investment suggestion: for the first time, give a "buy" rating. The company is a leading enterprise in the agricultural and animal husbandry industry chain. In 2021, the number of pigs sold ranked fifth in the country. In the future, the number of pigs sold is expected to continue to grow, and the cost is expected to continue to improve, or it will benefit from the increase in both quantity and price caused by the reversal of the pig cycle in 2023. It is estimated that the net profit attributable to the parent company in 22-24 years will be -39.71/59.77/13.989 billion yuan, corresponding to the current share price PE of -15.9/10.6/4.5 X
