New Hope (000876) Company Comments: Steady expansion of the pig and pig breeding sector in the feed + poultry sector

New Hope (000876) Company Comments: Steady expansion of the pig and pig breeding sector in the feed + poultry sector

Investment Highlights Event: New Hope Announces 2019 Semi-annual Report, Realizing Revenue of 352 in 2019H1.

94 ppm, a 10-year increase of 11.

54%, net profit 佛山桑拿网 attributable to mother 15.

62 ppm, an increase of 84 in ten years.

61%, net profit after deduction is 16

6.2 billion, an annual increase of 87.

14%; expected ROE is 7.

13%.

Excluding the investment income of nearly 1 billion from Minsheng Bank, the net profit of the farming and pastoral sector was attributed to the mother5.

700 million.

  The growth of productive biological assets is dazzling, and epidemic prevention and capacity expansion are proceeding in an orderly manner.

In 2019H1, the productive biological assets of the company increased by 14% compared with the end of 2018, and increased by 27% from the previous quarter, of which sow4.

200 million, corresponding to sow inventory of about 150,000.

We believe that the improvement of the company’s productive biological assets can improve the response to epidemic prevention and control and achieve a certain improvement, sow losses are effectively reduced; the transformation reflects the company’s determination to expand against the trend in the pig breeding sector.

The company’s sow inventory is expected to continue to increase in the second half of the year, and the sow inventory at the end of the year is expected to reach more than 200,000.

  Capital expenditure continued to increase, and the company’s resources continued to tilt towards the pig breeding business.

In terms of capital expenditure, the company ‘s capital expenditure in the first half of the year was 2.8 billion, of which the capital investment in hog breeding business accounted for 70% +; fixed assets + construction in progress increased by 18% month-on-month, and the number of pig farms continued to increase; in terms of team building, the company managedThe cost increases by 1 each year.

600 million, mainly used for the construction of breeding teams. At present, the number of team members has increased to over 6,000, and the personnel reserve is sufficient.

In terms of land reserve, the company currently has a land reserve of 40 million capacity.

  We believe that the company is leaning towards the hog raising business in terms of capital, personnel and land.

  The prosperity of the livestock and poultry sector continued, and the profit of feed and livestock breeding continued to rise.

In the feed sector, the company ‘s poultry feed sales increased by 20% in the first half of the year, pig feed increased by 2%, and aquatic feed increased by 16%.Chicken and duck sales increased by 12%, and the net profit of the poultry sector is expected to approach 400 million yuan.

It is judged that the high prosperity of the feed and livestock breeding sector will continue in the second half of the year.

  Based on comprehensive judgment, we expect that the number of pigs slaughtered in 19-20 is expected to reach 3.5 million / 8 million heads, with an annual growth rate of 37% / 129%.

At the same time, benefiting from the boom in poultry prices, the profitability of the poultry and feed sectors has been maintained.

We expect the company’s net profit to be 3.4 billion / 8.1 billion in 19-20, and maintain the “Buy” rating.

  Risk reminder: the risk of large-scale epidemic disease or the risk of public health security events, the price of raw materials changes sharply, and the price of pigs or chickens drops sharply.