Shanghai Meilin (600073): Stable operation in 1Q19 continues to pay attention to the benefits of rising pig prices

Shanghai Meilin (600073): Stable operation in 1Q19 continues to pay attention to the benefits of rising pig prices

1Q19 results are in line with expectations. Shanghai Meilin announced 1Q19 results: operating income of 65.

1.3 billion, previously + 4%; net profit attributable to parent company1.

8.3 billion, ten years +10.

1%, corresponding to a profit of 0.

2 yuan, in line with expectations.

Among them, the beef and mutton business performed well, with a revenue growth rate of 18.

7%, mainly due to the good performance of silver fern sales in China, the increase in restructuring slaughter, China’s sales share increased, the domestic domestic beef and mutton prices rose, and Lianhao as a whole remained flat.

Hog slaughter and cold meat business performed steadily, with revenue increasing by +4.

3%, canned business income +9 per year.

2%, 1Q19 due to rising pig prices, the contribution of breeding profits is relatively limited.

Development trend The 19-year rise in the price of pigs will benefit the pig breeding business.

At present, there are about 600,000 heads of slaughter attributable to the rights of Shanghai Meilin. The slaughter amount will be limited by swine fever this year. After the construction of the bright pig project has reached production, it is expected to continue to contribute to the slaughter of pigs in 2020-2021.

Entering the growth cycle of pig prices in 19 years will contribute to the company’s profitability in the pig breeding business. We expect that the elasticity of profit will start to appear from 2Q. If the average annual pig price rises 25% in 19-20, the pig breeding business is expected to contribute profits to the company.1.

89, 3.

8.5 billion.

The two pillar industries of Canned Food and Guanshengyuan contributed stable profits.

We expect the company’s snack food profits to be stable, and Guanshengyuan will achieve 1 in 19 years.

Profits of around 9 billion; In 19 years, the company’s canned business faced certain challenges, and its exports to the Philippines were constantly blocked due to the effects of African swine fever. The change was the cost pressure brought by rising pig prices.Meat inventory reserves are expected to have less cost pressure in 1H19. If the spread between China and the United States 杭州桑拿 widens or tariffs are optimized in 2H19, it is planned to increase the import of raw materials to hedge, and it is expected that the canned business will contribute to the company’s profits in 191.

6 trillion profits.

Asset impairment is expected to gradually decrease.

In 2018, the company’s asset impairment amount has dropped significantly to zero.

US $ 5.8 billion, a significant drag on the company’s performance, and we expect the amount of asset impairment to continue to decrease in 2019.

Earnings forecast is maintained at 19/20 EPS forecast of 0.

43/0.

62 yuan unchanged.

It is estimated and recommended that the current budget corresponds to 24/17 times P / E in 19/20 and maintains a target price of 12.

4 yuan, corresponding to 19/20/29/20 times P / E, there is still 21% growth space compared with 天津夜网 current expectations, maintaining the recommended level.

Risks Fluctuations in pig prices, the impact of African swine fever, the time when pig production capacity is put into operation, SFF operates overseas.