Shanghai Meilin (600073) In-Depth Report: Focusing on the Main Business and Strengthening Meat Breeding
The key points of investment focus on the main meat industry and improve the upstream breeding layout.
(1) The company is a meat and meat professional platform of Guangming Group. In recent years, it has continuously focused on the main business layout of the pork and beef industry chain. In 2019, it is expected to produce about 1.2 million live pigs (approximately 670,000 equity), and the maximum downstream slaughter capacity is about 1.8 million.First, the annual 杭州夜网论坛 sales volume of chilled pork is about 21 tons.
(2) The sales scale of beef business is about 120 billion. At present, New Zealand silver fern is still in the brand promotion period. In the future, it will deepen the domestic high-end market and increase the brand premium.
(3) The company’s downsizing has gradually come to an end. In 2019, it will continue to clean up non-main business assets and rationalize its operating structure.
Marketing achieved results, and the profitability of old brands improved.
The canning business has actively expanded online, offline and overseas channels. In 2018, its revenue accelerated by nearly 10pct, and its gross profit margin increased by 3.
5 points; the effect of comprehensive food innovation and marketing is obvious, and the gross profit margin increases by 7.
0pct, Guanshengyuan net profit 1.
900 million, a year-on-year growth of about 20%.
The profitability of the canned food and integrated food segment has steadily improved, contributing to the company’s stable cash flow.
The pig cycle is reversed, breeding is expected to increase in volume, and the prospect of imported beef is promising.
The turning point in pig prices has passed. In the first half of the year, the number of pigs in the slaughtering system will decrease the historical record of the decline in the number of pigs that can be propagated.
The epidemic has forced the industry to slaughter on-site and develop cold chain transportation. The company’s slaughter layout is in the main sales area of the Yangtze River Delta and will benefit in the long run.
As for the domestic supply and demand gap for beef, the profitability of the company’s beef and mutton business will improve with brand promotion.
Investment suggestion: The company’s core business is meat, and it will continue to develop its upstream layout in the future. The breeding sector is expected to bring performance elasticity with the transformation of the pig cycle.
Many long-established brands of snack foods have significantly improved their profitability.
In addition, the company actively manages losses and transfers non-main business companies, which gradually reduces related performance drag.
We expect the company 2019-2021 EPS: 0.
75 yuan, based on the closing price on May 6, the corresponding PE is 22.
5 times, given a “prudent overweight” rating.
Risk reminders: Enterprise collaboration fails to meet expectations, food safety risks, fluctuations in pig prices, and epidemic risk.