Shengnong Development (002299): Chicken prices continue to boom and industry leaders increase profits

On the evening of October 18, the company released the third quarter report for 2019.

  On January 9, 2019, the company realized operating income of 103.

110,000 yuan, an increase of 27 in ten years.

99%; net profit attributable to shareholders of the listed company is 27.

50,000 yuan, an increase of 236 in ten years.

34%; net profit attributable to shareholders of listed companies in place of non-recurring gains and losses was 27.

500,000 yuan, an increase of 248 in ten years.


  By quarter, 2019Q1 / Q2 / Q3 company operating income was 30.



57 trillion, +31 for each year.

17% / + 27.

64% / + 25.

81%; net profit attributable to mothers is 6.



53 trillion, 414 changes a year.

14% / 380.

75% / 124.

twenty four%.

  The company expects that the net profit range for 2019 will be about 37.


05 ppm, with an increase of 146.

10% -152.


  Our analysis and judgment are high in the industry. The company’s performance is growing. The company’s main business is broiler breeding, broiler slaughtering and processing, and food deep processing.

In the first three quarters of 2019, affected by tight chicken supply and demand substitution, the industry’s prosperity continued to rise, and the prices of broiler and chicken products continued to rise and remain unchanged. According to Boya and News data, 2019Q1-3 white feather chicken prices9.

53 yuan / kg, an increase of 18 in ten years.

24%, the comprehensive price of chicken products 11.

94 yuan / kg, an increase of 20 in ten years.


  The profitability of the company’s integrated whole industry chain is prominent, and the sales price of the company’s products has increased significantly.

The company continued to consolidate and strengthen internal fine-grained management. Operating costs and expenses were effectively controlled. The scale effect and management advantages of the Shengnong model gradually emerged.

The reported company realized a net profit attributable to the parent of 27.

50,000 yuan, an increase of 248 in ten years.


  Profitability has improved significantly. During the period, the expense ratio decreased. In terms of profitability, the company’s gross profit margin in Q1 2019 was 32.70%, an increase of 15 per year.

36 points; net margin is 26.

50%, an increase of 16 per year.

34 points.

In terms of quarters, 2019Q1 / Q2 / Q3 gross profit margins were 28.

69% / 34.

37% / 34.

47%, with a net profit of 22.

04% / 28.

82% / 28.


The improvement in profitability is mainly due to the continued increase in the price of chicken meat, coupled with the company’s strengthening of internal controls, production and operation efficiency has increased, and production costs have fallen.

  In terms of period expenses, 2019Q1-3 company’s selling expenses subsidy2.

62%, a reduction of 0 per year.

50pct; management and R & D expenses 1.

43%, a reduction of 0 per year.

25pct; financial expenses1.

26%, a reduction of 0 per year.

75 points.

The decrease in expense ratio was mainly due to the increase in sales revenue and the increase in amplitude caused by the rise in chicken prices.

  Supplementary pork feed is expected to be strong in chicken production and sales in 2020. The high price will correspond to the number of sows that can be propagated. The amount of commercial pigs will be released after 10 months. According to data from the Ministry of Agriculture and Rural Affairs, the number of sows that can be propagated in September 2019 is at leastDecrease 38.

9%, a decrease of 2 from the previous month.

8%, so we believe that by the first half of 2020, the situation of supplementary pigs remains difficult to change, chicken is the main force of residual animal protein residues, and we expect that prices will continue to run at a high level in 2020 as demand for chicken meat rises.

  Investment suggestion: We expect the company’s operating income to be 143 in 2019-2020.

03 ppm and 160.

42 ppm, an increase of 23 per year.

87% and 12.

16%; net profit is 37.

46 ppm and 38.

44 ppm, with annual growth of 148.

82% and 2.

63%, corresponding P / E is 8 respectively.

8x and 8.

5x, maintaining the “overweight” rating.

  Risk reminder: chicken 武汉夜生活网 meat price fluctuation risk; raw material price fluctuation risk; risk of epidemic disease.