Makihara (002714): Performance in line with expected production capacity elastic leading

Makihara (002714): Performance in line with expected production capacity elastic leading industry

Core point of view: Benefiting from the change in the pig cycle, the company’s performance has grown.

The company released its 2019 annual report, and the company achieved revenue of 202 in 2019.

2.1 billion (+ 51% YoY), net profit attributable to mother 61.

1.4 billion (yoy + 1075%), the increase in revenue and profit growth mainly comes from the pig cycle conversion; after deduction is 59.

US $ 3.8 billion, non-recurring gains and losses mainly come from government subsidies, etc .; the asset-liability ratio is 40%, which has dropped about 14 shares in a row; minority shareholders’ equity is about US $ 8.6 billion, an increase of 507%.

Dividend plan: 5 for every 10 shares.

5 yuan (including tax), increase 7 shares.

Cost control continues to lead the industry, with an estimated average profit of about 580 yuan in 2019.

According 天津夜网 to the company’s annual report, the company’s live pig sales in 2019 were about 10.25 million heads, which decreased by about 6 every few times.

9%; of which, sales of commercial pigs / piglets / breeders were 867 respectively.

91/154.

71/2.

710,000 heads.

The company’s cost control ability continues to lead the industry, and the company’s average profit is estimated to be about 580 yuan.

Productive biological assets will grow by 162% per year, and high growth is expected in 2020.

The company continued to upgrade and reform pig houses, while adopting artificial intelligence technology to comprehensively improve the level of disease prevention and control.

The company’s reasonable planning funds, and actively dating Huanenggui Chengxin Trust Co., Ltd., central enterprise poverty-stricken industrial investment funds and other strategic partners.

In terms of personnel, the company introduced more than 20,000 people through various channels to make good personnel reserves.

As of the end of 2019, the number of the company’s wholly-owned and holding subsidiaries has reached 138, distributed in 18 provinces and autonomous regions (the first layout of Guangdong, Guangxi and other southern provinces); the balance of productive biological assets is about 38.

3.5 billion US dollars, an annual increase of 162%, corresponding to about 1.28 million heads of fertile sows and about 720,000 heads of reserve sows. The total balance of fixed assets + construction in progress was about 27.5 billion US dollars, an increase of 59.

4%.

According to the company’s annual report, the company plans to produce 1750 pigs in 2020?
20 million heads, an increase of 71%?
95%.

Investment suggestion: Maintain “Buy” rating.

The company’s control level is leading in the industry, and the growth of the listing is outstanding. It is expected to fully benefit the high prosperity of the industry. The company’s EPS is expected to be 14 in 2020-21.

93/10.

59 yuan / share.

Taking into account the industry average assessment and the company’s capacity elasticity advantage, the PE in 2020 is about 9 times, which is equivalent to a reasonable value of about 135 yuan / share, and maintains a “buy” rating.

Risk warning: pig price fluctuation risk, epidemic risk, food safety, etc.