Zhengbang Technology (002157): Continued high growth in pig price turning point brought performance turning point
Events: 1) The company disclosed its 2018 annual report, and the company realized revenue of 221 in 2018.
13 ppm, a ten-year increase of 7.
27%, net profit attributable to mothers1.
93 trillion, down 63 a year.
2) The company disclosed the first quarter report of 2019, and the company realized revenue of 51 in the first quarter.
94 ppm, a ten-year increase4.
74%, net profit attributable to mother -4.
14 ppm, a reduction of 743 per year.
Continued high growth in slaughter, and the decline in pig prices led to a decline in the company’s performance in 2018.
In 2018, the company’s breeding segment achieved gross profit6.
5.0 billion, average head gross profit of about 109 yuan, compared to 2017 (232 yuan / head) decreased by 53%.
The decline in the profit of the breeding sector is the core reason for the company’s performance.
In the first quarter of 2019, the company listed 168.
750,000 heads, an increase of 58 in ten years.
87%, of which about 1.5 million fattening pigs, sales income of breeding sector20.
90,000 yuan, an increase of 33 in ten years.
In the first quarter of 2019, the average sales price of fattening pigs was about 11 yuan / kg, which continued to expand in depth, which led to a decrease in the company’s first quarter performance.
African swine fever has caused the highest productivity to be eliminated, and the pig price cycle has started. It is expected to accelerate the expansion again in 5 months. Affected by African swine fever, the reproductive capacity of capable sows in the country will deteriorate. According to data from the Ministry of Agriculture and Rural Affairs, March 2019Fertile sow inventory is reduced by 21% each 南宁桑拿 year.
We expect the pig price increase in this cycle will continue for 2-3 years, and the high point will exceed 25 yuan / kg. The current cycle is still in the initial stage.
We expect that in May, the industry supply will gradually tighten, and demand will gradually recover. Pig prices are expected to accelerate growth again.
The company’s production capacity has expanded rapidly, and the volume of slaughter has increased rapidly. It is estimated that the relatively low productive biological assets determine the slaughter capacity of the company’s pigs.
Horizontal comparison, the production biological assets of Muyuan at the end of 2016 was 9.
8.3 billion, with 7.24 million heads released in 2017, and productive biological assets at the end of 2017 reached 14.
02 ppm, the number of listings in 2018 reached 11.1 million heads; from the end of 2017 to the first quarter of 2019, the company’s productive biological assets continued to be above 10 ‰, which is always higher than the level of Muyuan in 2016.
We expect that even considering the impact of the epidemic on the number of listings, the company’s listings will reach 8 million in 2019.
Corresponding to the number of listings in 2020 and the closing market value on April 19, 2019, the average market capitalization of Wen’s shares, Makihara shares and Tianbang shares were 5671 yuan, 8644 yuan and 4100 yuan, respectively, while the average market value of Zhengbang Technology was only3782 yuan, the income limit in the main pig breeding enterprises!
Give “Buy” rating: It is estimated that from 2019-2021, the average price of the company’s fattening pigs will be 16/19/20 yuan / kg, and the company will realize a net profit of 30.
2.1 billion, an average of 1491.
01% / 129.
75% / 60.
12%, corresponding EPS is 1.
98/4.77 yuan, giving the company 10 times PE in 2020, with a target market value of about 70 billion yuan.
Risk warning: pig price fluctuations; epidemic diseases; policy changes; less-than-expected volume; outbreaks lead to rising costs; performance is not up to expectations