\u3000\u3000 Muyuan Foods Co.Ltd(002714) (002714)
Event: the company recently released the performance forecast of 2021 annual report. In 2021, the revenue reached 77-80 billion yuan, up from 56.277 billion yuan in the same period of last year; The net profit was 7-8.5 billion yuan, a year-on-year decrease of 72% – 77%; The net profit attributable to the parent company was 6.5-8 billion yuan, a year-on-year decrease of 70.86% – 76.32%. Comments are as follows:
The number of live pigs increased sharply against the cycle, with outstanding growth. In 2021, the company’s net profit fell sharply year-on-year, mainly due to the loss caused by the price of pigs falling below the cost line in the second half of the year. In the second half of 2021, the unit selling price of the company’s pigs was 13.84 yuan / kg, down 32.48% from the first half of the year. In terms of sales volume, the company sold 40.264 million pigs throughout the year, with a year-on-year increase of 122%, which was significantly higher than that of other front-line leaders in the industry.
In the fourth quarter alone, the breeding cost decreased and the advantages were further enhanced. According to the calculation, the loss in the fourth quarter of 2021 was 1.2-2.7 billion yuan, and the full cost of fattening pigs in the fourth quarter was about 14.7 yuan / kg, down about 0.3 yuan / kg compared with the previous quarter. Compared with the industry, the cost advantage of the company is obvious and increasing, which helps to improve its ability to cross the cycle.
At the bottom of the pig cycle, it is recommended to buy. We believe that the pig price will bottom in the first half of 2022, and the probability of pig cycle reversal in the second half of 2022 is high. It is expected that the average price of pigs in the whole year will be 15-16 yuan / kg, which is basically the same and slightly lower than that in 2021. It is estimated that the company will sell 59.1 million pigs / 79 million pigs in 22 / 23 years, and the net profit attributable to the mother is 14.413/52.011 billion yuan. According to the number of listings in 2022, the current average market value (as of the closing price on January 21, 2022) is 4896 yuan, which is at the bottom of the historical range, and the buy rating is given. The target price for the next six months is 101 yuan, with 80 +% space from the current price.
