Tianbang Co. (002124): Pig breeding volume and price rise still has room for benchmarking leaders

Tianbang Co. (002124): Pig breeding “volume and price rise” still has room for benchmarking leaders

Key points of investment: The layout of the entire industrial chain of Tianbang Co., Ltd. (hereinafter referred to as the company), mainly from the pig breeding business in 2019-2020.

The company’s main business includes feed, biological products (Chengdu Tianbang), hog farming (Han Shiwei), fresh food 深圳丝袜会所 (picking up taste) and engineering construction (Tianbang Kaiwu).

The performance elasticity of the company from 2019 to 2020 mainly comes from the “volume and price rise” of pig breeding.

It is estimated that the number of pigs slaughtered in 2018-2020 will reach 217/350/5 million heads, with a ten-year growth rate of 114% / 61% / 71%.

We analyze the company’s pig breeding reserve capacity from fixed assets on the balance sheet, construction in progress, productive biological assets, and cash flow capital expenditures.

2019: New production capacity is still mainly from fixed increase projects, 18Q1, 18Q2, 18Q4, 19Q1 added capacity were 127.

50,000 heads, 16.

50,000 heads, 930,000 heads, 99.

30,000 heads.

The number of new listings in 2019 can theoretically reach 2 million heads (16.

5/2 + 93 + 99.

3) Assuming 65% -70% increase in capacity utilization, 3.5 million heads will be released in 2019.

2020: In 2018, the company’s fixed assets, construction in progress, and productive biological assets will overtake decades of companies in the same industry (Makihara, Wen’s, Zhengbang Technology).

From 2017 to 2018Q3, capital expenditure has exceeded 2.3 billion (expected to increase production capacity by 4.6 million heads). Even without considering new production capacity in 18Q4 and 2019, the capacity in reserve can achieve 6 million heads in 2020.

Preliminary target: According to the company’s plan, the company’s capacity expansion will exceed 10 million heads, but the rhythm of capacity release, capital, and the African swine fever epidemic are factors.

According to our estimates of the company’s volume, price, cost and neutral assumptions, it is estimated that the company’s pig raising profit in 2019 will exceed 700 million yuan.

The main factors driving the rise in pig prices in 2019 are the effects of the African swine fever epidemic. In theory, the more severe the epidemic, the change in the industry’s production capacity, the increase in pig prices, the possibility that listed companies will not meet the expectations, and the cost may increase.

If the impact of African swine fever is ruled out, it is assumed that: 3.5 million pigs will be slaughtered in 2019; the average selling price of pigs is 15 yuan / kg; the weight of slaughter is 110 kg / head; the full cost of breeding will be 13 yuan / kg.Profit from breeding business is about 7.

7.3 billion.

The elasticity calculation is performed at a fixed cost. The elasticity of the net profit of the company’s pig breeding section to the price is much greater than the elasticity to the amount of slaughter.

In addition, it is necessary to perform elastic calculation under the assumption of different costs. In 2019, the company’s hog breeding sector will likely have a net profit of about 700-800 million. Therefore, the PE value of the hog breeding business corresponding to the current market value (excluding other businesses) is aboutIt is 15-17X; under the optimistic assumption, the breeding profit reaches 1 billion to 1.5 billion US dollars, the current estimate is about 8-12X; under the pessimistic assumption, the breeding profit is only 300-400 million, currently estimated at about 29-39X.

Earnings forecast and estimation: It is estimated that the company’s net profit attributable to the parent in 18/19/20 will be -5.

52/8.

98/20.

64 ppm (Due to the 18-year pig price gain and the recognition of a large non-recurring loss, the 18-year profit forecast is lowered by the original variable 5.

85 ppm; added 19-20 year profit forecast), EPS is -0.

48/0.

77/1.

78 yuan / share, the current sustainable corresponding 19/20 PE is 16 / 7X.

Tianbang shares, Wen’s shares, Makihara shares, Zhengbang Technology currently corresponding to 19 years PE is 16/21/45 / 23X; the average market value of the head is 3334/6161/7034/3944 yuan.

Under the two estimation methods, the estimated average value of Tianbang shares exceeds the industry average.

If the average market capitalization method is adopted, and the company estimates to move closer to the leading 南京夜网 enterprises, the company’s merger will still double the space and maintain a “buy” rating.

Risk reminder: The increase in pig prices is not as expected; the company ‘s production volume exceeded expectations or the cost growth rate exceeded expectations due to the impact of the African swine fever epidemic will affect the company ‘s performance; there is a risk of insufficient supervision in corporate governance, etc.

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