Shuanghui Development (000895): High Index Bright and Stable Growth Expected
Against the background of the effects of African swine fever in the second half of 2018, the company’s dual-main business remained stable, the inter-provincial embargo restrictions on slaughtered beneficiary pigs reached a new high, and the expenditure on meat products expanded to promote transformation.
The 18-year high dividend policy has continued, with two dividend payout ratios up to 5 during the year.
In response to the upward pressure on the pig cycle, the company has increased its raw material reserves and gradually raised its price. 19 years of steady growth is still expected.
We adjusted the EPS forecast for 19-20 to 1.
57 and 1.
70 yuan, 19 times 19 years of PE, target price of 30 yuan, maintaining “strongly recommended-A” rating 18Q4 Although African swine fever has affected, the profit margin has improved, and the year’s yield is as 四川耍耍网 high as 5.
The company’s 18-year revenue was 489.
30,000 yuan, the average ten years -3.
3%, net profit attributable to mother 49.
100 million, an increase of 13 in ten years.
8%, of which the single quarter income of 18Q4 was 122.
80,000 yuan, ten years average -7.
3%, net profit attributable to mother 12.
6 ppm, a ten-year increase of 8.
0%, African swine fever is still affected in the short term, and the profit margin has improved.
18Q4 single quarter gross profit margin 21.
8%, Zhengzhou and Shenyang slaughter plants were lifted in the third quarter due to the impact of the suspension of the epidemic.
3 pcts, the cost advantage at the bottom of the pig price is obvious.
Initial selling expense ratio 5.
4%, an increase of 0.
7pct, meat products business increased expenses and slaughtering continued to develop channels, management expense ratio2.
3% (reduction of R & D expense account adjustments), a slight increase of 0 several times.
The company’s inventory increased sharply to 42 at the end of 18 years.
US $ 300 million, which has gradually increased the original reserves in response to the growth of the pig cycle, gradually operating cash flow51.
9 trillion, the overall cash flow remained stable.
The company’s annual report disclosed that it plans to pay 5 for every 10 shares.
A cash dividend of 5 yuan (including tax), plus a dividend of 9 yuan (including tax) for every 10 shares in the three quarterly dividend, the dividend distribution rate in 1997 is 97%, and the dividend rate is 5.
Slaughtering business: The slaughter volume is still suppressed by the epidemic situation, but under the hog embargo decree, the advantage of inter-provincial deployment of cold fresh meat is obvious, and the single season heads have reached new highs.
The company slaughtered 16.31 million heads in 18 years, an increase of more than 14.
3%, sales of 153 budget, a slight increase of 0.
8%, of which 4.28 million were slaughtered in 18Q4, a two-year low increase of 2.
2%, single season fresh frozen meat sales decreased by 38, -10.
The growth rate in the second half of the year was significantly lower than that in the first half of the year. African swine fever has been suppressed in the short term, and the impact of the shutdown of Q4 has been lifted.
At the same time, due to the short-term sharp reduction in pig prices, the slaughtering business had an external income of 289 for 18 years.200 million, down -4 a year.
9%, of which external income in the single quarter of 18Q4 was 74.
60,000 yuan, the average ten years is -6.
Operating profit from preliminary slaughter10.
5 ppm, a significant increase of 70 per year.
2%, usually a head average of 64.
For 4 yuan, single Q4 was restricted by the inter-provincial embargo of live pigs under the benefit of the epidemic. The advantage of Shuanghui’s inter-provincial transportation and allocation of cold fresh meat is obvious, and the average profit per season is as high as 84.
7 yuan, a sharp increase of 85 previously.
2%, a new high.
Meat products business: Revenue remains stable, expenses increase and expansion promotes transformation.
The meat product business sold 160 tons in 18 years, increasing slightly by 1 several times.
1%, income 232.
10,000 yuan, an increase of 2.
4%, of which 18-inch single season meat products sold 39 inches, a slight decrease of -2.
0%, is expected to be mainly due to the termination of control channel inventory, single quarter revenue of 55.
400 million, a slight increase of 0 previously.
6%, operating profit 10.
9 trillion, down -3 a year.
3%, the average operating profit per ton of meat products was 2822 yuan, a year-on-year decrease of -1.
3%, due to the company’s overall sales expense ratio increased by 1.
2pcs to 5.
5%, which indicates that the increase in expenses for the transition of the meat products business has been confirmed.
Multi-programme to cope with rising costs, stable growth is still expected, and we look forward to the price increase window period to stimulate channel vitality.
Facing the pressure of the 19th year of the pig cycle to enter the rapid growth channel, the company’s low-cost raw material inventory reserve has increased. It is also a plan to increase the import of US pork through Rotex. In addition, the company has raised the price of supplementary products at the end of last yearThe impact on income has reached 2.
5-3%, it is expected that in 19 years, further price increases will still be needed. Therefore, we believe that the company’s operating scale has the ability to hedge the pressure of pig price cost growth, and gradually stable growth is still expected.
However, we also hope that during the price increase window period, the company will further expand the channel profit under the reasonable adjustment to the terminal replacement, so as to adjust the dealer structure and stimulate channel vitality.
Investment suggestion: Adjust the target price to 30 yuan, and the allocation value is outstanding.
The company’s stable operating capacity is expected to hedge against cost pressure, and a multi-pronged approach will escort a steady increase in 19 years.
We adjusted the EPS forecast for 19-20 to 1.
57 and 1.
70 yuan plus 21 EPS forecast1.
87 yuan, giving 19 times 19 times PE, adjusting target price to 30 yuan, incorporating high dividend policy, outstanding allocation value, maintaining “strongly recommended-A” rating.
Risk reminder: drop in demand, impact of the epidemic, less-than-expected conversion of meat products, and substantial increase in costs