China Feed Industry Association disclosed the data of national feed output in April. The total output of industrial feed in April was 22.49 million tons, a year-on-year decrease of 10.8%. In terms of varieties, the output of pig feed was 9.63 million tons, a year-on-year decrease of 15.2%; The output of egg and poultry feed was 2.52 million tons, a year-on-year decrease of 9.4%; The output of meat and poultry feed was 7.05 million tons, a year-on-year decrease of 12.1%; The output of aquatic feed was 1.9 million tons, a year-on-year increase of 25.2%; The output of ruminant feed was 1.15 million tons, a year-on-year decrease of 4.4%. From January to April 2022, the cumulative output of industrial feed in China was 89.69 million tons, a year-on-year decrease of 0.8%. In terms of varieties, the cumulative output of pig feed from January to April was 41 million tons, a year-on-year decrease of 3.2%; The cumulative output of egg poultry and meat poultry feed from January to April was 10.39 million tons and 27.01 million tons respectively, with a year-on-year decrease of 2.9% and 1.5% respectively; The cumulative output of aquatic products and ruminant feed from January to April was 5.42 million tons and 4.92 million tons respectively, with a year-on-year increase of 32.7% and 4.7% respectively. From the cumulative year-on-year growth trend of various products, pig feed, egg and poultry feed and meat and poultry feed decreased slightly compared with the same period, ruminant feed increased slightly year-on-year, and aquatic feed continued the year-on-year high growth since the beginning of the year.
Since the beginning of the year, the cost pressure of feed raw materials such as soybean meal has increased sharply. Small and medium-sized enterprises without scale advantages and formula R & D reserve advantages have accelerated their exit, and the market share has further concentrated to the head. Bottom up market share expansion is the main driving force for the growth of head enterprises. We disassembled the driving factors of the historical growth of feed sales in Guangdong Haid Group Co.Limited(002311) 20062021. The expansion of market share contributed about 3 / 4 and the growth of total industry only contributed about 1 / 4.
Guangdong Haid Group Co.Limited(002311) future strategic planning is clearer. Feed, seedling and animal protection are the core businesses. The company sold 19.63 million tons of feed in 2021, and is steadily moving towards the goal of 40 million tons in 2025. From 2020 to 2021, affected by the covid-19 epidemic and the sharp rise in the price of upstream raw materials, the feed industry was rapidly integrated. The company seized the opportunity and made active layout: (1) newly invested and constructed a production capacity of nearly 5 million tons, covering all feed lines, of which the production capacity of special aquatic shrimp increased by nearly 2 million tons; (2) Through leasing, merger and acquisition, cooperative operation and other means, absorb and add more than 30 feed factories, increase the production capacity by about 3.7 million tons, and lay the foundation for achieving the target of 40 million tons; (3) According to the market development trend, we have actively arranged new products and categories, such as ruminant feed, pig premix, concentrated feed and other varieties, and made certain reserves in market development and team construction.
Investment suggestion: we continue to recommend Guangdong Haid Group Co.Limited(002311) , and the main logic of being optimistic about Guangdong Haid Group Co.Limited(002311) is: (1) from the year-on-year trend of quarterly performance, the first quarter may be the low point of the whole year, and the follow-up is expected to show a trend of quarterly improvement, and the annual performance is also expected to enter the recovery cycle; (2) The corresponding valuation of other businesses excluding pig breeding business is at a historically low level; (3) Since the beginning of this year, the price rise of upstream raw materials and the downturn of downstream breeding market have brought pressure on the whole feed in the short term, but due to the relatively poor pressure resistance of small and medium-sized enterprises, this will accelerate the withdrawal of small and medium-sized enterprises and further optimize the competitive environment of the company; (4) The company’s stock option incentive plan has wide employee coverage and clear objectives. At present, the stock price is close to the exercise price of equity incentive; (5) The actual controller of the company plans to subscribe for the additional issuance in full, demonstrating his confidence in the future development of the company. It is estimated that the company’s net profit attributable to the parent company from 2022 to 2024 will be RMB 2.520/4.522/5.509 billion, corresponding to EPS of RMB 1.52/2.72/3.32, maintaining the “Buy-A” rating.
Risk tips: the resurgence of livestock and poultry epidemic leads to lower than expected sales of livestock and poultry feed, lower than expected sales of aquatic feed due to extreme weather, and the price fluctuation risk of raw materials such as fish meal and corn soybean meal.
