One of the most promising and unusual Russian companies😋
#Rusaqua company for the production of Atlantic salmon and trout in Russia. The main farms are located in the Barents sea in the Murmansk region and in the lakes of the Republic of Korea🐋
First let's turn to the technology of growing fish:
First, the caviar Matures in special incubators under strict temperature conditions 🌡 🔮
Then the resulting fry are placed in special containers with water, which are located in specialized factories🏭
Until 2017, the company did not have its own factories, which is why smolt (an industry term for fry 10-20 cm) was purchased abroad. The problem was that there are no major manufacturers in Norway and other countries, so purchases were made from several firms 📞 🧮
In 2017, the company partially solved this problem by purchasing 2 plants in Norway. They have permission to produce about 5 million pieces of smolt per year. Now the company's own production is about 1.5 million units, which does not cover all the company's needs. As a result, the group is forced to continue purchasing in Norway 🇳 🇴
Smolt grows in factories for about 12 months, then it is placed in garden complexes – full-fledged farms. For example, in the Barents sea, one farm includes 16 cages, each of which is a circle with a diameter of 120 meters, the network of which goes to a depth of 20 meters. It is in such "containers" that the grown-up fish is placed 🗑 🐟
The farm includes 1.5 million salmon, and the total biomass is 5,000 tons ⚖ ️
In cages, fish grows for about 2-3 years to 4.5-5 kg, and in 2017 the company managed to get this result in some cages in just 16 months🤩
After that, the fish is transported to the primary processing shop. There is slaughter, evisceration, and packaging📦
Thus, the company currently has an almost complete closed cycle of growing fish - from the ground to the finished product🍣
The prospects of the company:
📌 The strategic plan includes the creation of plants not only for primary processing, but also for deep processing, which will allow both to produce the fish itself and to accompany it to the "store shelf" 🛍 ✅
📌 According to media reports, the company is also going to invest about 900 million rubles in the development of its Norwegian plants, which will increase the production of smolt from 1.5 million to 4.5 – 5 million smolt per year.
At the same time, the company is going to start construction of a smolt plant in Murmansk, which can produce up to 5 million units a year (the project price is about 1.5 billion rubles). Thus, by 2022, the company can reach the level of its own smolt production of about 10-12 million units, which will fully cover its own needs and create a promising Foundation for further increasing the production of final products 📈 ✅
What is the appeal of the company #Rusaqua?
📍In 2014, 4.5 thousand tons of products were produced, and in 2017 – 10 thousand (an increase of more than 100%)🔝
📍By 2025, the company plans to reach the production level of 35 thousand tons per year (to current levels-an increase of about 250% percent). Taking into account that revenue directly depends on products, we can see an average annual growth of about 40%🔄
📍Transition to self-sufficiency in smolt by 2022, which will reduce the cost of purchasing it abroad 📉 🔖
📍Contracts for the supply of equipment with leading foreign companies in the industry🤝
Unique location of farms in the Barents sea: they are located within the warm Gulf stream, which creates an ideal temperature regime and does not freeze the nets from the boats🌊
📍A long-term license for fish production in the Barents sea ensures business stability for many years to come ⚖ ️ 🛡
📍The trend in Russia and the world towards a healthy lifestyle ensures a constant increase in the consumption of red fish 🏃 ♂ ️ 🍣
Economic side:🧮📊
🔹The company has excellent EPS (37.07) & P/E (5.52) indicators, which it can boast not only in Russia, but also in the world. Rusaqua is one of the TOP 3 companies in the world in terms of profitability in its industry 😳 🤩
🔹The group also has a fast-growing NWC:
2017 - 1 242 945
2018 - 2 186 162
2019 - 3 488 850
As you can see, NWC is growing by an average of 65 % every year, which indicates an increase in business turnover, independence of the company from short-term loans and stable development🛡
🔹On average, the company shows growth of 35% per year. At the same time, if we consider Aquaculture in the short term, its weekly return on average is 0.83 %, and the risk = 9.95 %, so it is better to consider this paper as a long-term investment 🏦 📆
⁉app What we see risks:
📌The main shareholder of the company, which owns more than 45% of the shares, is Maxim Vorobyov, the brother of the Governor of the Moscow region Andrey Vorobyov. We are skeptical about the combination of big business and high power, but this is just our opinion🤥
📌Most farms are located in the open sea, which can make them unusable in adverse weather conditions, disasters, and attacks by larger predators 🦈 🌪
Биолог biological risks - the threat is a disease – salmon louse, which in 2015 killed more than 70% of the company's population in the Barents sea. Parasites of the crustacean species settle on the body of the fish and eat it. Fortunately, today there is a technology that allows you to kill such parasites with a laser, without causing damage to the fish itself 🦠 💉
The current crisis caused by the pandemic is already beginning to affect the finances of Russians. Most likely, revenues for the year will be quite low. People will have to save money and limit consumption, which will inevitably affect the demand for the company's products, since red fish traditionally belongs to the category of expensive goods💎
To sum up, Russian aquaculture, despite a number of risks, convinces us of its stability and investment attractiveness. At the time of writing, the company's shares are already included in our portfolio. We explain the absence of dividend payments for the entire period of the company's "life" by its active growth and long-term investments. We predict that when we reach the target level of output, the growth rate will slow down and the company will start to pamper investors with good returns💯
