Jin Xinnong (002548): New controlling shareholder joins the company to help the company’s pig development

Jin Xinnong (002548): New controlling shareholder joins the company to help the company’s pig development
1. A large number of industries brought by African swine fever have developed, and this round of pig cycle is expected to exceed historical cycles. This round of African swine fever has exceeded market expectations for capacity reduction.According to data from the Ministry of Agriculture and Rural Affairs, in March 2019 the number of fertile sows in the market fell by 1 month-on-month.2%, down 21% in the previous period, the current cycle of de-capacity production is much larger than in the past, and the capacity is still being de-chemicalized, and the production efficiency caused by the expansion of the epidemic is reduced (MSY declines due to intensification, and the weight of the release is reduced in advance)The highest pork gap in the current cycle is expected to reach 1,000 pounds. The rise in pig prices is expected to continue for 2-3 years. The peak price of pigs is expected to exceed 25 yuan / kg, and some regions will reach 30 yuan / kg. 2. The division of labor between new and old shareholders is clear, and the company has gradually entered a new stage of development. In January 2019, Dacheng Xinnong, the former largest shareholder of the company, signed a contract for the transfer of the company’s equity with Bay Area Liankong, and the company’s control changed. The new controlling shareholder Bay Area Liankong is a wholly-owned subsidiary of Bay Area Industry Finance, with financial strengthAnd abundant industrial resources.The new shareholders are responsible for capital and fund support, the old shareholders do a good job of R & D and management, and the new and old shareholders will join hands to guide the company’s development into a new stage. 3, the company’s pig development era is coming! 1) Sufficient breeding pig reserves: The company entered the breeding pig breeding field through mergers and acquisitions of high-quality breeding pig enterprises Wuhan Tianzong and Fujian Yichun, and then continued to increase investment to further improve the breeding layout.After the environmental retirement in the second half of 17 years, the company’s ability to breed sows has reduced to about 20,000 heads, of which the GGP core group has remained at about 2,200 heads. In addition, with the stable epidemic situation in the Northeast region, the Northeast Tieli Project has gradually entered pigs.According to the plan, the Northeast Tieli project will increase 2000 GP sows in the future, 1.440,000 PS sows. 2) Self-supporting and self-supporting are the main, supplemented by the custody business: The company’s fattening is mainly self-supporting and self-supporting, including Northeast Tieli, Nanping, Fujian; In addition, the company’s subsidiaries have newly expanded (the company directly holds 75% of the shares) to launch pigsThere are four fully managed pig farms in 西安耍耍网 2018 (a total of 6,113 sows in stock), and the total number of pigs sold under the fully managed model was 9.580,000 heads. 3) Expected period for new shareholders to support the company’s funds: At the end of 2018, the company’s asset-liability ratio rose to 63%. Although it is classified as a high level with listed companies in the same industry, considering the possibility of successive conversion of convertible bonds and the support of new controlling shareholders,The company is still expected to have potential for expansion. Taking into account the company’s original breeding pigs, the binary sow inventory is relatively excessive, combined with the development of Northeast Tieli and other projects, we estimate that the company’s slaughter volume (including trusteeship) will be about 55/100/2 million in 2019-2021. 杭州桑拿网 4. Investment suggestion: We expect the company to achieve revenue of 32 in 2019-2021.75/44.63/69.690,000 yuan, achieving net profit attributable to mothers1.08/4.92/9.880,000 yuan, the corresponding EPS is 0.26/1.17/2.34 yuan / share.Considering the company’s future growth and pig boom cycle, 10-15 times PE is given in 2021, with a target range of 23.4-35.1 yuan, “Buy” rating. Risk reminder: Epidemic risk; Expansion of production capacity is less than expected; Pig price does not meet expectations; Raw material price risk; Goodwill impairment risk; Fund chain break