China Animal Husbandry Co., Ltd. (600195): Helping the company open a new chapter
Investment Highlights Event: The company issued an announcement that Zhongmu Industry Co., Ltd. and Jiangsu Crazy Dog Pet Products Co., Ltd. broke through the “strategic cooperation framework agreement” and initially involved in the pet market, and there is huge room for future growth.
Crazy Puppy Company specializes in the production and sales of pet food, pet health products, pet daily necessities and online services, and has better e-commerce operation capabilities.
The agreement states that the company will focus on the theme of deepening pet service cooperation with Crazy Puppy, and establish a cooperative relationship in pet food and health care, relying on the company’s industry, financial advantages and R & D and production capabilities, and the pet service and electricity of Crazy PuppyBusiness operation capabilities and cooperation in various business areas.
We believe that this cooperation will complement each other’s strengths, help the company expand new business growth points, and innovate business models, which will help the company to further enhance its competitiveness and 青岛夜网 commit to development.
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, judging from the sow supplementary pen data of domestic scale factories, it is expected that there will be a clear upward trend since March.
Higher pig prices are expected to occur in the second half of the year, which will increase the intent of farmers to fill the pens, 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.
We believe that the breeding volume and penetration rate will increase rapidly in the next two years. The company’s customer model scale plants account for a high proportion and profitability is expected to continue to increase.
New products are approved, and performance is expected to further improve.
At the beginning of 2019, the company obtained the new veterinary drug certificate for swine foot-and-mouth disease type O, type A bivalent inactivated vaccine (OHM / 02 strain + AKT-Ⅲ strain).
We believe that this new FMD product is highly competitive and is expected to further boost the company’s performance after the quality of the company’s reorganized FMD product has improved in 2017.
In 2019, the poultry seedling market has ushered in gold pricing with rising volume and price.
164 yuan / feather increased to 0.
3 yuan / feather, the company belongs to Qian Yuanhao as one of the traditional recruiters, is expected to benefit from industry changes and significantly improve profitability.
Earnings forecasts and investment advice.
It is expected that EPS for 2019-2021 will be 0.
72 yuan, 0.
87 yuan, 0.
99 yuan, corresponding to dynamic PE is 21 times, 18 times, 15 times.
Considering that in the future, after the normalization of African swine fever, the breeding volume will usher in a rapid recovery, and the entire vaccine sector is at the bottom of the forecast, the market attention will quickly rise, giving the company 25 times the estimate in 2020, corresponding to a target price of 21.
75 yuan, maintain “Buy” rating.
Risk warning: market competition or intensification, the company’s product sales may be less than expected, raw material prices or fluctuations.