1. Re-understanding of cyclical stocks and Jiajiakang
Jiajiakang's annual report has been released for a while, and I will summarize the issues and annual report data in the annual report, in fact, I have a new understanding of the pig cycle in the past two or three years, and I will discuss my thoughts.
I have always believed that the pig cycle is not much different from other cyclical stocks, the cycle fluctuates back and forth, the value of the company is not as big as the company's stock price and the company's profit and loss, the old-timers are true, the investment difficulty of cyclical stocks is indeed relatively large, which I deeply understand, but the probability of investing in cyclical stocks will not lose money, which is also one of the conclusions I think, the stock price (market value) of cyclical stocks fluctuates violently with the rise and fall of the commodity cycle and the level of net profit, doubling and halving are normal fluctuations, and the exact time of the cycle can not be predicted, each time it will be a different reason to superimpose the large cycle in the small cycle, maybe you think that the cycle high has not yet come, maybe the cycle high has quietly passed, inaccurate judgment is the norm.
The reason why cyclical stocks do not lose money is that the cycle will definitely come, which you have to firmly believe, and to buy the cyclical stocks that will not collapse at the low point of the cycle, this is also a necessary condition, rich and dangerous, not suitable for cyclical stocks, in the long run, cyclical stocks are a very high winning rate but the odds are not good in the industry, if I choose again, I will not choose strong cyclical stocks as the object of investment and speculation, because this certainty and uncertainty is very bad, can only be used as a substitute position for the main position, Only to reduce the pressure a little, the current position of Jiakang and Muyuan, a large and a small two cycle pig stocks, the position of 15%, recently rose a little, the position accounted for a little more, no longer increase the position, waiting for the right position in this cycle to clear the industry's cycle stocks.
2. Interpretation of Jiajiakang's annual report
In 2023, COFCO Jiakang's revenue will be 11.6 billion yuan, and the four major business segments will continue as usual, of which 5.2 million pigs will be slaughtered, the number of small packages is unknown, and the net profit will be 16 million yuan, which is the only profitable enterprise in pig stocks (futures earned about 1.4 billion yuan).
For this achievement, no surprise, no joy, plain, the monthly disclosure information of the pig cycle can basically have a general understanding of the performance, I want to say that I pay attention to some of the numbers, Jiajiakang this year's annual report is not said, I wrote the annual report last year to interpret it, if the 2023 annual report is no longer mentioned, then it is the failure of the default strategy, this is also normal, the default strategy of opening a store has failed.
In addition, it is pork in small packages, which is no longer mentioned this year, but flax piglets are still saying that the sales of flaxseed pork increased by 47.0% year-on-year, which continues, and it is also the first to be put forward by COFCO Jiakang, this type of meat is indeed expensive, and consumers can pay for it, after all, consumption is hierarchical.
During the epidemic, small packaging still has advantages, after all, it is convenient for everyone, and the growth is also very rapid, the table is as follows:
In 2023, this indicator will no longer be announced, and this development direction may not be so optimistic, so stop announcing it for the time being.
About the fundamental analysis of Jiajiakang, there is nothing to discuss, look at the table to know, the current market value is about the same as the market value in 2019, at that time the slaughter was only 2 million, I have always believed that the value of pig enterprises lies in the cost and the number of slaughter, and the rest do not need to pay attention to the transition.
Observe the market value of the past few years and find that the highest market value of cyclical stocks is often when the profit is the largest, the largest profit is often the highest pig price, the highest pig price is not necessarily the most slaughtered time, the average slaughter price in the past 5 years is 19.29 yuan / kg, so if there is no large-scale expansion of pig enterprises that can persevere, there is a high probability that there is still surplus grain, the number of slaughter in the past 5 years is 3.55 million heads, the net profit is 610 million yuan, so the average net profit of the head is 171 yuan / head, Among them, the highest pig price in these 5 years is 32.2 yuan, the lowest pig price is 14.8 yuan, and the average is 19.3 yuan, and the break-even point in 5 years can be calculated to be 17.8 yuan.
Among them, the average net profit margin in the past 5 years is 6.1/135=4.5%, and the average return on equity is 6.1/83.7=7.3%, for a company that has experienced the high and low points of the cycle in the past 5 years, the net profit margin of 4.5% and the average ROE of 7.3% are so-so, not too good and not too bad, so from this point of view, it is not a good business, but it can keep up with social inflation.
3. Expectations for Jiajiakang
The rivers and lakes of pig enterprises are also people's rivers and lakes, different heads bring different business styles, Jiajiakang has always been known for its small and beautiful, although it is a central enterprise, but in this fully competitive industry, central enterprises should also participate in all-round competition, competitiveness and combat effectiveness can not be regarded as the best, in terms of breeding costs and production capacity, can also barely squeeze into the first echelon.
The company's expectations are my expectations, these are all nonsense, and we need to see the production capacity of 10 million heads to basically achieve branding, and pig prices are the most unpredictable and uncaring variables.
In 2023, the company implemented a platform, that is, the genomic breeding platform was officially put into operation, forming a closed-loop system from genotyping data collection and analysis to seed selection and breeding, which is conducive to faster population performance optimization.
This year is like this, recently it seems that the market's expectations for pig enterprises are high again, don't be fanatical, don't forget the original intention, always know what the target of your investment is, why you invested in this business, how much you can get when you can, that's enough, unrealistic ideas or cut off it, Jiajiakang, the new year continues to see you raise pigs, sell meat, do activities, hedging, the current company market value of 8.7 billion, nearly 10,000 employees, COFCO holds about 40% of the shares, and the cost of breeding is about 16 yuan, For the time being, the holdings will continue to remain unchanged, and the position will account for about 10%.
Cyclical stocks are cyclical stocks, although the market environment is changing, and the fluctuations of pig prices continue to track, I still can't predict when the bottom and high of the cycle will appear, continue to observe the pig cycle.