Zhengbang Technology (002157) Commentary on Major Events: Increasing holding of controlling shareholders demonstrates confidence in breeding pig assets + biosafety prevention and control to help grow
The company issued an announcement saying that the controlling shareholder Zhengbang Group intends to increase its holdings of the company’s shares through centralized bidding with its own funds. The increase is not less than 20 million shares and not more than 40 million shares. There is no price replacement for this increase in the plan., Determined based on the company’s stock price fluctuations and the overall trend of the capital market, and will be completed within 6 months from the date of this announcement.
Comment: The increase in shareholding fully demonstrates the controlling shareholder’s confidence in the company’s future development and makes every effort to strengthen and expand the pig breeding business.
Zhengbang Group currently holds company 4.
6.9 billion shares, accounting for 19% of the company’s total share capital.
1%. After the completion of this increase, Zhengbang Group will hold more than 4 shares in the company.
8.9 billion shares, the shareholding ratio will return to more than 20% in 2017.
This increase in shareholding fully demonstrates the 天津夜网 controlling shareholder’s confidence in the company’s development prospects and recognition of the company’s value, and will also effectively boost the market’s confidence in the company.
This round of non-plague situation has reduced the company’s expansion. Since 2019, the company has set an increase of nearly $ 1 billion to major shareholders, intends to issue no more than 1.6 billion convertible bonds, and obtain temporary shareholders’ equity of $ 4.8 billion.
US $ 13.7 billion transferred non-core assets to major shareholders Zhengbang crop protection, and went all out to strengthen and expand the pig breeding business.
Breeder assets have exploded, and biosafety prevention and control has been upgraded.
① Sufficient breeding pig resources.
The company has GGP, a total of about 150,000 GP breeding pigs, which are distributed in Hubei, Jiangxi, Anhui, Sichuan and other places; 65 sows were listed at the end of September this year.
30,000, of which 35 can breed sows.
20,000 heads, 30 reserve sows.
10,000 pigs. By the end of 2019, the company’s sow inventory will reach or exceed 1.2 million heads. We expect that the number of pigs released in 2020 will reach 11-13 million heads.
② Comprehensively improve biosafety prevention and control.
The biological safety prevention and control of the pig farm is a key factor affecting the survival of the pig farm. The company comprehensively inspects the self-built feed factory, self-built pig farm, and cooperative farmers’ farms in terms of software and hardware occupation of biological safety prevention and control.Comprehensively improve the biological safety prevention and control of pig farms.
During the grassroots research process, we learned that in October the company has comprehensively combed and adjusted the SOP, with immediate results and a new level of biosecurity prevention and control capabilities.
Profit forecast, estimation and investment rating This round of non-epidemic diseases has also caused severe deterioration in the productivity of its ancestral breeder pigs. It takes 28 months to grow from a great ancestor breeder to a binary breeder. The restoration of production capacity will be a long process;The ternary breeding will inevitably lead to a serious deterioration of production efficiency, and it may last for several years until the high pig price.
According to the company’s monthly report in the past two months, the weight of fattening pigs on the slaughtering pig has risen sharply from about 98 kg in September to 111 kg in October and 115 in November.
28 kg. This indicator reflects the company’s good results in the prevention and control of epidemic diseases. Based on the average price in October and November, we can infer that the company’s monthly net profit from pig breeding reached or exceeded 500 million. The company’s operating inflection point has now been reached.
We estimate that the company will produce 5.7 million pigs, 12 million pigs and 15 million pigs in 2019-2021, corresponding to a revenue of 224.
600 million, 497.
200 million, 568.
9 trillion, the predicted net profit attributable to mother is 24.
100 million, 184.
600 million, 194.
90,000 yuan (Democratic forecast of net profit to mother 25.
400 million, 182.
800 million, 161.
300 million), an increase of 1145 each year.
6%, corresponding to EPS0.
99 yuan, 7.
55 yuan, 7.
The hog sector is more than 10 times PE at a profit high. We give the company 5 times PE in 2020 and slightly raise the target price to 37.75 yuan, to maintain the “strong push” level.
Risk warning: pig price rises less than expected; blight.