Tiankang Biotech (002100): High growth multiplier effect of pig prices on the upward overlap of the bar can be expected

Tiankang Biotech (002100): High growth multiplier effect of pig prices on the upward overlap of the bar can be expected

1. The event company issued a notice of the first quarter of 2019.

2. Our analysis and judgments 1) Affected by the sluggish pig prices in Xinjiang and Henan, the performance of 19Q1 dropped significantly in the first quarter of 2019. The company expects net profit attributable to its mother to be about 1381.

310,000 to 3038.

890,000 yuan, a year-on-year decrease of about 45% to 75%, mainly due to the impact of the African swine fever epidemic, the decline in pig prices has penetrated, resulting in a decline in profits.

According to statistics from China Animal Husbandry Information Network, the average pig price in 22 provinces and cities in 2019Q1 was 12.

96 yuan / kg, a decrease of 0 over the same period last year.

82%.

According to Boya and News statistics, the average price of pigs in Henan in Q1 2019 in Xinjiang was 10.

54 yuan / kg, 12.

45 yuan / kg, a decrease of 13 over the same period last year.

.

88%, 3.

94%.

The company’s production capacity is mainly distributed in Xinjiang and Henan. The local pig price has dropped significantly, and its performance has been affected to some extent.

2) The pig price has started an upward cycle, and the upward trend is not afraid of regional differences. On February 1, 2019, the average hog price will gradually start an upward trend, and it will increase by 33 on March 29.

75%.

Benchmarking the previous cycle, pig price was high (2015.

3.

13, 11.

6 yuan / kg) and W-type secondary bottom (2016.

6.

3, 21.

2 yuan / kg) rose about 四川逍遥网 82.

76%.

Considering that the productivity of the current cycle due to African swine fever is stronger than that of the previous cycle, and the elimination is still ongoing, we believe that the increase has reached at least 100%.

According to the above judgment, the short-term fluctuation of pig prices does not need to be over-allocated, and the future increase cannot be underestimated.

We observe the changes in pig prices in Xinjiang in the last cycle. The pig prices were high (2016.

6.

7, 20.

5 yuan / kg) and W-type secondary bottom (2015.

3.

18, 9.

5 yuan / kg) than the national market for five consecutive days, an increase of 115 during the period.

79%, and ranked the highest point in the national pig price, Xinjiang pig price high is about 3.
.

3%, not much.

Therefore, we don’t think it is necessary 成都桑拿网 to over-allocate the difference between Xinjiang pig prices and national pig prices, and there is not much difference in the upward cycle.

We are optimistic about the elasticity brought by the performance of the company on pig prices in the coming year.
3) The number of pigs on the market has increased rapidly, and the multiplier effect can be expected to increase the number of sows in the company by about 4 in 18 years.

20,000 heads, of which Xinjiang 2.
50,000 heads, Henan 1.

70,000 heads; plans to expand to 5 in 2019.

50,000 heads, including 30,000 heads in Xinjiang and 2 in Henan.

50,000 heads.

At present, the company’s psy is about 25. We estimate that the company’s live pig production will be about 1 million in 2019, of which about 700,000 in Xinjiang. According to market conditions, all pigs can be fattened. The company also has a certain capacity of hardware facilities; Henan’s production is 30. There are 10,000 heads, of which about 200,000 are fattening pigs, and the rest are piglets and sows.

The company takes steady progress as the main strategic rhythm. We are optimistic about the multiplier effect brought by the 55% increase in slaughter volume to the elasticity of pig prices. The company’s subsequent performance is expected to grow rapidly.

3.Investment suggestion that the annual pig price will start an upward trend. Due to the impact of African swine fever, production capacity will be severe and will continue. This time, the price elasticity will exceed that of the past. In benchmarking historical data, we find that during the upward period of pig prices, there is no significant difference in regional growth.The combined company’s volume of listings has maintained a rapid growth. We are very optimistic about the market price of pig prices and the effect of the listing multiplier on the performance.

We expect the company’s 2018-2020 EPS to be 0.

33/0.

50/0.

69 yuan, corresponding PE is 27/18/13 times, maintaining the “recommended” level.

4.

Risks indicate the risk of hog price fluctuations, hog production volume may not meet expectations, epidemic risk, raw material price fluctuation risks, policy risks, etc.