Shuanghui Development (000895): Structural upgrades continue to face challenges and possibilities

Shuanghui Development (000895): Structural upgrades continue to face challenges and possibilities

Event: The company released its 2018 annual report: 2018 achieved operating income of 487.

6.7 billion, down 3 each year.

32%; realized net profit return to mother 49.

1.5 billion, an increase of 13 in ten years.


The company plans to distribute 5 for every 10 shares.

The 5 yuan plan carries cash dividends.

Revenue from slaughtering business declined, and swine fever still suppressed slaughter volumes.

In 2018, the company slaughtered 16.31 million pigs, an increase of more than 14.


Q4 slaughtered 杭州夜网 4.28 million pigs, surpassing the rise by 2.


In the fourth quarter, the company’s slaughter volume growth rate expanded, and slaughter business was still suppressed by the African swine fever epidemic.

Revenue from Q4 slaughtering business74.

62 ‰, ten years ago 6.


In addition to the decline in slaughter volume growth, as the price of pork in Q4 declined from the same period last year, the revenue of slaughter business declined.

We estimate that the average gross income of pigs in Q4 company is 1745 yuan / head, which is 12 lower than Q3.


Revenue from meat products business remained stable, and structural upgrades continued.

160 advance sales of meat products business, an increase of 1 each year.


The company’s meat products business achieved operating income of 55 in the third quarter alone.

390,000 yuan, an increase of 0 in ten years.


The company’s gross profit margin for meat products business in 2018 was 30.

29%, a slight decrease of 0 compared with the same period last year.

twenty one%.

The company’s single-quarter sales expense ratio has increased, and it has continued to increase its efforts in the promotion of high-end new meat products.

The challenges and possibilities of the swine fever event coexist, and there is confidence to cope with the increased costs.

The cost pressure brought by the 2019 pig cycle to enter the upward channel, the company responded through a variety of programs: control the cost of meat products by increasing the import of low-cost pork.

In addition, in response to the trend of pork price increases, some of the company’s products increased prices at the end of last year. It is expected that there will still be room for price increases in Q2 / Q3.

We believe that this round of swine fever incident is a challenge for the company as well. The upstream production reduction caused by the swine fever incident will also accelerate the integration of the industrial chain, or accelerate the release of profits from the meat products business.

Earnings forecasts and investment recommendations are often affected by swine fever and pork price fluctuations, but we believe that the company, as a leader in the meat product industry, is gradually reducing its cost-capacity changes. Short-term disruptions will not affect long-term operations.

The EPS for 2019-2021 is expected to be 1.

63 yuan, 1.

77 yuan, 1.

88 yuan, corresponding to 15 for 夜来香体验网 2018-2020 PE.5 times, 14.

3 times, 13.

5 times.

Maintain the company’s “Buy” rating.

Risk warning: sharp changes in pig prices; food safety risks; product promotion is less than expected.