Zhengbang Technology (002157) Annual Report Comments: The rapid growth of the number of listings, the cycle reversal is extremely flexible

Key Investment Events: Zhengbang Technology announced its 2018 annual report.

The company achieved revenue of 221 in 2018.

1.3 billion (+7.

27%), net profit attributable to mother 1.

9.3 billion (-63.

21%), after deducting non 2.

2.3 billion (-57.


Among them, the fourth quarter: the company’s revenue was 45.

2.8 billion (+28.

64%), net profit attributable to mother 1.

5.8 billion (+34.

60%), after deducting non 1.

5.9 billion (+32.


The company plans to distribute a cash dividend of 0 for every 10 shares.

4 yuan.

In the first quarter of 2019, revenue was 51.

9.4 billion (+4.

74%), net profit attributable to mothers can be reduced.

1.4 billion (-743.

42%), doubt after deduction 3.

5.9 billion (-622.


The number of listings is increasing rapidly, the cost trend is decreasing, and the dispersion of production capacity is relatively less affected by the epidemic.

In 2018, the company sold 5.54 million pigs, an increase of 62% year-on-year.

The company’s production capacity is relatively wide, and it is relatively affected by swine fever. It is estimated that 5.24 million pigs will be slaughtered throughout the year, with an average price of about 12.

47 yuan / kg, the full cost is about 12.

51 yuan / kg, heads can accept 1.

1 yuan, fat pigs are expected to be about 0.

0.6 billion.

It is expected that the number of piglets on the market will be 320,000, with an average profit of 89 yuan, and the piglets will earn 南京桑拿网 about 0.

300 million.

Initial farming is estimated to contribute a profit of 0.

2 trillion, feed, pesticide, veterinary medicine estimated net profit is about 1.

8 billion.

This year, government subsidies have decreased, and non-current asset disposal has resulted in gains and losses. In 2018, non-recurring gains and losses were -0.
300 million.
Steady growth is progressing steadily and is expected to support rapid expansion.

The company plans to increase US $ 10 million for the development of hog breeding business and repayment of bank loans. At present, it has responded to the feedback from the CSRC.

In recent years, the company is in a period of rapid expansion. In the first quarter of 2019, the asset-liability ratio was 69%, and financial expenses increased. If the increase is expected, it is expected to support rapid expansion in the future.

According to the company’s assets, we expect that the number of listings in 2019 is expected to reach 8 million heads.

The worst quarterly report for the first quarter of 2019 has passed, and the future performance is huge.

Affected by the epidemic, the company increased its expenditure on biosafety prevention and control in the first quarter, and related costs exceeded US $ 100 million. The cost end was penetrated by the impact, resulting in a decrease in quarterly reports.

1.4 billion.

The company produced 1.69 million live pigs in 2019Q1, and 1.63 million fat pigs are expected to be sold at an average sales price of 11.

2 yuan / kg, the full cost of 13.

5 yuan / kg, heads are expected to 253 yuan, fat pigs about 4 in advance.

100 million; piglets are expected to be released 5.

80,000 heads, with an average price of 28.

5 yuan / kg, piglets are marginal.

The quarterly report is the worst time for the industry and the company.

The epidemic situation has caused the industry’s production capacity to exceed historical extremes, and there is a general shortage of pigs in the country. Pig prices are expected to reach a record high.

The de-capacity of the industry is accelerating, and the pig price is expected to increase after 2019Q2.

After the holiday, the price of pigs in the North has recovered, the epidemic situation in the South has intensified, and retail investors are still sluggish.

In March, the number of live pigs on the market was reduced by 19% and 21%, which was a record high in February. In recent months, the sales volume of feed for pigs can be reduced by about 10-15%.The sales volume of piglet feed is about to double by about 15-20%. We expect the inventory to drop or further decline in the next two months. From Q2 2019, pig prices are expected to usher in a second wave of rapid growth.

Investment suggestion: The company’s listing will grow rapidly, the cost trend will decline, and the profit of other sectors will be stable.

At present, the low price of pigs has passed, and the cycle shift has shifted to the right. The company’s performance is very flexible.

We adjusted the company’s EPS for 2019-2021 to 0.

88, 3.

23, 4.

01 yuan, based on the closing price on April 19, 2019, the corresponding PE is: 21.

7, 5.


7x, maintain “Buy” rating.

Risk reminder: epidemic risk, fluctuation in pig prices, less than expected production volume, rising raw material prices.