Interpretation of the third quarterly report of Haida Group: revenue of 64.3 billion yuan in the first three quarters

 　　Recently, Haida Group released its three-quarter report for 2021: In 21Q3, the company achieved revenue of 26.
123 billion yuan (+45.
77%) and realized net profit of 214 million yuan (-77.
94%) attributable to the parent
.
yMG China Feed Industry Information Network-Based on feed, serving animal husbandry

　　From January to September, the company achieved revenue of 64.
314 billion yuan (+46.
82%), and realized a net profit of 1.
746 billion yuan (-15.
77%) attributable to the parent
.
In terms of profitability, the company's comprehensive gross profit margin in the first three quarters was 9.
11%, a year-on-year decrease of 3.
33 percentage points; comprehensive net profit margin was 3.
06%, a year-on-year decrease of 2.
29 percentage points; weighted ROE was 12.
26%, a year-on-year decrease of 7.
84 percentage points
.
The expense ratio during the period was 5.
52%, a year-on-year decrease of 0.
49 percentage points
.
yMG China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Statistics of total operating income of Haida Group in September 2014-2021yMG China Feed Industry Information Network-Based on feed, serving animal husbandry

 yMG China Feed Industry Information Network-Based on feed, serving animal husbandry

Source: Corporate announcements, Zhiyan consulting and collationyMG China Feed Industry Information Network-Based on feed, serving animal husbandry

　　The company’s segmented business profit split: We estimate that in 21Q3, the company’s feed business achieved a net profit of approximately 900 million yuan, an increase of nearly 30% year-on-year; the pig breeding business recorded a net loss of approximately 700 million yuan, which turned a profit into a loss year-on-year; The animal insurance business maintains a development trend of rising volume and profit, and the poultry chain business is estimated to be under significant pressure; the company also accrued equity incentive expenses of about 110 million yuan
.
In 21Q1~Q3, the company’s feed business achieved a net profit of more than 2.
2 billion yuan, a sharp increase of nearly 60% year-on-year; as the company basically achieved a breakeven in the first half of the The net profit of the parent is about 360 million yuan
.
yMG China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Feed business: The growth rate of feeds of various categories is steady, and the industry is under pressure to not change the logic of long-term increase in volume and profit
.
In the third quarter of 2021 and the cumulative first three quarters of 2021, the company's feed export sales were about 5.
61 million tons (+28%) and 14 million tons (+30%), respectively, and operating income was about 21.
47 billion yuan (+42%) and 515.
7.
100 million yuan (+45%); The company's feed business revenue growth rate is significantly higher than the sales growth rate.
We believe that this year, under the pressure of the sharp increase in the price of bulk raw materials, the price of feed products has increased significantly
.
yMG China Feed Industry Information Network-Based on feed, serving animal husbandry

　　In terms of categories: 1) In terms of aquatic products, the sales of aquatic products in the 21Q3 industry continued to grow at a good rate.
The cumulative sales growth in the first three quarters of the industry was about 13.
2%; we estimate that the company’s sales of aquatic products in 21Q3 is about 1.
85 million tons, which can still be maintained.
The sales growth rate is about 20% year-on-year
.
2) In terms of pig feed, it is mainly affected by the continuous recovery of pig breeding capacity.
Although the industry's capacity reduction has begun, we estimate that the company's pig feed sales will be about 1.
25 million tons in 21Q3, a year-on-year growth rate of about 110%
.
3) In terms of poultry feed, the poultry chain market continues to be sluggish and the price of bulk raw materials is high.
We judge that the stock of poultry farms has entered a downward channel.
The overall sales of poultry feed in the industry in 21Q3 are under pressure.
The cumulative sales of poultry feed and egg poultry feed in the industry increased in the first three quarters.
We estimate that the company’s sales of poultry feed will be approximately 2.
5 million tons in 21Q3.
With all-round competitive advantages, we can still achieve a year-on-year sales growth rate of about 10%
.
yMG China Feed Industry Information Network-Based on feed, serving animal husbandry

　　In terms of profitability, we estimate that the gross profit margin of the feed business of the company in 21Q3 has dropped significantly year-on-year; the net profit per ton is estimated to be about 160 yuan/ton, which is only basically the same year-on-year, while the net profit per ton in the first half of the year has increased by as much as 50 yuan/ton.
Around tons
.
We believe that the pressure on the profitability of the company's feed business in the third quarter was mainly due to the following reasons:yMG China Feed Industry Information Network-Based on feed, serving animal husbandry

　　1) The price of soybean meal in 21Q3 has risen to varying degrees from the same period of the previous month.
Although the price of corn has declined slightly from the previous month, it is still high; as the price and profitability of livestock and poultry breeding are both in a downturn, we judge that the price increase of the company's feed products is less than and slower than that of raw materials.
The price increase has reduced the net profit per ton of feed products to a certain extent
.
2) The price of live pigs fell to a trough in 21Q3, which greatly dampened farmers' enthusiasm for restocking.
The stock of reproductive sows has been in a downward trend.
We estimate that the company's front-end feed sales accounted for a decline, while the Zhongda pig feed sales accounted for a significant increase
.
In addition, due to the multiple outbreaks of the new crown epidemic, catering consumption has not recovered as expected, and the prices of special aquatic products that rely heavily on catering channels have fallen from the second quarter, resulting in relatively weak growth in the company's high-end extruded materials
.
In summary, we judge that the internal structure of the pig feed and aquatic feed of the 21Q3 company has deteriorated to a certain extent, which will damage the net profit per ton of feed products
.
yMG China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Looking back, we estimate that the company’s total feed sales for the year will be approximately 18.
8 million tons, a year-on-year increase of more than 4.
1 million tons; of which the sales of aquatic feed, pig feed and poultry feed are about 46.
5/455/9.
6 million tons, respectively, with year-on-year growth rates.
Approximately +21%/+100%/+13%
.
Mainly affected by the sharp increase in the net profit per ton of feed products in the first half of this year, we expect the company’s net profit per ton of feed products to exceed 130 yuan/ton, an increase of more than 20 yuan/ton year-on-year; the annual net profit of feed business is about 2.
5 billion yuan, year-on-year Increased by about 55%
.
yMG China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Live pig breeding business: Short-term performance is under pressure, and we continue to forge all-round competitive advantages
.
The 21Q3 company’s live pig production is about 550,000, of which the self-supplied piglets are fattened and slaughtered is about 180,000, the purchased piglets are fattened and the slaughter is about 370,000; we estimate that the complete cost of the self-supplied piglet fattening part is about 17.
5~18.
0 yuan/kg.
The complete cost of the fattening part of the purchased piglets is slightly higher than 28 yuan/kg
.
The sharp drop in pig prices combined with the high cost of outsourced piglets, coupled with factors such as provision for impairment, the company’s pig breeding sector recorded a loss of about 700 million yuan in 21Q3; the company’s cumulative slaughter volume of pigs in the first three quarters was approximately 1.
35 million.
In the first half of the year, the overall break-even was achieved, and the overall loss in the first three quarters was about 700 million yuan
.
Looking backwards, the picking up of pig prices combined with the sharp drop in the price of outsourced piglets, we expect the company's pig breeding business to substantially reduce its losses in 21Q4 from the previous month, and the cumulative loss for the whole year is expected to be slightly more than 1 billion yuan
.
In the long run, the company adheres to a steady and steady development strategy, and has made significant progress in the breeding system, provenance layout, animal nutrition, animal medicine control, and construction of China and Taiwan; we expect that the number of live pigs in 2021-2023 is expected to achieve 190%.
270/3.
5 million heads
.
yMG China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Seedlings and animal protection business: The strategy of one body and two wings is steadily advancing, which is expected to contribute to new profit growth points
.
In terms of seedlings, the company has continued to invest in seedling projects for more than ten years.
It has made breakthroughs in raw fish, yellow catfish, grass carp, crucian carp, tilapia, prawns and other varieties, forming a core customer of 600,000, 1 Seed promotion and value sharing system with 10,000 distributors and 7,000 technical service backbones as the core
.
We expect the company's seed business revenue for the year to be approximately 850 million yuan, a year-on-year increase of more than 40%
.
yMG China Feed Industry Information Network-Based on feed, serving animal husbandry

　　In terms of animal insurance, the company’s aquatic animal insurance has formed a complete service system and distribution channels.
Livestock animal insurance mainly builds an integrated service system through the development of a service station model
.
The company plans to set up more than 1,000 service stations within five years to provide farmers with a full range of breeding technical services
.
We estimate that the company’s animal insurance business revenue for the whole year is approximately 830 million yuan, an increase of about 25% year-on-year; of which, the aquatic animal insurance business is expected to achieve revenue of approximately 610 million yuan, benefiting from the animal insurance demand for downstream farming of vannamei white shrimp.
Achieve a good growth rate; the livestock and poultry animal protection business is expected to achieve revenue of 220 million yuan, an increase of about 70% year-on-year, and it is expected to achieve continuous double growth in the next year
.
yMG China Feed Industry Information Network-Based on feed, serving animal husbandry