The reason is driven by both quantity and price. Under the background of the rebound of pig price in the third quarter, the current pig sales volume of muyuan shares also increased significantly. Thanks to the companys extremely high business concentration, muyuan shares almost monopolized half of the net profit of the listed pig breeding companies.
More importantly, although the pig price in some regions has fallen below 30 yuan / kg, the supply side of the industry in the fourth quarter is not equipped with conditions for substantial improvement, which will support the pig price and the profitability of muyuan shares.
On October 20, the results from the wind sellers consistent profit forecast showed that although the annual profit outlook of muyuan shares was slightly lower than that of 34 billion yuan in mid July this year, it was still close to 32 billion yuan.
Benefiting from the companys outstanding performance this year, the market value of muyuan shares is as high as 280.7 billion yuan. Qin Yinglin and his wife, the companys actual controllers with a high shareholding ratio, were also listed in the top 10 of the Hurun 100 rich list released on October 20 with their wealth of 200 billion yuan. The speed of wealth appreciation is second only to Yang Sheng Tang Zhong Fu and Shun Feng holding Wang Wei.
As of October 20, according to the lower limit of performance forecast net profit, the total net profit of 16 pig breeding listed companies that have made performance disclosure in the first three quarters of this year was 46.87 billion yuan, while that of muyuan stock reached 20.99 billion yuan, accounting for 44.8%.
Compared with other top pig enterprises, the profit of muyuan shares has also drawn a significant gap. Based on the lower limit of net profit forecast, the net profit of Wenshi shares in the first three quarters was 8.1 billion yuan, Zhengbang technology was 5.417 billion yuan, and new hope was 4.8 billion yuan
The reason is that none of the above-mentioned companies are as concentrated as muyuan shares. Wens shares are developing pigs and chickens at the same time. Zhengbang technology is engaged in feed and breeding business in half. New hopes business is more complex, including feed, poultry, pig and food
When the industry prosperity is at a high level, the performance elasticity of muyuan shares is the strongest. On the contrary, when the price of live pigs declines, the performance withdrawal range of muyuan shares will be greater.
What is the concept of 34 yuan / kg?
This is the highest selling price of pig in muyuan shares since the start of this round of pig cycle in June 2019, and the higher price provides guarantee for the companys high profit margin.
The calculation results of Founder Securities show that the cost of pigs in the third quarter is about 13.69 yuan / kg, and the average profit per head is 2624 yuan.
The second is sales volume. At the beginning of the year, each company gave the annual marketing plan and focused on the second half of the year, but the general sales situation was not ideal.
In contrast, the annual sales target of muyuan shares is 17.5 million to 20 million, and the peak sales volume of the company in the first half of the year is 1.523 million in June.
The obvious large-scale sales at the sales side, combined with the average sales price in the third quarter, reached the highest point of this round of pig cycle, and eventually led to a single quarter revenue of 18.1 billion yuan and a net profit of 10.2 billion yuan.
If only from the perspective of operational efficiency, the secondary market will call it Maotai in pigs, it is not too much.
At present, the consensus of the market is that as long as the pig is maintained at about 30 yuan / kg, pig breeding industry is the most profitable industry, and muyuan shares is the listed pig enterprise with the highest profit scale. This is evidenced by the performance of the first three quarters.
Although the expected value is lower than that of 34.073 billion yuan in mid July this year, after conversion, the net profit of muyuan shares in the fourth quarter of this year is still expected to reach nearly 11 billion yuan, which is still a small increase compared with the third quarter.
From the current industry evolution trend, the above expected value is more reliable.
Jiang Yue pointed out that although the downward trend of pig prices has been established, pig prices have also dropped significantly after the national day. However, considering the large-scale situation of the supply side in the fourth quarter, the possibility of a sharp decline in live pigs is very small, which is just a slow downward adjustment of several days of decline and one day of rise.
In her opinion, the centralized marketing nodes on the supply side may be postponed to March and April next year, when pig prices will be raised by spring festival consumption, some pig enterprises may increase their marketing efforts by borrowing high prices.
In addition, as far as the performance of muyuan shares is concerned, even if the average selling price of pigs in the fourth quarter of this year is lower than that in the third quarter, the improvement from the sales level will have a certain hedging effect.
The company is expected to reach 18.59 million pigs in the fourth quarter, up to 18.59 million pigs in the fourth quarter, which is still expected to reach the target of 18.59 million pigs in the fourth quarter.
The wealth increment space of rich couple is getting smaller and smaller
Although the annual profit prospect of muyuan shares is bright, it is difficult to further improve the companys valuation when its profit scale is equivalent to that of a national joint-stock bank.
According to the above-mentioned forecast value of annual profit of RMB 31.894 billion, the EPS of Moyuan stock is 8.51 yuan / share in the whole year, with the latest valuation level only 8.8 times.
The stock price valuation of muyuan stock is obviously low, which is mainly affected by the change of secondary market expectation.
At the beginning of 2019, in the early stage of pig price rise, the stock price of muyuan shares will be about 18 yuan, and the highest will be 99.01 yuan in July 2020. During this period, the whole pig price is in the upward channel, and the profit expectation of the secondary market for muyuan shares is rising.
Now, with the recovery of domestic pig production capacity, including breeding enterprises, the expectation of pig price decline in next year has been strengthened, and the premium of profit promotion given by A-share market will disappear.
Since July this year, the stock price of muyuan shares has fallen to about 75 yuan, during which the total market value of muyuan shares has shrunk by more than 80 billion yuan.
Even so, Qin Yinglin and his wife, the actual controllers of muyuan shares, are still ranked No. 10 on the Hurun 100 rich list with a wealth of 200 billion yuan due to their high shareholding ratio. Their wealth is second only to Netease Ding Lei and pinduoduo Huang Zheng.
However, under the background that the industry boom began to enter a downward cycle, the space for Qin Yinglin to further improve his personal wealth has become smaller and smaller.
In addition, as far as muyuan shares are concerned, although currently benefiting from ultra-high business concentration, this years profit scale is comparable to that of banks. However, assuming that pig prices fall back to the cost line again in the future, such as the first five months of 2019, muyuan shares will also face the consequences of concentrated production expansion in the past two years.
At that time, all the company can do is to try to be low-cost through scale. If we want to restore this years ultra-high profit margin, we have to wait for the coming of the next round of pig cycle.
Source: Yang Qian, editor in charge of economic report in the 21st century_ NF4425