Shun Xin Agriculture (000860): Significant brand advantage, net profit margin expected to continue to rise

Shun Xin Agriculture (000860): Significant brand advantage, net profit margin expected to continue to rise
Executive summary: The effect of structured upgrade is expected.As the blank market continues to decrease, Niulanshan gradually adjusted its low-cost coverage strategy, and proposed a “deep distribution, structural adjustment, and tree model” strategy. Through the improvement of terminal control, the introduction of new products gradually realized an overall ton price increase.Expected to continue the consumption upgrade, the company’s ton price is expected to continue to increase in the long run. There is still plenty of room for growth in the medium and long term, and the concentration may continue to increase.Niulanshan aging products have the characteristics of wide acceptance of flavor, low unit price, high cost performance, etc., and can quickly penetrate the blank market.At present, Niulanshan, as a leading company, has a market share of less than 10%, and the logic of rapid penetration only through the above characteristics still holds true.By further expanding the scale and expanding the company’s asset-light operation strategy, profitability will further increase. The performance of leading FMCG leaders is highly deterministic, and it is estimated that there is room for improvement.Niulanshan, as the leading company of “minor liquor”, carries the “Beijing” culture with high cost performance and achieves its brand power.With the smooth progress of nationalization,武汉夜网论坛 the company’s business scale has increased rapidly, the characteristics of low overlapping unit prices and fast-moving consumer goods, and the stability and performance of its performance have continued to be significant. Short-term sideline profits have improved, focusing on the main industry in the medium and long term, and profitability has continued to improve. The real estate business has actively compressed and withdrawn, and short-term repayments of some projects have significantly reduced losses; pork income and profits have been maximized and stable. In the short-term, with the gradual stabilization of pig prices, profitability will increase.The company will continue to focus on its main business. The proportion of medium and long-term real estate and pork business will continue to change, and the company’s overall profitability will continue to improve. It is predicted that the company’s revenue growth rate for 2019-2021 will be 20% and 15 respectively.4%, 13.2%, net profit growth rate was 36.7%, 32.8%, 31.0%, earnings per share 1.37 yuan, 1.82 yuan, 2.39 yuan, based on stability and growth ability to give the company 35-40 times PE in 2020, the first coverage, given a “recommended” rating. Risk reminders: food safety issues; company performance expectations; RMB exchange rate risk; domestic interest rate rise risks; China’s macroeconomic data is less than expected; changes in the Federal Reserve’s monetary policy; internal capital market fluctuation risks.