\u3000\u3 China Vanke Co.Ltd(000002) 714 Muyuan Foods Co.Ltd(002714) )
Event:
On April 30, the company disclosed its 2021 annual report and the first quarterly report of 2022. In 2021, the company achieved an operating revenue of 78.89 billion yuan, a year-on-year increase of 40.2%, and a net profit attributable to the parent company of 6.094 billion yuan, a year-on-year decrease of 74.9%. In the first quarter of 2022, the operating revenue was 18.278 billion yuan, a year-on-year decrease of 9.3%, and the net profit attributable to the parent company was -5.18 billion yuan, a year-on-year decrease of 174.4%.
Event comments:
The downward superposition of pig prices and rising costs put pressure on the company’s performance
Pig prices continued to decline during the reporting period. In 2021, the price of live pigs decreased from 35.4 yuan / kg at the beginning of the year to 16.3 yuan / kg at the end of the year, with a decrease of 54%, of which the price of pigs fell to a low of 10.8 yuan / kg in the third quarter. Pig prices maintained a downward trend in the first quarter of this year. Due to the rise of feed cost and the increase of head average depreciation and amortization expenses, the breeding cost of the company has increased. Since the third quarter of last year, the company has suffered losses and continued to the first quarter of this year.
The market share ranks first in the industry, and there is room for downward growth in breeding costs
In 2021, the company sold 40.263 million pigs, with a year-on-year increase of 122.3% and a market share of 6%, ranking first in the industry. In the first quarter of 2022, the company sold 13.817 million pigs, a year-on-year increase of 79%. At present, the company can breed 2.752 million sows and has a production capacity of more than 70 million pigs. It is fully capable of achieving the goal of 50 ~ 56 million pigs. This year, the company will strive to achieve the full cost of 13 yuan / kg in stages, and there is still much room for improvement in the cost.
Slaughtering capacity continued to expand and the layout of the whole industrial chain was further improved
In 2021, the company slaughtered a total of 2.899 million pigs, realizing a slaughtering meat business revenue of 5.42 billion yuan. As of the first quarter of this year, the company has put into operation eight slaughterhouses with a total slaughtering capacity of 22 million. It is estimated that the slaughtering capacity of the company will exceed 30 million in the first half of this year. The company’s slaughtering business has more than 5000 customers from agricultural batch dealers, chain supermarkets, chain catering, food processing enterprises and new retail enterprises.
Investment advice and profit forecast
It is estimated that from 2022 to 2024, the net profit attributable to the shareholders of the parent company is RMB 8.57 billion, RMB 31.58 billion and RMB 32.54 billion respectively. According to the latest share capital calculation, the corresponding basic earnings per share are RMB 1.61, RMB 5.93 and RMB 6.11 per share respectively. According to the latest share price calculation, the corresponding PE valuation is 32.4, 8.8 and 8.5 times respectively. Maintain the company’s “buy” investment rating.
Risk tips
Epidemic risk, less than expected slaughter of pigs, food safety risk and rising breeding costs.
