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Makihara (002714): Expansion and Re-enhanced Enhanced Edition

25/03/2020 0 Comment

Makihara (002714): Expansion and Re-enhanced Enhanced Edition

In the context of the industry’s epidemic prevention level differentiation, we continue to be optimistic about the rapid expansion of production capacity, the continuous decline in costs, and the industrialized closed-end leader Muyuan, which represents the direction of industrial transformation, and maintain the investment rating of “Highly Recommended-A”.

  Event 1: On December 30, the company issued an announcement on the establishment of subsidiaries in Gaotang County, Shandong Province, Lixin County, Anhui Province, Gushi County, Henan Province, and Leizhou City, Guangdong Province.

  Event 2: The company issued an announcement of signing an investment agreement with a central enterprise poverty-stricken industrial investment fund Co., Ltd. and the establishment of a joint venture company and increased capital to the company’s subsidiaries.”Pig Supply Guarantee Co., Ltd.” has a registered capital of 3.5 billion yuan, Makihara subscribed for 25 trillion, and SDIC Chuangyi subscribed for 1 billion yuan.

After the establishment of the joint venture company, it will increase its capital to Gannan Makihara, Mingshui Makihara, and Fuyu Makihara, which are wholly-owned subsidiaries of Makihara10.

500 million.

  Expansive expansion, the enhanced version of 2017 1, the regional layout continues to leap forward to the south, and the overall pattern of national development is clear, reflecting the company’s determination to expand and its absolute strength.

In addition to Liaoning and Shandong provinces, which are traditionally dominant areas in the north, the newly established 10 subsidiaries are also located in Guangdong. The expansion of the company is going to the south, and the layout of provinces with severe epidemics also represents expansion.Determination and absolute strength.
As of the end of 2019, the number of animal husbandry companies has reached 133, with an average of 25 added each year in the past 5 years. Among them, 49 new subsidiaries (including joint ventures) were added in 2019, and the expansion rate has been unprecedented!

  2. This cycle has less capital constraints. For an enterprise such as Muyuan who lacks money but does not lack management or model, it means that the expansion speed has opened.

The first US $ 1 billion investment made by SDIC, plus the previous Huaneng Trust’s 10 billion, and the light control investment of US $ 700 million, alternating profits of more than US $ 4 billion in the fourth quarter, totaling 15.7 billion capital, and the supporting 50% debt rate can be leveraged314 ppm, according to the average investment of 1400-1500 yuan, corresponding to an increase in production capacity of 20.93-22.43 million heads. Considering the cost of capital and currently in the upward phase of the pig cycle, we believe that the relevant capital expenditure will soon land,The return on investment at pig prices is considerable.

  3. As of December 28, 2019, the total pledged shares of Chairman Qin Yinglin and Muyuan Group accounted for 18% of the company’s total share capital and 31% of the shares held by them. The pledge risk further decreased.

At the same time, in the context of high pig prices and high profits, the company’s balance sheet has been greatly repaired, and its financial situation has continued to improve.

Regardless of the size of major shareholders or listed companies, they are all preparing for the subsequent rapid expansion.

  To be repaired poorly, 2017 is expected to be performed again.

With the successive disclosure of financial reports in the next 6-8 quarters, the industry’s perception gap on long-term value, corporate alpha, non-blast prevention and control options, and implementation effects will gradually narrow.

The continuous development of industrialized closed-end leading companies to upgrade the logic to industrial upgrading is “the rapid expansion of the volume and always keep ahead of the industry’s production costs.” Their expansion of production has really created value.The logic of Makihara’s rise is exactly the same.

It is just that the extent of non-plague deterioration has enlarged the management gap between different production entities, so the long-term cost advantage has reached 350 yuan 南宁桑拿 / head or even higher.

  In 2017, the average market value of Makihara in that year also had a wave of repairs. Under the background of a large cycle, enterprises’ listings increased by 132% and costs remained low, with a sustained maximum growth of 136%.

Considering that the average headline profitability in 2020 exceeds 2017, and the long-term advantage far exceeds the level of the same period in 2017, there is room for repair and improvement.

  Earnings forecast and estimation: We expect the company to return to its parent net profit in 2019-2021.

1/300.

3/403.

9 trillion, EPS is 2.

41/13.

89/18.

68 yuan, giving 7-9 times PE in 2020, with a target price of 97.

23-125.

01 yuan, with 14% -47% growth space, maintain “strongly recommended-A” investment rating.

  Risk reminder: sudden large-scale uncontrollable 夜来香体验网 epidemic disease, major food safety incidents, macroeconomic systemic risks, extreme climate disasters leading to large-scale crop production cuts and food prices, listed companies infected with African swine fever, and fewer countries with less than expected salesPig price.