\u3000\u3000 Wens Foodstuff Group Co.Ltd(300498) (300498)
Event: the company released the performance forecast for 2021. During the reporting period, the company realized a net profit loss attributable to the shareholders of the listed company of 13-13.8 billion yuan, a year-on-year decrease of 275% – 286%; In the fourth quarter, the company realized a net profit loss of RMB 3.299-4.099 billion attributable to shareholders of listed companies (a loss of RMB 9.701 billion in the first three quarters of 2021), a year-on-year decrease of 304% – 402% and a month on month increase of 43% – 54%.
Our analysis and judgment:
1. Pig sector: the marginal decline of pig raising cost, superimposed with the rebound of pig price, narrowed the loss in 2021q4
1) the number of pigs sold exceeded the expectation: in 21 years, the company sold a total of 13.2174 million pigs, an increase of 38% at the same time, exceeding the expectation (the original expectation of 12 million pigs); Among them, the number of pigs sold in the fourth quarter alone was 4.24 million, an increase of 71% and a decrease of 1%.
2) cost and profit: the price of pigs dropped significantly in 2021. The average selling price of pigs in the whole year was 17.39 yuan / kg, down 48% at the same time; In the fourth quarter alone, the pig price was 14.6 yuan / kg, up 7% from the third quarter. The rapid decline of pig price has brought losses to the company’s pig sector. From the whole year of 2021, the average weight of the company’s commercial pigs is 117.9kg (down 5% at the same time). With the emergence of the inflection point of the company’s pig raising operation, the cost has gradually improved. It is expected that the company’s average loss of pigs under the full caliber cost in 2021 will be about 850-900 yuan / head, and the annual loss of pig sector will be 11.6 billion yuan; From 2021q4, the average head weight of the company decreased compared with the previous period, with an average weight of about 116kg, and the cost is still in a downward trend. The lower head of the full caliber lost 900-950 yuan / head, and the pig breeding sector lost about 3.9 billion yuan in the fourth quarter.
3) future expectation: on the one hand, pig production capacity will be released and the market will return to high growth. Up to now, the company has completed 46 million pig farms, 26 million fattening and feeding capacity, and 1-1.1 million high-efficiency breeding sows. With the further improvement of the company’s production indicators, the company plans to sell 18-20 million pigs in 22 years. On the other hand, the cost is expected to decline further. We expect that in the future, with the further improvement of the company’s capacity utilization and production and operation indicators, the pig raising cost is expected to fall below 17 yuan / kg.
2. Huangji sector: steady growth in marketing and further improvement of cost control advantages.
1) steady growth in slaughter: in the past 21 years, the company’s broiler slaughter volume was about 1.101 billion, a slight increase of about 5% compared with the same period in 20 years, basically maintaining the company’s planned annual growth target of 5%. Among them, about 313 million feathers were sold in the fourth quarter, with a ring increase of 3% and a simultaneous increase of 12%.
2) significant improvement in cost control ability: in the past 21 years, the company’s yellow chicken sales price was about 13.20 yuan / kg, an increase of 13.50% at the same time; Among them, the price in the fourth quarter was better, about 14.06 yuan / kg, an increase of 10% and 18% respectively. The price of yellow chicken has rebounded and the cost of the company has further decreased (we expect the full cost of yellow chicken breeding in 21 years to be about 12.5-13 yuan / kg), we expect the profit of single feather to be about 0.9-1 yuan, and the profit of the sector is expected to be about 1-1 billion yuan; Among them, Q4 single feather made a profit of about 2-2.5 yuan and a profit of 700-750 million yuan.
3) future expectation: on the one hand, the company plans to sell yellow chicken, which is expected to further steadily increase by 5%; On the other hand, to further consolidate the cost advantage, we estimate that the total cost target of yellow chicken breeding in 22 years will be reduced to 12-12.5 yuan / kg; Third, accelerate the transformation and upgrading and enhance the competitiveness of the company. The company plans to sell about 50% of the broilers sold by the company in the form of hairy chicken, about 30% in the form of fresh products and about 20% in the form of cooked food by the end of 2024.
3. Investment suggestion: give a “buy” rating. The loss of the pig industry has led to a significant de industrialization of production capacity, and it is expected that the de industrialization trend has become a reality; Pig prices stopped rising in the short term, the industry’s willingness to fill the column is not strong, and the deregulation of production capacity is expected to accelerate marginally; We estimate that Wens Foodstuff Group Co.Ltd(300498) 20 million and 30 million will be sold in 2022-2023; Considering the head average profit and head average market value at the peak of the company’s business cycle, there is expected to be sufficient upward space. The pig price itself fluctuates periodically, and the pig price enters a downward cycle in 21 years. Therefore, we reduce the income and profit in 21 years. It is estimated that the company will realize an income of 60.6/710/113.5 billion yuan (580 / 712 / 110.1 billion yuan before 21-23 years), an increase of – 19.14% / 17.23% / 59.72% and a net profit attributable to the parent of – 135 / – 46 / 20 billion yuan (125 / – 29 / 13.5 billion yuan before 21-23 years), The same increase was – 281.39% / 65.55% / 530.35%.
Risk tips: 1. Epidemic risk; 2. Price fluctuation, 3. Risk of policy change; 4. Less than expected; 5. The performance forecast is the preliminary calculation result. Please refer to the annual report
