Anjing Food (603345): Resolving Adverse Impacts and Restoring High Growth

Event: The company announced its 2019 Interim Report and realized revenue23.

3.6 billion, net profit attributable to mother1.

6.5 billion yuan, an increase of 19 each year.

93%, 16.

04%, deducting non-attributed net profit1.

4.9 billion increased by 20.


Single second quarter revenue 12.

3.9 billion, net profit attributable to mother is 100 million, net profit attributable to non-mother is 0.

900,000 yuan, an annual increase of 25.

07%, 13.

85%, 18.


Revenue growth in the second quarter exceeded expectations.

In the second quarter, the impact of non-pesticidal diseases on the sales end was eliminated, and meat products resumed two-digit growth: by product, the income of rice products, meat products, surimi products, and substitute products in the first half of the year was 6 respectively.

39, 5.

94, 8.

74, 2.

23 ppm, an increase of 25 each year.

59%, 4.

93%, 23.

73%, 35.


The impact of non-plague on meat sales in Q2 was eliminated, and its revenue growth rate was from Q1 position 4.

29% recovered to Q2 growth of 15.


The heavy volume of new products drove the surimi and alternative products to accelerate in the second quarter.

The tax rate fell in April, and the company’s tax-free sales price did not change, driving the unit price to increase slightly.

East China, which accounts for more than half of its revenue by region, has a growth rate of 12 due to base reasons.

8%, Southwest income 1.

1.6 billion, because the Sichuan plant just started production at the end of last year, the market needs to be further improved and the product structure is rich, so the current growth rate is 12%.

25% is more stable.

Northeast (2.

3.8 billion, +48.

92%) and North China (2.

64 billion, +40.

55%) The production capacity of the Liaoning plant has been reduced in previous years, the channels have sunk, and the production capacity increased through technological reform this year. The growth rate is the best.

Looking at distributors, commercial supermarkets, and specials by channel, the revenue is 19 respectively.89, 2.

89, 0.

4.8 billion, an increase of 22.

49%, 2.

21%, 16.

81%, of which the business super channel channel through the quarterly fluctuation due to the special billing requirements of downstream customers.

The growth of raw materials affects profitability, and the company adopted a variety of measures to respond: gross profit margin of 25 in the first half of the year.

5% down 1.

1 point, 24 in the second quarter.

7% down 1.

6 points. We estimate that the insufficient growth rate is positively driving the improvement of gross profit margin. The introduction of low-margin products such as frozen products, imported pork instead of domestic products due to safety considerations, and raw material growth brought by rising chicken prices will lower the overall gross profit marginCaused by.

The company also adopted the method of purchasing and stocking during the period of price stabilization to lock the cost of imported pigs, and adjusted the formula to reduce the amount of pork to control the cost.

The increase in chicken meat has recently expanded. Looking back, the company is not expected to rule out the use of downward substitution to calm down the impact of some cost increases on gross profit margin.

The effect of scale drove the sales expense ratio in the second quarter, and the management expense ratio decreased by 1%.

3, 0.

1 per share, convertible bonds, short-term borrowing expenditures increase the financial expense ratio by 0.

1 point, a comprehensive decline in the second quarter net interest rate of 8.

07% declines by 0 every year.

81 points.

Net profit for the first half of the year 7.

06% down 0.

23 units.

Profit forecast and rating: Against the background of severe swine fever and various raw materials in Africa this year, the company can still maintain a double-digit growth rate of net profit through various methods, which is not easy.

From the perspective of income, the growth rate has steadily increased.

Last year, the company’s 500 million convertible bonds were converted and redeemed in July this year, with a conversion rate of 99.

23%, the fundraising project Sichuan factory has been put into production at the end of last year, and some funds 四川耍耍网 have been changed to the more urgent Wuxi noodle production capacity.

The company announced the issuance of a convertible bond plan of 900 million US dollars. The fund-raising projects are Qianjiang15 in Hubei, Tangyin, Henan10, and Liaoning factory’s second-stage 4 alternative capacity construction.

This convertible bond prepares for capacity demand in the following years.

What do we expect in 2019?
In 2021, the income growth rate will be 18%, 23%, and 20%. The diluted EPS after conversion of convertible bonds into shares in 2018 will be 1.

41, 1.

76, 2.

At 17 yuan / share, we are optimistic about the company’s long-term development and potential to become a leading large-scale food company in the quick-freezing industry. We give 30 times PE next year with a target price of 52.

8 yuan, increase the level.

Risks suggest sales fall short of expectations, and pork and other costs increase faster than expected