Shuanghui Development (000895)： Q2 pig price grows rapidly, company’s short-term profit is under pressure
03/30/2020 | 桑拿 | No Comments
Shuanghui Development (000895): Q2 pig price grows rapidly, company’s short-term profit is under pressure
Event: The company announced the 2019 Interim Report, with a total operating income of 254 in the first half of the year.
5.5 billion yuan, an increase of 7.
26%, net profit attributable to mother 23.
82 trillion, the same minus 0.
16%, ROE is 17.
55%, EPS is 0.
Of which Q2’s total operating income was 134.
81 trillion, with an increase of 15.
50%, net profit attributable to mother 11.
Affected by the rapid rise in pig prices, Q2 slaughtering volume and head profit increased.
2019 H1 company slaughter income is 150.
3.9 billion, an annual increase of 7.
79%, with a slaughter volume of 857.
790,000 heads, an increase of 3 per year.
According to data from the Ministry of Agriculture, affected by African swine fever, the number of pigs slaughtered in the first half of this year fell by 25.
8%, promote the rapid growth of pig prices, the company’s Q2 slaughter volume of 385.
09 million heads, a decrease of 11 a year.
57% in the second quarter.
47 yuan, an increase of 16 yuan per year, a decrease of 38 yuan.
Although the company 厦门夜网 has used a small amount of low-priced inventory, its head-to-head profit has still significantly narrowed.
In the first half of the year, due to the Sino-US trade friction, the tariff rate on imported frozen meat was increased to 62%, which affected the company’s frozen product imports.
However, since August, the price of hogs has continued to rise and has reached a historical high of 22 yuan / kg. While further increasing the cost pressure of the company, it has also widened the hog price gap between China and the United States, even in the case of considering the impact of tariffThe cost advantage of pork imports in the United States is also becoming more and more obvious. It is expected that the company’s frozen product imports in the second half of the year are expected to increase, stabilizing pressure on cost growth.
Optimization of high-temperature product structure and cost increase profitability of front-end meat products.
In terms of meat products, 2019H1 total revenue was 119.
3.0 billion, an annual increase of 4.
21%, of which high-temperature products income 76.
6.5 billion, an annual increase of 7.
52%, low-temperature product income 42.
38 billion, a ten-year average of 1.
29%, high temperature products perform better, while low temperature products are still in the adjustment stage.
The overall sales of meat products in the first half of the year were basically unchanged from the same period last year, of which Q2 sales were about 40 inches.
In terms of ton prices, due to two price increases in 2019H1, coupled with better promotion of new products of high temperature products, and optimization of product structure, the ton price of meat products increased by 4pct in the first half of the year, but due to the increase in costs, it still faces profitability of meat products.Capacity, the operating profit of meat products in the first half fell 16.
80pct to 19.
Earnings forecast and investment suggestions: Reduce the company’s EPS for 2019-2021 to 1.
89 yuan, corresponding to PE is 14X / 13X / 12X. Due to the impact of African swine fever on the company’s cost end in the short term, the company’s level is adjusted to “overweight” level.
Risk warning: food safety risks, African swine fever epidemic intensifies