Makihara (002714) 2019 third quarter report performance preview comment: pig price jump + low cost profit exceeds expectations

Makihara (002714) 2019 third quarter report performance preview comment: pig price jump + low cost profit exceeds expectations

Core point of view The price difference between the September price and the market price has converged.

The pig price jumped high and the company’s cost control was excellent. The company expects to make a profit in 19Q314.

500 million-16.

500 million.

The company ‘s sow scale expansion exceeded expectations, and the forecast for the number of slaughters in 2021 was revised; the pig price performance exceeded expectations, and the 2019/20/21 profit forecast was revised with a target price of 95 yuan and a “Buy” rating maintained.

   September fattener pigs weighed more than expected.

The company disclosed the monthly report published in September 2019.

In September, the company sold 730,000 pigs (down 6% with a 2% increase), and the sales volume was in line with expectations.

The commercial pig weighed 26.

17 yuan / kg (ring up 29%, higher than Tianbang’s 24.

8 yuan / kg), the price difference with the market price has converged, the performance exceeded expectations.

  Income 19.

2.2 billion 杭州夜网 (92% increase, 41% increase). It is estimated that the sales volume of piglets is about 200,000 to 250,000, and the weight of fattening pigs has increased significantly.

   The pig price jumped to a high level and the company’s cost control was excellent. The profit was expected to be 14 in 19Q3.

500 million-16.

500 million.

The company disclosed the performance forecast for the third quarter of 2019, and it is expected that it will gradually make a profit of 1.3 billion to 1.5 billion in the first three quarters and a profit of 14 in the third quarter alone.

500 million-16.

500 million.

Performance exceeded expectations.

Combined with the monthly report data, the company produced 2.12 million live pigs in the 19Q3 (down 27%, down 23%), with an average profit of about 684-778 yuan per head.

Our wholesale company’s commercial fat pig breeding cost is about 14-14.

2 yuan / kg, an increase of about 1 yuan / kg from 19Q2, which is mainly due to the decrease in the amount of columns and the increase in amortization such as expenses.

Regardless of whether the company’s fattening costs have been increased or similar listed companies outside the absolute mean range, the cost control is excellent and the performance exceeds expectations.

   The size of sows has expanded rapidly, and the growth rate of slaughter can be expected to increase.

As of August 2019, the previous breeding sow inventory has decreased by approximately 37 per year.

4%, a month-on-month increase of 5.

5 units.

That is, the industry’s sow capacity is still accelerating.

The interim report shows that the company’s productive biological assets have stabilized and increased by 18% and 32% in the same period.

  It shows that its sow inventory has rebounded ahead of the industry as early as the second quarter.

The company’s recent announcement revealed that it is expected to reach 900,000 heads at the end of September and 1.3 million heads at the end of December, which is faster than expected.

Therefore, we expect that the growth of the company’s hog production volume will also be ahead of the industry recovery, and it will accelerate significantly. It is expected to fully enjoy the bonus period of double volume and profit growth in the future.

   Risk factors: Livestock and poultry prices rise more than expected; raw material prices fluctuate sharply; livestock and poultry epidemics.

   Investment suggestion: Considering that the company’s sow inventory has stabilized and is expanding at a faster-than-expected rate, we estimate that the number of pigs slaughtered in 2020 will be about 20 million, and the number of pigs slaughtered in 2021 will be increased to 30 million.

At the same time, we have revised up our EPS forecast for 2019/20/21 to 2 as pig prices rise more than expected.

07/11.

07/15.88 yuan (was 1).

94/7.

34/6.

24 yuan).

Maintain target price of 95 yuan (corresponding to only 8 PE in 2020).

6 times), maintain “Buy” rating.