Makihara (002714): Ten Years of Golden Pig

Makihara (002714): Ten Years of Golden Pig

2019 is the first year of the golden pig year. Industrialized closed pig-making enterprises represented by Makihara have used their accumulation of years of technology and innovation to usher in a period of rapid development driven by extremely high profits.

Although pigs are golden pigs, golden pigs belong to companies that are in line with the direction of future development. Their opportunity is the opportunity to occupy a huge market space in this trillion-dollar sustainable consumer goods market.

This article will show you how to build an excellent enterprise’s multi-faceted advantages from the aspects of Mumuyuan’s end-to-end integrated business model, nutrition, breeding, pig house design, and environmental protection. At the same time, it will also split the long-term excess income intoAfter the two decimal places, and to guide the assessment of the long-term value of the company, we strongly recommend Makihara Shares and give it a “Highly Recommended-A” rating.

Advantages of the end-to-end industrialization system: Under the end-to-end integrated industrial production system, real-time accounting + economic index assessment + scale factor + industrialization pipeline is the core of Makihara’s cost advantage. The core concept of “accounting first, then raising pigs”,At the same time, it is supplemented with extremely detailed assessments, so that employees can and can do it.

Moreover, after years of accumulation, herders have formed a unique and mature vertical management system. The subsidiary company is equivalent to hundreds of unified and standard industrial pipelines, which are relatively single, but can rely on headquarters resources to solve various problems. This isThe important foundation that can keep the leading position in the rapid expansion of the enterprise in the rapid expansion of the enterprise, the article also carried out a detailed analysis of where the management of the aquaculture industry has been.

For the less advanced, this management structure, business model, corporate culture, scale effect, and technical system are all difficult to approach in the short term. This is a time barrier and requires some accumulation to see some benefits.

After careful analysis and calculations, we think that before the occurrence of African swine fever, the advantage of Makihara 150-200 yuan / head was very solid, and it has been expanding in recent years.

Market orientation, value breeding: Observation with the general phenomenon of the industry blindly pursuing a certain trait, breeding of Makihara has always stood on the basis of the long-term growth of the industry, and has been optimized on an alternating basis, focusing on the entire value chain of the pork chain in order to achieve long-term profitOriented.

This value breeding system that first ensures quality premiums and then reduces production costs is an extension of Makihara’s end-to-end industrial production model.

Under such a scientific system, the breeding of Makihara has also formed a certain scale effect.

At present, breeding has contributed about 45 yuan / head of excess profits to the company (external value of 32 yuan / head, internal value of 13 yuan / head).

In the future, there is still a total of 136-205 yuan / head of improvement space, equivalent to 1.

24-1.

86 yuan / kg (calculated at 110kg), there is still much room for improvement.

At the same time, Makihara’s unique dual system allows it to obtain far more sows than it needs at the least cost in the process of rapid development (note 80% of sow demand in China), which is a developing countryKnown and the only company doing this.

The maturing pig house design is an important carrier of “negative technology”: The pig house is the carrier of almost all technologies. Good pig house design needs to take into account various indicators. It is a very delicate job that requires industrial precipitation.

In particular, with the increase in the scale of a single farm, the complexity of the entire system will increase exponentially. If any one is not done well, the overall efficiency will be lowered, and it is very difficult to take into account various aspects.

Makihara has been continuously exploring since raising pigs in 1992, improving the design and construction of pig houses, and transforming the accumulated technology and valuable experience, which has significantly reduced costs and increased efficiency.

This advantage is also formed after years of technical accumulation. The barriers to learning are long and difficult. Makihara’s pighouse has been far ahead of the industry, and it has been frozen for three days.

After the outbreak of non-plague, Makihara upgraded and renovated the pighouse. The fixed assets facilities installed in it could achieve constant temperature breeding of the pighouse. Although this would bring about a breathing cost of 50 yuan per pig, the growth environment of the herd was significantly improvedThe number of days may be extended from the original 180 days to 150-160 days. Feed costs can save more than one hundred dollars, and the feed conversion rate is higher. At the same time, the cost of vaccines will be reduced by about half. The overall cost reduction may have 15%.
Efficient environmental protection, scale optimization: For enterprises, environmental protection is not difficult, it is simply a matter of cost and experience.

Environmental protection treatment is not particularly technically difficult, but multiple tests of the company’s ability to solve problems.

Relatively speaking, the environmental protection treatment test process and accumulation of experience, Muyuan need to face environmental protection problems from 20 years ago, so far, the technology has been relatively mature, the most cost-effective, and it has obvious comparative advantages.

At the same time, environmental protection also tests the company’s ability to handle social relations.

Biogas slurry is available for most crops to increase production, but in rural areas, large farms must face the problem of backward business environment.

Animal husbandry is born in the countryside, grew up in the countryside, and gave birth to a strong ability to deal with social relations, and this ability has a very different ability to replicate in the context of poverty alleviation.

Environmental protection is also a cost issue. It also tests the ability of the overall solution. The advantages of Makihara’s end-to-end system are obvious.

Environmental protection is a prerequisite for the development of enterprises. In recent years, the external requirements of the pig industry have been increasing, and enterprises that are fully prepared will benefit from it.

With its unique way of returning biogas slurry to the field, Makihara has achieved good results in maximizing social benefits and minimizing its own costs. This is also an advantage formed after more than 20 years of accumulation, and there are time barriers.

Where does the Makihara model win?

Industrialization + long-termism + biosecurity and technology-driven victory: (1) Makihara’s highly mechanized and highly automated equipment helps to maximize human efficiency.

In order to save costs, traditional agriculture is temporarily replaced by manpower, and the trend of price increase of manpower and manpower is irreversible. It is inevitable that the “industrial and agricultural efficiency scissors” of pig raising will change from negative to positive.

At the same time, Makihara has achieved the strongest management ability in the advanced production mode and main body (factory mode). If it is referred to other modes, its breeding efficiency and its room for improvement will be higher.

(2) Makihara is a company that combines both yin and yang, and wins battles. When the industry competition changes from “positive” technology to “unfavorable” technology, its advantages will become more obvious.

(3) Against the background that non-pestis has greatly improved the biology of the industry, the difference between the cost of animal husbandry and the industry relying on biosafety prevention or control has increased from the original 150 yuan / head to 350 yuan / head, which is driven by biosecurity and technology.Victory.
In the future, most companies will be aligned with the Makihara model, and the intensive feeding model will place higher requirements on the management level of the company.

Although many companies now begin to learn the Makihara model, due to the existence of time barriers, the learning process is relatively long. To achieve such a low cost as Makihara, it takes at least several cycles (Makihara itself is making rapid progress at the same time, and we expect it to be final next year.Cost or return to less than 12 yuan / kg).

About Makihara’s estimate: We expect the company’s sales volume to be 1050/2000/30 million heads in 2019-2021, with net profit attributable to mothers52.1/300.

3/403.

9 trillion, EPS is 2.

41/13.

89/18.

68 yuan, giving 7-9 times PE in 2020, with a target price of 97.

23-125.

01 yuan, with 38%-77% growth space, maintain “strongly recommended-A” investment rating.

We discussed the company’s long-term forecast in the case of vaccines but with low protection rates and no vaccines. The average profit of the future conversion of Makihara is expected to remain at 660 yuan / head (the 淡水桑拿网 industry average is less than 200 yuan / head) and 440 yuan /Head (the industry average of 100 yuan / head).

At the same time, using the DCF model, the long-term value of Makihara in both cases is 251 and 2699 megabytes, respectively.

Risk reminder: sudden large-scale uncontrollable epidemic disease, major food safety incidents, macroeconomic systemic risks, extreme climate disasters leading to large-scale crop production reductions and food prices, listed companies infected with African swine fever, the number of listings is not as expected, and the country’s scalePig price.