Shuanghui Development (000895): Net profit peaked and fell temporarily to prudent recommendation

Shuanghui Development (000895): Net profit peaked and fell temporarily to prudent recommendation

19Q2 net profit level, cost-side pressure is clearly reflected, the net profit margin peaked and fell.

The company’s 19H1 revenue was 254.

6 ppm, a ten-year increase of 7.

3%, net profit attributable to mother 23.

800 million, a year down -0.

16%, of which single Q2 income 134.

80,000 yuan, an increase of 15.

5%, net profit attributable to mother 11.

0 million yuan, down -16.

6%, the sharp increase in pig prices in the second quarter is obviously reflected in the pressure.

Single Q2 gross margin of 18.

2%, a significant decrease of -4.

9 pieces, in addition to the effect of pig prices, chicken meat prices have a significant impact over the existing, sales expense ratio of 5.

2%, a decrease of 0.

5pc, under the pressure of cost, the margin of investment has slowed down, and the net interest rate has dropped to 8.

2%, fell to the lowest point in the historical upward cycle of pig prices.

Inventories continued to increase sharply to 7重庆耍耍网2 at the end of the second quarter.

0 million yuan, still reserves raw materials for subsequent cost growth, including chicken and other production materials.

  Increasing prices of meat products contributed to revenue, and cost pressures significantly suppressed earnings.

The meat product business had a single-quarter revenue of 60 in 19Q2.

4 ‰, an annual increase of 4.

3%, sales are expected to be flat, growth from the end of last year to the present three price increases contributed by operating profit9.

700 million, a sharp decline of -23.

3%, because the cost side is still in the upward channel, the raw material side and the inventory reserve stage, so Q1 reserves low-cost pork raw materials have not yet been released, Q2 pig price and chicken price raw material cost pressure is concentrated, the average profit per ton is estimated to fall to 2470 yuan/ Ton.

  The slaughter volume has dropped under a high base, the average profit in a single season has dropped significantly from the previous month, and the margin of profit elasticity has narrowed.

19Q2 slaughtered 4.73 million heads, surpassing the drop of -9.

3%, fell under a high base, slaughtering business single-quarter external income of 69.

8% ten percent, an annual increase of 26.

9%, single quarter slaughter operating profit 2.

900 million, an increase of 11 in ten years.

4%, the average profit in a single season is 95 yuan, a significant drop from the previous month, the profit margin of slaughtering business narrowed.

  In the next year, the net profit margin will still be under pressure, but the company will take multiple measures to avoid gradual profit, and look forward to the transformation of meat products.

The company’s rising cost pressure during the year is within expectations. However, due to tariffs in the second quarter, the volume of imported pork at low prices has not increased, increasing the price of chicken, and the cost pressure exceeded expectations.

The pig price is still in a cyclical growth channel in the second half of the year, and the cost-side pressure is still continuous. It is expected that the net interest rate in the coming year will still be under pressure.

The company hedges cost-side pressure by releasing low-cost raw material inventory, adjusting product structure, price increase effects and other methods. As a leading enterprise in the integration of meat products and even fast-moving consumer goods industry chain and first-rate operating efficiency, it is expected that it can still ensure through various measuresThe initial performance is stable and will not lead to further breakthroughs.

Despite the cost pressure, we still hope that the company can balance the transition of meat products and short-term cost pressure, further adjust its business thinking, grasp the transition period of the new catering industry model, and set the foundation for the long-term and stable development of meat products.

  Investment suggestion: temporarily lowered to “Careful Recommendation-A”, with a target price of 22.

5 yuan, focus on value to buy.As costs continue to grow faster than expected, and short-term breakthroughs in the transition of meat products break through, we expect the company’s net profit margin to decline slightly in the coming year.

Therefore, we lower our EPS forecast for 19-21 to 1.

49, 1.

51 and 1.

64 yuan (1 time before).

57、1.

70 and 1.

87 yuan), temporarily lowered the rating and target price to 22.

5 yuan, corresponding to 15 times PE in 20 years.

The recent decline in estimates has reflected the pessimistic expectations of lower profitability. The company is still a company with first-class operating efficiency in the food and beverage sector. It is looking forward to a successful switch in the growth stage, resulting in a higher yield. In the process of continuous decline, it is still recommended to invest in the long term.Followers.
  Risk warning: demand continues to fall, meat products are less than expected, and costs have increased significantly