Haida Group (002311) 2018 Annual Report Commentary: Steady Aquatic Materials + Poultry Feed Force 2018 Completed

Haida Group (002311) 2018 Annual Report Commentary: Steady Aquatic Materials + Poultry Feed Force 2018 Completed

Despite the poor profitability of pig feed and the improvement of the pig farming business, the company’s aquatic feed has grown steadily, and the amount of poultry feed has risen steadily. It still achieved profitability in 201814.

400 million, an increase of 19%.

It is expected that the company’s feed sales volume will maintain a high growth of about 20% in the next three years, and the gross profit margin forecast will increase 佛山桑拿网 significantly from 2020. At the same time, the hog breeding business may benefit from the upward cycle and show high profit elasticity.Target price to 34 yuan, maintain “Buy” rating.

18 profit in the fourth quarter1.

6.6 billion, an increase of 187%.

In 2018, the company achieved operating income of 421.

600 million (same increase of 29.

5%), attributable net profit of 14.

400 million (same increase of 19%).

Among them, 18Q4 realized revenue of 11.3 billion (same increase of 87%), attributable net profit1.

6.7 billion (same increase of 187%).

The performance was in line with expectations.

Aquatic feed and poultry feed are the main profit growth points.

In 2018, the company’s revenue growth was mainly driven by: 1) the increase in feed sales (a 27% increase), the increase in raw material costs leading to feed price increases, and the increase in feed income (a 32% increase); 2) the expansion of poultry meat processing businessIn 2018, the income reached 5.

6.5 billion (same increase of 279%).

Our profit breakthrough for the company in 2018 is as follows: 1) Aquatic materials: Sales volume increased by 26% to 311, and it is estimated that it will contribute a profit of 1 billion -10.

500 million (with an increase of 25% -30%). The main driving force for growth is the upgrade of protein consumption to promote the growth of high-end ingredients, the low-price strategy to increase the market share of fish ingredients, and the growth of overseas markets.

2) Poultry materials: sales volume increased by 19% to 527 exchange rate, and increased gross profit margin, estimated to contribute 2-2 profit.

500 million (with an increase of 100% -150%). The driving force for sales growth was mainly due to the migration of leading households caused by Guangdong Environmental Protection. The company successfully covered new markets by building new factories. The driving force for the increase in gross profit margin was mainly due to the profitability of poultry chain farming.

3) Pig feed: Sales volume increased by 53% to 232 months. Due to the decline in profit margin, it is estimated to contribute 0 to profit.

500 million to 100 million US dollars (10-year decline). The main driving force for sales growth is new production capacity and mergers and acquisitions. The decline in profit margins is mainly due to poor profitability of pig farming. The company has profited in order to expand into new markets.

4) Pig breeding: The amount of slaughtering increased by 56% to 700,000 heads. Due to the sluggish pig price, it is estimated that there are 30 million to 50 million yuan, of which 200,000 to 250,000 heads will be released in Q4.

5) Profits from animal health insurance, seed and other businesses1.

About 500 million.

The main business is stable and the pig raising is upward, and the profit promotes accelerated growth.

The upgrade of protein consumption is expected to continue to drive the company’s high-end feed sales to maintain high growth in the next 2-3 years. The high level of poultry chain + the company’s high city share in poultry feed will continue to drive the company’s poultry feed sales to continue to increase. Africa swine feverThe impact of the company ‘s growth in pig feed sales may have slowed down first. We comprehensively estimate that the company ‘s feed sales will maintain a sales growth of about 20% in the next three years.

At the same time, affected by the reversal of the pig cycle and transformation, the company’s pig breeding business is expected to show high performance elasticity. As a result, the expected increase in poultry and fish prices will drive the company’s feed gross profit margin to increase significantly in 2020.

Risk factors: The sales volume is not up to expectations, the risk of fluctuations in raw material prices, abnormal weather, etc.

Investment suggestion: Feed sales are expected to maintain high growth. It is expected that feed gross margin will be under pressure in 2019 and will improve from 2020. The pig breeding business plan will show high performance elasticity in 2019/20.

We maintain our EPS forecast for 20191.

23 yuan, raised 2020 EPS forecast 佛山桑拿网 to 1.

78 yuan (was 1).

52 yuan), plus EPS forecast for 2021 is 2.

26 yuan.

Taking into account the company’s high profit forecast in the next two years, with reference to the company’s historical assessment level, it will give a PE estimate of 28 times in 2019, raise the target price to 34 yuan, and maintain a “buy” rating.