Makihara (002714) 2019 third quarterly report comment: high production capacity increase column can be expected to speed up
Core point of view In Q3 2019, the company’s productive biological assets increased by 60% and increased by 99%, indicating that the company’s sow scale has expanded rapidly; fixed assets and construction in progress have been orderly expanded.
In summary, we expect the company’s turnover to increase in 2020.
In addition, costs have now improved in September, adding to earnings flexibility.
Revise up the target price to 120 yuan, maintain “Buy” rating.
In the third quarter, 19 profits increased to 15.
The company disclosed the 2019 third quarter report.
Among them, 19Q3 realized income of 45.
700 million (with a 25% increase and 11% ring increase) and a net profit of 15.
400 million (same increase of 2.
6 times, ring increase 3 times).
According to monthly report data, the company produced a total of 2.12 million live pigs in the 19Q3 (down 27%, down 23%), and the average profit was about 728 yuan per head.
The sales volume of piglets in our feed 19Q3 company accounts for about 20% -25%, and the average sales price of commercial fat pigs is about 20.
5 yuan / kg.
Costs have now improved in September, and earnings flexibility has increased.
We tendered the complete cost of fattening pigs for the company in 19Q3 to about 14.
3 yuan / kg, an increase of about 1 from the previous month.
1 yuan / kg.
The increase in costs is mainly due to the decrease in the amount of columns, which results in higher amortization such as depreciation and expenses.
For example, the average cost of the first three items increased from 118 yuan / head in 19Q2 to 186 yuan / head in 19Q3.
However, whether the company’s fattening costs are increasing, or the absolute average of the absolute value of the company far-end replaces similar listed companies.
More importantly, combined with the 杭州桑拿网 company ‘s July-August earnings report, the company ‘s fattening pig complete cost in September has improved significantly, showing that the company ‘s cost control is excellent and its performance exceeds expectations.
Sow size has increased rapidly, and the speed of slaughter can be expected.
The company’s sow inventory has rebounded ahead of the industry as early as the second quarter.
The third quarterly report shows that the company’s productive biological assets have increased by 60% in the same period and increased by 99%, that is, its sow size has returned to the high-speed growth channel, and the speed has exceeded expectations.
At the same time, the company’s fixed assets increased by 23% and 7%, and the construction in progress increased by 81% and 15%, indicating that the pig house expansion was orderly.
Comprehensively judging the growth momentum of productive biological assets, fixed assets and construction in progress, we expect the company’s sales volume to increase to 20 million heads in 2020.
At the same time, the growth of the company’s live pig production is expected to be ahead of the industry recovery, and it will accelerate significantly. In the future, it is expected to fully enjoy the bonus period of double volume and profit.
Risk factors: Livestock and poultry prices rise more than expected; raw material prices fluctuate sharply; livestock and poultry epidemics.
Investment suggestion: The pig price continues to exceed expectations, the company’s cost control is excellent, and the channel of return to high growth is expanded. We expect the company’s profit to increase year by year.
Maintain 2019/20/21 EPS forecast to 2.
Considering the further improvement of profit certainty, the target price is revised up to 120 yuan (corresponding to only 11 times PE in 2020), and the rating of “Buy” is maintained.