Shuanghui Development (000895) 2019 Interim Report Review： Performance Exceeds Expectations but Long-Term Improvement
Shuanghui Development (000895) 2019 Interim Report Review: Performance Exceeds Expectations but Long-Term Improvement
Investment Highlights: Event: The company released its semi-annual report for 2019 and achieved 254 revenue in 19H1.
5.5 billion, a ten-year growth of 7.
3%, net profit attributable to mother 23.
8.2 billion, 0 in the previous decade.
2%, of which 19Q2 achieved revenue of 134.
8.1 billion, an increase of 15 in ten years.
5%, net profit attributable to mother 11.
02 billion, the previous decade 16.
58%, the company’s performance growth rate was lower than market expectations.
Investment rating and estimation: Due to the rapid increase in cost pressure, the company’s performance exceeded expectations, and the earnings forecast was lowered. It is expected that the EPS for 2019-2021 will be 1.
56 yuan, 1.
73 yuan, 1.
9 yuan (previously was 1.)
6 yuan, 1.
82 yuan, 2 yuan), with an annual increase of 4.
5%, 10%, the current sustainable corresponding PE for 2019-2021 is 14x, 13x, 12x.
We believe that: 1. The swine fever epidemic in Africa will reshape the slaughter industry. The leading 西安耍耍网 position of Shuanghui will continue to strengthen, and the city’s market share and profit elasticity will steadily increase in the future. 2. The adjustment of the meat product structure is feasible, and the trend of improving income is stillOK; 3, cost-side pressure exists objectively, but the company will strengthen its ability to suppress cost changes; 4, current forecast substitution, high dividend advantage; therefore, we are still optimistic about the company’s mid- and long-term improvement trend and maintain a buy rating.
In 19Q2, the slaughtering volume increased by 16%, and the revenue increased by 16%. It is expected that the volume will rise steadily in the second half of the year to release the profit elasticity, and the medium and long-term share will increase steadily.
19H1 slaughter income 150.
3.8 billion, an increase of 8% over the same period, of which, foreign exchange revenue was 127.
1 billion, a 10% increase in ten years, and inward revenue23.
2.8 billion, a decline of 3% before, the increase in foreign trade income was mainly due to rising pork prices.
Looking at the demolition volume and price, the slaughter volume of 19H1 was 8.58 million heads, a year-on-year increase of 4%, and the sales volume of fresh produce increased by 74%, which was a continuous decline of 3%. The ton price of fresh produce increased by more than 13%.Suppressing part of the demand, the growth rate of slaughtering faster than the growth of foreign sales was mainly due to the increase in frozen meat inventory.
19H1 slaughter gross margin 10.
47%, an increase of 0 every year.
With 18 units, slaughtering profits remained at historically high levels.
19Q2 slaughter income 80.
3.1 billion, an increase of 16% over the same period, of which, foreign exchange revenue was 7 billion, an increase of 27% over the same period, and inward revenue was 10.
5.5 billion, down 25% before.
In terms of demolition volume and price, the slaughter volume of 19Q2 was 3.85 million heads, which decreased by 12% each time. The sales volume of fresh produce was 37%, a decrease of 6%, and the ton price of fresh produce exceeded 36%.Demand, slaughtering volume decline is mainly due to the rapid increase in co-existing pig prices, reducing inventory reserves.
19Q2 Slaughtering operating profit 2.
9.1 billion, an increase of 12% over the same period, operating profit margins are basically flat each year, and average profit remains high.
Looking ahead, as African swine fever suppresses consumer demand, hog supply decreases, and frozen meat reserves increase, it is expected that there will still be some pressure in the slaughter volume in the second half of the year, but the incremental slaughter volume can still achieve several figures. The slaughter profit growth rate willObviously faster than the slaughter volume growth rate, slaughter profit margins will remain high.
In the medium to long term, the slaughter industry will be reshaped under the African swine fever epidemic. Shuanghui’s market share will steadily increase, and its profit elasticity will continue to be released.
In 2Q19, the volume of meat products fell and the price rose, and the income increased by 4%. It is expected that the pressure of rising prices and prices will ease in the second half of the year.
19H1 meat products revenue was 11.9 billion yuan, an increase of more than 4%.
21%, of which, sales are flat each year, and the ton price has increased by more than 4%.twenty one%.
19H1 meat products gross margin 26.
33%, a decline of 3 per year.
66 single, the main reason for the decline in gross profit margin of meat products is a significant increase in costs.
2Q19 meat products income 60.
3.9 billion, an annual increase of 4.
26%, of which sales volume decreased by 2%, the ton price exceeded the increase by 6.
The 5% decrease in sales was mainly due to the incomplete balance of the price increase strategy, and the increase in ton price increased significantly, mainly due to three direct price increases (end of last year, April and July this year) and structural improvements.Increase seasonally.
The average profit per tonne of meat products in 2Q19 decreased by 22% per year, mainly due to the rapid increase in raw material costs (two pig prices, more cost pressure from rising chicken prices).
Looking ahead, the upward pressure on costs is objective, but the company has taken various measures to deal with cost pressures, and the realization will continue to increase quarter by quarter. It is expected that the cost pressure in the second half of the year will improve compared to the second quarter.
On the income side, through the adjustment of price increase strategies, the superimposed price increased, and the elasticity of meat product income increased.
In the medium and long term, the pressure on the cost side of meat products is recovering. The company will continue to strengthen its ability to suppress cost fluctuations, and the improvement trend on the income side is still good.
Highest performing catalyst: Higher-than-expected revenue and profit growth Core assumptions Risk: Food safety incident