Minhe shares (002234) quarterly comment: Chicken prices continue to rise and performance elasticity appears

Minhe shares (002234) quarterly comment: Chicken prices continue to rise and performance elasticity appears

Investment Highlights Event: Minhe shares revenue in the first quarter of 20197.

3.1 billion (+149.

05%), net profit attributable to mother 3.

8.6 billion (+2567.

86%), deducting non-net profit3.

8.6 billion (+2411.

10%).

The seedling price in 2019Q1 hit a new high, and the company’s performance soared.

The price of chicken 杭州夜生活网 seedlings continued to rise in the first quarter of 2019, approaching 10 yuan per feather after the holiday, and the quarterly average price increased by about 170% compared with the same period last year.

It is expected that the company will release 0 chicken products in 2019Q1.

Around 6.5 billion birds, with an average sales price of 7.

6 yuan / feather, the total cost is about 2.

50 yuan / feather, each profit 5.

1 yuan, chicken quarter single profit 3.

300 million.

Based on the seed price expectation, the company expects net profit attributable to mothers from January to June 20198.

0-9.

6 billion, a previous significant increase of 4244.

4% -5113.

3%.

Replenishment, replacement demand, and poultry prices continue to remain high.

Introduced nationally in 201874.

50,000 sets, we estimate that the national introduction volume in 2019 will be about 750,000 sets.

The number of domestic introductions has been insufficient for several consecutive years, overlapping severe epidemic effects, and industry supply has continued to shrink.

At present, the parent company inventory of association enterprises is about 14 million sets, and the actual supply situation is at a historically low level.

In Q1 2019, the seed price of commodity seedlings surpassed 8 yuan / feather, and the parent’s quotation was close to 70 yuan / set, providing an alternative to drive upstream prices at historical highs.

In the subsequent gradual gradual de-production of pigs, the supply will be supplemented. The rise in pig prices is expected to drive replacement demand for downstream chicken ends, and the rise in terminal meat prices will drive the continued boom in upstream seedling prices.

We will increase the size of the downstream cooked food and deep processing sectors to increase the company’s profitability and risk resistance.

Risk warning: the fluctuation range of the price of chicken fry; the risk of epidemic situation; the price of raw materials.