Zhengbang Technology (002157): Stable growth in pig business volume and significant increase in company performance

Zhengbang Technology (002157): Stable growth in pig business volume and significant increase in company performance

The event company releases its 2019 annual results.

In 2019, the company realized operating income of 254.

42 ppm, an increase of 15 in ten years.

05%; realize net profit attributable to shareholders of listed companies.

97 million, an annual increase of 777.

53%; basic profit income is 0.

69 yuan.

Our analysis and judgment of the hog business volume has stabilized and increased in value. The company’s performance has increased significantly. The reason for the 四川耍耍网 company’s 2019 performance growth is mainly due to the rebound in hog prices since the second quarter, and the average price of hogs in the third and fourth quarters has further increased significantly.

In 2019, the company will gradually sell live pigs 578.

400,000 heads, an increase of 4 in ten years.

41%.

The excessive complexity of the average selling price of fat pigs affected by domestic pig supply rose to about 18.

20 yuan / kg, the sales income of pigs will increase 49 each year.

25% to 113.

8.2 billion.

The cost of pig breeding increased due to the increase in biosafety prevention and control expenses, some pigs were released in advance, the transportation was shifted, and the increased utilization of new farm capacity was not saturated.

We calculate and exclude 4.

After non-recurring gains and losses of 4.7 billion U.S. dollars, the company’s pig breeding heads made an average profit of about 216 yuan.

In terms of feed business, as the company mainly focuses on pig feed and poultry feed, affected by the domestic non-plague epidemic situation, the number of live pig stocks has changed directly, and the company’s pig feed sales have improved.

In the third quarter, the company actively adjusted its product structure, increased poultry meat sales, and its long-term feed business income fell slightly over 4.

20% to 127.

2.1 billion.

The pneumonia epidemic is likely to be postponed, and the booming period of high pig prices will be affected by the African swine fever epidemic. In the second and third quarters of 2019, the domestic breeding sow population in China will be significantly lower than the previous month.Retention strategies and actions, the domestic sow inventory performance in the fourth quarter showed a bottoming out.

According to our understanding, from December 2019 to January 2020, some local diseases occurred in the northern region, and the sow inventory may be slightly shifted from the previous month.

It is also worth noting that the Wuhan pneumonia epidemic may be supplemented by the industry in the first and second quarters of this year, which will reduce the number of listings in the fourth quarter of the year and early 2021, the degree of supply recovery will be reduced accordingly, and the boom period of high pig prices will be extended.

We expect the average hog sales price in 2019 to be around RMB 18-20 / kg, and the average hog price in 2020 is expected to be around RMB 28-30 / kg.

The industry is still in the period of performance.

The sow production capacity has been released, and the performance has continued to be realized. The company can introduce a large number of seeds from the second quarter of 2019. The productive biological assets at the end of September were 18.

1.3 billion, an increase of 44 from the end of June.

69%, as of the end of December 2019, the company’s sow inventory scale reached 119.

750,000 heads, and the number of listings in 2020 is guaranteed.

At the same time, through the increase of the company’s sow inventory, the release of production capacity can reduce the amortization cost, and the company’s complete hog cost is expected to decrease.

With the introduction of high pig prices, the company’s breeding performance will continue to materialize.

In addition, the hog inventory in the early stage gradually recovered and the company’s pig feed business sales are expected to continue to improve.

Investment suggestion: We expect Zhengbang Technology’s operating income from 2020-2021 to be 367.

15 ppm and 447.

24 ppm, an increase of 44 in ten years.

31% and 21.81%; net profit attributable to mothers is 81.

6.5 billion and 63.

24 ppm, an increase of 381 in ten years.

43%, -22.

55%, corresponding to a PE of 4.

7 times and 6.

1x, maintain the company’s “Buy” rating.

Risk factors: The price of hogs has fallen sharply; the swine fever epidemic has affected the number of listed companies.