\u3000\u3000 Wens Foodstuff Group Co.Ltd(300498) (300498)
Dragged down by the pig breeding business, the company expects a loss of 13-13.8 billion yuan in 2021.
The company announced the performance forecast: the loss in 2021 was 13 billion yuan – 13.8 billion yuan, and the profit in the same period last year was 7.426 billion yuan, of which the losses in 2021q3 and Q4 were 7.2 billion yuan and 3.3 billion yuan – 4.1 billion yuan respectively. The sharp decline in the company’s performance was mainly due to the sharp decline in the price of pigs in 2021, the continuous rise in the price of feed raw materials, the outsourcing of some piglets for fattening, the continuous promotion of pig breeding optimization and other factors, which pushed up the cost of pig breeding, and the deep loss of the company’s pig breeding business.
The cost of pig breeding of the company decreased, and the number of high breeding sows reached 1.1 million.
In 2021, the company sold 13.217 million pigs, a year-on-year increase of 38.5%, and the average sales price of hairy pigs was 17.39 yuan / kg, a year-on-year decrease of 48.2%. According to our calculation, the loss of the company’s pig breeding business in 2021 was about 11.5 billion yuan, including 1h2021 loss of about 3.2 billion yuan, Q3 loss of about 5.2 billion yuan and Q4 loss of about 3 billion yuan. The corresponding costs were 28.9 yuan / kg, 24.0 yuan / kg and 20.7 yuan / kg respectively. The impairment of consumable and productive biological assets in 2021 was about 2.5 billion yuan. The company continues to promote the work of strengthening the foundation of pig business, improve the biosafety prevention and control system, continuously improve the quality of sows on hand, improve the listing rate of pigs and reduce the cost of pig breeding. In terms of cost, the company’s complete cost of pig breeding in November was 17.6 yuan / kg, which was significantly lower than 22 yuan / kg in Q3 and 19 yuan / kg in October. By the end of November, the company had basically digested the high price purchased piglets, and there was room for further reduction in the cost in 2022; In terms of production capacity, through the elimination of inefficient sows, the company now has about 1.1 million high breeding sows, which can meet the marketing plan of 18-20 million in 2022.
In 2021, 1.1 billion broilers were sold, with the best listing rate and feed meat ratio for many years.
In 2021, the company sold 1.101 billion broilers, a year-on-year increase of 4.8%, and 57.9789 million ducks, a year-on-year increase of 1.9%. According to our calculation, the profit of the company’s poultry business in 2021 was about 1 billion yuan. In terms of cost, in November, the complete cost of broiler breeding of the company has been reduced to 6.5 yuan / kg, and the marketing cost of wool chicken is about 6.3 yuan / kg. The breeding cost still has a strong competitive advantage against the background of the sharp rise in the price of raw materials; In addition, in November, the company’s broiler listing rate increased to 95.4%, which was at the best level in the company’s history for many months, and the feed meat ratio decreased to 2.8, reaching the best level in recent two years.
It is expected that the price of poultry chain will rise in 2022 and the price of pigs will rise in 2023.
We judge that if there is no serious epidemic in the pig industry, the pig price will be relatively low in 2022, and the inflection point may appear in 2023. ① From July to November 2021, the stock of fertile sows decreased by 6.9%, but since late October, the prices of piglets and breeding pigs have rebounded sharply. The recent decline in pig prices has not led to a significant decline in the enthusiasm to make up the stock. The change of the stock of fertile sows in the later stage still needs to be observed; ② Since the beginning of 2021, inefficient sows have been cleared and the efficiency of breeding pigs has been continuously improved; ③ From 2020 to 2021, a large number of pork imports need to be digested; ④ Mainstream listed pig enterprises plan to increase by more than 30% in 2022. The cost of 10000 pig farms and ordinary farmers is concentrated at 13 yuan / kg. At present, the pig price is higher than 13 yuan / kg, which is difficult to form an effective elimination.
We expect the price of bird chain to rise in 2022. ① In 2020, 1 million sets of white feather broilers will be renewed, with a year-on-year decrease of 18%. The price of white feather broilers is expected to stabilize and rise in 2022; In 2021, the national ancestral renewal volume increased significantly year-on-year, and the chicken price may decline in 2023. ② Affected by covid-19 epidemic, increased production capacity and other factors, the loss degree of yellow feather broiler industry in 2020 is second only to that of 2013 impacted by the “human infection h7n9 epidemic”. The stock of ancestors began to decline from the middle of 2020. The yellow feather chicken industry suffered an overall loss from 2020 to 2021, and the industry continued to lose production capacity. The price of yellow feather chicken is expected to rise moderately in 2022.
Investment advice
We estimate that from 2021 to 2023, the number of pigs sold by the company will be 13.22 million, 18 million and 27 million, with a year-on-year increase of 38.5%, 36.2% and 50.0% respectively, corresponding to the net profit attributable to the parent company of -13.39 billion yuan, 173 million yuan and 8.502 billion yuan, and eps-211 million yuan, 03 million yuan and 134 million yuan. After adjusting the breeding pig system and creating a high breeding sow group, the production performance of breeding pigs has improved comprehensively, and the slaughter volume is expected to reach 18-20 million in 2022. We expect that the price of live pigs is expected to rise in 2023. Now we give the average market value of pig heads to the company 7000 yuan, corresponding to the market value of pig business 126 billion yuan, broiler business 30 billion yuan, target market value 156 billion yuan, reasonable valuation 24.55 yuan, and maintain the “buy” rating.
Risk tips
Epidemic situation; Pig prices fell sharply.
