Longda Meat (002726): The two wings of the breeding and meat products business are flying together and the performance is developing rapidly

Longda Meat (002726): The two wings of the breeding and meat products business are flying together and the performance is developing rapidly
The company’s highlights: 1. North China’s pig price led the nationwide increase, and the company’s breeding business benefited from the high pig price in Shandong.North China has been severely affected by non-pesticidal diseases, with early onset and thorough production capacity elimination. In June 2019, pig prices in Shandong were higher than the national average price by about 1 yuan / kg.The company currently has 500,000 pig production in Shandong Province, and it is expected to produce more than 300,000 pigs in 2019. It will fully benefit from the current and future high pig prices and achieve explosive growth in performance. 2. The productive biological assets are damaged, and there is a guarantee to expand the listing.2019Q1 The company’s productive biological assets increased by ten years.06%, a decrease of 7 from the end of 2018.41%, speaking, the company is less affected by the epidemic.The company released 13 in the first 5 months of 2019.240,000 heads, a decrease of 6 a year.76%, income 2.7.0 billion, a growth of ten years 6.15%, it is expected that the pig breeding business in the first half of the year will contribute some profits to the company. 3. Shun Fat Zhenxiang consolidated the company’s performance.In 2018, the company acquired 60% equity of Linyi Shunfa and 70% equity of Weifang Zhenxiang. The existing 70% equity acquisition of Weifang Zhenxiang has been officially completed and consolidated in 2018. The acquisition of Linyi Shunfa is still ongoing.Weifang Zhenxiang slaughtering capacity is about 3 million heads, Linyi Shunfa slaughtering capacity is 900,000 heads?1 million heads.With the smooth progress of the acquisition, the slaughter volume of the company will increase, and the consolidation of the two companies will significantly increase the company’s performance. 4. Together with Lanrun, the meat products business is expected to make a breakthrough.In June 2019, Lanrun Development became the company’s controlling shareholder; Dai Runbin, the actual controller of Lanrun Development, and Dong Xiang and his wife became the actual controllers of the company.Lanrun and its parent company Yijun Holdings have been cultivating in the southwest market for many years. In the future, it will help the company develop the southwest market and further develop the company into a national meat products company.Breaking through Lan Run’s market expansion operation and merger and acquisition experience, the company is expected to achieve a breakthrough in the meat products business. Earnings forecast: Buy rating.It is expected that the company’s breeding volume in 2019/2020/2021 will be 300,000 / 330,000 / 500,000 heads respectively; slaughter volume will increase and meat products business areas will continue to grow.It is estimated that the company’s net profit attributable to the parent in 2019/2020/2021 will be 3 respectively.09/3.92/4.40 billion, the 天津夜网 corresponding EPS is 0.41/0.52/0.58 yuan.According to the company’s breeding business, benefiting from the rapid growth of pig prices in Shandong and the rapid growth of slaughter capacity, the company is given 30 times PE in 2020, corresponding to a target price of 15.60 yuan, give a buy rating. Risk reminders: 1. Breakthrough in pork price fluctuations will have an impact on the company’s operating income and costs; 2. Blue ears and African swine fever that may occur during the breeding process will adversely affect the company’s pig breeding business;The occurrence of security incidents will have an impact on the company’s slaughter and meat products business. 4. The launch of African swine fever vaccine may interrupt the process of de-capacity production, and the company’s profitability may be less than expected.