Biological Stocks (600201): The industry low has passed, waiting for the company to get back on track
Investment Highlights Event: The company released the third quarter report for 2019, reporting and realizing operating income8.
5 ppm, an average of 40 over a ten-year period.
8%; net profit attributable to mother 2.
5 ‰, 63 years ago.
The centralization trend of long-term breeding leading enterprises remains unchanged.
The data on live pigs and fertile sows in the first half of 2019 has been slowly affected by African swine fever.
However, from the data of the domestic sowing factory’s binary sow supplementation, it is expected that there will be a clear upward trend from March, and the absolute amount of supplementation will be the same as in the first half of 2018.
It is expected that the pig price will rise, which will lead to an increase in the supplementary 杭州夜生活网 pens of farmers, which will increase the demand for vaccines.
In addition, with the continuous invasion of African swine plague, higher requirements have been placed on pig dispatch between local provinces.
We believe that in the long run, it will be beneficial to domestic leading breeding enterprises, and the trend of increasing the concentration of large-scale farms may continue.
The breeding volume and penetration rate will increase rapidly in the next two years, and the company’s profitability is expected to continue to increase.
The industry low has passed and the company is expected to get back on track.
Since August 2019, the implementation of national farming subsidy policies in various localities has tended to alternate, and the price of alternate pigs has continued to rise, and the intention of 西安耍耍网 downstream farming supplementary stalls has clearly increased.
Hog prices have now climbed 35.
76 yuan / kg, has a significant stimulating effect on farmers.
According to grassroots research.
The overall market of the northern market is expected to resume its trend. Compared with the north, the market is expected to be relatively weak due to the delay of the outbreak of African swine fever, but it is also basically stable.
In addition, for vaccine companies, the core customers are large-scale farms. We believe that the country encourages the implementation of policies and supplementary programs. Large-scale farms will take the lead and drive the company’s second-level recovery.
Therefore, we believe that the current low point of the industry has passed and the company will return to normal.
Product diversification enhances core competitiveness.
The domestic poultry vaccine market is growing rapidly.
As the bidding vaccine for highly pathogenic avian influenza was converted from a bivalent vaccine to a trivalent vaccine in the past, the bidding price is expected to usher in an increase, and the bidding price is expected to advance from zero in the past.
164 yuan / feather rose to 0.
3 yuan / feather, the vaccine market size will usher in a rapid increase, boosting the profitability of Liaoning Yikang.
In addition, it is reported that the company’s research and development projects for vaccines such as Seneca inactivated vaccine, P. bovis, two-inactivated vaccine against Manchuria, and four-inactivated cat vaccine are progressing smoothly.
The swine pseudorabies resistance protective agent live vaccine (C strain), chicken Newcastle disease, bird flu (H9 subtype), infectious bursal disease triple inactivated vaccine are actively marketed, and the company’s product diversification progress has accelerated.
Earnings forecasts and investment advice.
It is expected that EPS for 2019-2021 will be 0.
49 yuan, 0.
62 yuan, 0.
74 yuan, corresponding to dynamic PE is 39, 31, 26 times.
The current estimate is reasonable and we maintain our “overweight” rating.
Risk warning: market competition or intensification, the company’s product sales may be less than expected, raw material prices or fluctuations.