Shengnong Development (002299): High poultry prices drive up performance
Company NewsCompany Status Recently, we studied the development of Shengnong, and communicated with the company and industry trends and synchronization.
Comment on the high bird prices in 1H19, which drove the company’s performance to rebound significantly: The company recently issued a revised forecast of results, and 1H19 returned to its net profit of 16.
600 million, up 393 before?
Among them, we predict that Shengnong Food’s contribution performance will approach 2 in 1H19.
5 trillion, the total contribution of the breeding and slaughtering business is about 14 trillion.
For the breeding and slaughtering business, we forecast a slaughter volume of about 2 in 1H19.
200 million birds, and the single bird’s net profit is about 6.
The 1Q19 / 2Q19 single feather net profit was about 6.
7 yuan, at a historically high level.
The rebound in poultry prices is the main reason for the improvement in the company’s performance. According to the Poultry Industry Association, the average price of 1H19 white chickens rose by 21.
At 2%, we judge that the average cost of sales of the company has increased close, and because the price of soybean meal in raw materials has weakened, we judge that the average cost of sales of the company should ignore a slight decline.
The epidemic situation will be strengthened, and the company will continue to promote the release of the company ‘s performance. The company said that under the background of the African swine fever epidemic, the gap between protein and protein was enlarged and the substitution consumption of chicken to pork was rising, which is the core reason for the current rise in poultry prices.
Looking forward, we believe that the current pig breeding volume in 2H19 is decreasing, and there is still the possibility of an increase in the summer epidemic. Higher levels of alternative consumption will still support high poultry prices, and the company’s performance this year is expected to be released.
But at the same time, it is worth paying attention to the rising trend of supply, including the increase in the number of ancestor introductions, the increase in the number of breeder stocks, and the potential compulsory moulting factors. Therefore, we estimate that the price of poultry in 2020 will replace the impact of increased consumption and increased supply.Difficult to continue upward but still maintain a high position.
Long-term attention to the benign improvement of the company’s operations: We recommend paying attention to some bottom-up efforts of the company, some of which will gradually lead to the improvement of the long-term estimated center: 1) The increase in efficiency brings the cost balance, which includes the decline in feed-to-meat ratio.Transformation and reduction of artificial use, and improvement of feed formula; 2) Breakthrough in breeding technology, we believe that breeding substitution is one of the most excessively profitable production alternatives. The company is currently trying to internalize breeding and change to overcome imported ancestral chicken seedlings.The situation in which Miao maintains production will help increase the long-term net interest rate; 3) The rapid volume of Shengnong Food will continue to increase the proportion of the company’s industrial chain’s mid-to-downstream business and the value space of the industrial chain will also increase.
Estimates suggest that we raise our poultry price assumptions for this year and next year, and boots increase our net profit forecast for mothers in 2019/202031.
6% / 74.
7% to 25.
8.6 billion yuan.
It is estimated that the valuation will be 13/13 times of 2019/2020, and we maintain the outperform industry rating. At the same time, considering the upward revision of profit forecast and the 南京夜网 company’s performance will enter the release period, the valuation center will sink.
4% to 35 yuan, the target price corresponds to 17/17 times the 2019/2020 valuation, +34.
Risks Poorer-than-expected rise in bird prices; major epidemic risks; fluctuations in raw material prices.