Tech-Bank(SZ:002124) Xin Lang Zheng Quan·2025-04-09 07:34Core Viewpoint - Tianbang Food Co., Ltd. reported a significant decline in net profit for Q1 2025, but a turnaround in core business profitability was noted after excluding non-recurring losses, indicating an improvement trend in operations despite uncertainties regarding restructuring [1][2]. Group 1: Financial Performance - The net profit attributable to shareholders for Q1 2025 is projected to be between 115 million and 135 million yuan, a decrease of 77.64% to 80.95% compared to 604 million yuan in the same period last year [2]. - The substantial decline is primarily due to a non-recurring gain of 512 million yuan from the sale of shares in a subsidiary in 2024 [2]. - Excluding this factor, the adjusted net profit for Q1 2025 is expected to be between 95 million and 115 million yuan, a significant recovery from a loss of 455 million yuan in the previous year [2]. Group 2: Core Business Improvement - The domestic pig farming market showed signs of recovery in Q1 2025, with an average price of approximately 15.2 yuan per kilogram, up about 8.6% year-on-year [3]. - Tianbang Food increased its pig sales and reduced costs through improved feed formulations and enhanced farming efficiency, lowering the total cost of pig farming from 18 yuan per kilogram in 2024 to below 16 yuan [3]. - Despite a slight decrease of 3% in the number of pigs sold to 2.1 million, the improved pricing and reduced costs led to a gross profit increase of approximately 550 million yuan in the pig farming business [3]. Group 3: Restructuring Process and Risks - Since being placed under pre-restructuring in November 2024, the company faces uncertainty regarding its transition to formal restructuring [4]. - The total liabilities reached 9.918 billion yuan with a debt-to-asset ratio of 72.58%, necessitating debt restructuring and asset sales [4]. - The company's stock may face delisting risks if the restructuring fails, and investor confidence is tested as the stock price has dropped 15% year-to-date [4]. Group 4: Industry Cycle and Strategic Direction - The pig farming industry is characterized by strong cyclicality, and while Tianbang has managed to turn around its core business, it still faces long-term challenges such as environmental regulations and feed price volatility [5]. - The company is pursuing a dual strategy of "farming + food" to strengthen its core pig farming business while accelerating its food processing segment [5]. - Key variables for investors include the progress of the restructuring and the trend of pig prices, which could impact overall profitability [5].