Shengnong Development (002299): Continuation of industry prosperity and cost segmentation welcome performance improvement

Shengnong Development (002299): Continuation of 四川耍耍网 industry prosperity and cost segmentation welcome performance improvement

This report reads: The rebound in the industry’s prosperity has driven up product prices, chicken prices have increased quarter by quarter, and the company’s profits have expanded significantly.

At the same time, the company’s pig raising costs have fallen, which has helped the company’s profit growth.

Investment Highlights: Due to the impact of African swine fever, we believe that the high price of chicken is trying to exceed expectations, and we maintain the company’s EPS forecast for 19-21 to 1.

95 yuan, 1.

79 yuan and 1.

36 yuan, due to higher-than-expected profit time expectations, the industry’s overall expectations are rising, with reference to comparable companies given on the 16th of 19 years.

59 times PE, raise target price to 32.

36 yuan (+1.

94), maintaining “overweight”.

The company disclosed the semi-annual performance forecast, which exceeded market expectations.

The company expects to return to net profit of 16 in Q1.

5 ppm-16.

600 million, a sharp increase of 392 previously.

53% -395.

51%.

Price: The rebound in the industry’s prosperity has driven up product prices, chicken prices have increased quarter by quarter, and company profits have increased significantly.

Although the prices of chickens and chickens have dropped significantly in the early stage, due to the strong downstream demand and some substitutions of chickens and pigs in the canteens and other channels, the company’s comprehensive chicken substitutions have only gone from the highest level.

32 million small brightness to the current 1.

280,000 yuan.

Later, we believe that although the gradual elimination of breeders has prolonged the entire egg production cycle, after the decline in the previous period, the number of eliminated breeders on the supply side has increased, and the supply-side dividends are sustainable; and the introduction of the market-induced amount of seed to form a supply requires 14For months, and under the influence of African swine fever, demand for chicken alternatives has 西安耍耍网 risen, trying to keep bird prices high.

Cost side: We expect the company’s full cost to be reduced to a level of slightly over 9,000 yuan / ton.

Improvement. Due to the continuous optimization of the company’s management, production and operation efficiency has been significantly improved.

At the same time, due to the impact of African swine fever, the market demand for corn and soybean meal has increased. In the first half of the year, the price of soybean meal was replaced from 3115 yuan / ton to 2784 yuan / ton, which can replace 10.

26%, meanwhile, the cost of corn has also increased significantly, thereby reducing the company’s production costs.

Risk Warning: The cost of corn and soybean meal is rising rapidly, and the price of chicken is higher than expected.