\u3000\u3 China Vanke Co.Ltd(000002) 714 Muyuan Foods Co.Ltd(002714) )
Low pig prices focused on quality for quantity, capital expenditure contracted, capital pressure weakened, and the "buy" rating was maintained
Muyuan Foods Co.Ltd(002714) released the annual report of 2021 and the first quarterly report of 2022: the company achieved revenue of 78.890 billion yuan (+ 40.18%) and net profit attributable to parent company of 6.904 billion yuan (- 74.85%) in 2021; In 2022q1, the company achieved a revenue of 18.278 billion yuan (- 9.30%) and a net profit attributable to the parent company of -5.180 billion yuan (- 174.40%). In 2022q1, the price of pigs was depressed, the price of feed raw materials was rising, the cost of fuel and power in winter was rising, and the cost of epidemic prevention and dead Amoy in winter was increased. The company's breeding loss in 2022q1 was enlarged quarter on quarter. Reduce the forecast for 20222023 and add the forecast for 2024. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 258 / 28942 / 33.854 billion (the value before 20222023 will be RMB 7162 / 42.608 billion respectively), EPS will be RMB 0.05/5.44/6.36, and the current share price corresponding to PE is 1077.6/9.6/8.2 times. The cost advantage at the bottom of the cycle is obvious, the capital pressure is weakened, and the "buy" rating will be maintained.
The rise of feed prices makes it more difficult to control short-term costs. The company focuses on the health management of pigs to reduce costs and increase efficiency
In 2021, the company sold 40.263 million pigs (+ 122%), accounting for 91.6% / 7.7% / 0.7% of commercial pigs, piglets and breeding pigs respectively; In 2022q1, 13.817 million pigs were sold (+ 79%), and the proportion of commercial pigs, piglets and breeding pigs was 93.9% / 5.9% / 0.2% respectively. By the end of 2022q1, the company has 2.752 million breeding sows, about 900000 backup sows, about 24 psy, and the whole process survival rate is about 80%. The company expects to produce 50-56 million pigs year-on-year. The full cost of pigs in 2022q1 company is 16 yuan / kg, and M3 has been reduced to 15.7 yuan / kg. It is expected that the complete cost of live pigs of 2022q2 company will be significantly reduced, coupled with the upward price of pigs, the loss range is expected to be marginal weakened, and turn losses into profits in Q3.
The contraction of capital expenditure significantly reduces the capital pressure of the company, and the cross cycle stability of production capacity is significant
As of 2022q1, the company's book monetary capital was 16.12 billion yuan, which was mainly due to the increase of the company's short-term borrowings, mainly in the form of major shareholder borrowings and bank short-term borrowings. By the end of 2022q1, the available balance of the company's credit still exceeded 20 billion yuan. The company has gradually suspended the existing and new projects under construction in 2021q3, contracted the investment cash outflow and enhanced the pressure resistance of funds at the bottom of the cycle. The net outflow of investment activities in 2022q1 is the deferred payment of preliminary works; The operating cash flow was flat, with a slight outflow of 58 million yuan. At the end of 2022q1, the company's asset liability ratio was 65.2%. After the convergence of capital expenditure, the stable production and operation at the bottom of the cycle was ensured and the pressure of capital demand was significantly reduced.
Risk tips: the recovery of pig stocks is not as expected, the immune density of farms is reduced, and the competition pattern of the industry is deteriorated.
