Zhengbang Technology (002157) 2019 performance preview comment: 2019 profit hits a record high sow inventory on the rise

Matters: The company’s 2019 performance forecast is released: net profit attributable to mothers will reach 16 trillion to 18 trillion in 2019, and therefore increase by 727.

2% -830.

6%, of which, non-recurring gains and losses3.

5 ppm-4.

500 million, a record high since listing.

Comments: Net profit attributable to mothers in Q4 201915.

5 ppm-17.

500 million, a big increase of 879% -1006% in ten years.

The company achieved revenue of 40 in Q4.

690,000 yuan, an increase of 57% in ten years, net profit attributable to mothers in the fourth quarter of 201915.

5 ppm-17.

50,000 yuan, an increase of 879 in ten years.

4% -1005.

8%, the company’s annual increase in performance is mainly due to the rise in hog prices.

In 2019Q4, the company released 128 live pigs.

70,000 pigs, of which about 250,000 piglets are slaughtered and about 1.05 million pigs are slaughtered by fattening pigs.

In the fourth quarter of 2019, the company’s unit breeding cost increased slightly, mainly including: ① the third and fourth quarters of commercial pigs sold, the proportion of out-fed piglets fattening was relatively high; ② amortization of new fattening farm lease fees, the overall capacity accumulationNot high; ③ Year-end bonuses for large employees are paid, and the proportion of settlements for caregivers is high.

According to our calculations, the company ‘s own fattening costs in 2 019Q4 increased slightly to 19-20 yuan / kg, and the cost of outsourcing piglets was 25-26 yuan / kg.

At the end of 2019, the stock of sows has increased significantly to 119.

750,000 heads, comprehensive upgrade of biosafety prevention and control.

① Sufficient breeding pig resources.

The company owns GGP. The total number of GP breeding pigs is about 150,000. At the end of September this year, the company had 65 sows.

30,000, of which 35 can breed sows.

20,000 heads, 30 reserve sows.

10,000 heads, and the sow inventory at the end of 2019 will reach 119.

750,000 heads, a sharp increase of 83 from the end of the third quarter of 2019.

4%, the number of pigs to be slaughtered in 2020 is expected to reach 11-13 million.

② Comprehensive improvement of biosafety prevention and control.

Biosecurity prevention and control of pig farms is a key factor affecting the survival of pig farms. Since October, the company has comprehensively combed and adjusted the SOP, and the results have been immediate. The company’s own fattening market listing rate reached 90% in 2019Q4, and its biosecurity prevention and control ability has reached a new level.

Earnings forecasts, estimates and investment ratings.

According to the official data of the Ministry of Agriculture, the number of fertile sows in the country in November 2019 increased by 4% month-on-month. From a static perspective, the number of pigs released in November 2020 increased from the month-to-month basis; from a dynamic perspective, the non-epidemic situation has not yet stabilized.Continue to observe that the ternary seed retention efficiency has decreased by more than 60% compared with the binary, and the development of industrial non-pestic vaccines has caused serious consequences. We expect that high pig prices may continue to at least 2021.

We maintain our normal judgment. Under the pressure of epidemic prevention and control, large-scale breeding groups are embracing huge expansion growth. In addition to possessing breeding pig resources, profitable financial strength, and enhancement of biosafety prevention and control capabilities have become the top priority, and biosafety prevention and control effectsWill directly affect the price of slaughtering pigs, slaughtering weight, breeding costs, affect profitability and expansion speed, and the profitability of listed pig companies will gradually diverge.

In the fourth quarter of 2019, the company’s biosafety prevention and control was fully upgraded, and non-plague prevention and control achieved better results. The company’s operating inflection point has now been reached.

Democracy 杭州桑拿 set a higher growth target for pigs in the fair incentive plan, and obtained a large amount of credit from shareholders. The major shareholders’ confidence and determination to strengthen and expand the company’s pig breeding business have been highlighted.

We expect the company to produce 578 pigs in 2019-2021.

40,000 heads, 12 million heads, 15 million heads, corresponding to income of 223.

600 million, 497.

200 million, 568.900 million US dollars, because we raised the company’s unit breeding costs, the corresponding reduction of the mother net profit to 17.

5.7 billion, 165.

3.5 billion, 178.

500 million (previous forecast was 24.

100 million, 184.

600 million, 194.

900 million), an annual increase of 808.

2%, 841.

3%, 8.

0%, correspondingly lower EPS to 0.

72 yuan, 6.

73 yuan, 7.

南京夜网27 yuan (previous forecast EPS is 0.

99 yuan, 7.

55 yuan, 7.

97 yuan).

The hog sector has a PE of more than 10 times the profit high. We give the company 5 times the PE in 2020 and the corresponding target price is 33.

65 yuan, maintaining the “strong push” level.

Risk warning: pig price rises less than expected; blight.