TECON(SZ:002100) Zheng Quan Shi Bao Wang·2025-05-12 10:15Core Viewpoint - TianKang Biological has shown significant growth in its pig farming business, with a notable increase in sales and profitability in the first quarter of 2025, indicating a strong recovery in the industry [1][2][3]. Sales Performance - In April 2025, TianKang sold 244,700 pigs, a month-on-month decrease of 3.93% but a year-on-year increase of 1.58% [1]. - The sales revenue for April reached 380 million yuan, reflecting a month-on-month growth of 1.06% and year-on-year stability [1]. - Cumulatively, from January to April 2025, the company sold 1,055,400 pigs, an 18.84% increase compared to the same period last year, with total sales revenue of 1.557 billion yuan, up 11.61% year-on-year [1]. Profitability and Cost Structure - The gross margin for the pig farming sector improved significantly from -13.82% in 2023 to 14.61% in 2024, with further profitability expected in Q1 2025 [2]. - The total cost of pig farming for the company was 13.01 yuan/kg in Q1, with costs dropping below 13 yuan/kg in January and March [2]. - Comparatively, leading competitors like Muyuan and Wens have also seen reductions in their farming costs, indicating a competitive landscape [2]. Dividend and Valuation - TianKang's dividend distribution plan for 2024 proposes a payout of 2.2 yuan per 10 shares, with a dividend rate close to 50%, positioning it as a leader in the industry [3]. - The latest dividend yield stands at 3.46%, making it the second highest in the pig farming sector, just behind Muyuan [3][4]. - The valuation of pig farming stocks is currently at historical lows, suggesting potential for long-term investment growth [3]. Future Growth Potential - The company plans significant capital expenditures in pig farming and minor upgrades in feed business, with a new breeding project expected to be operational by the second half of the year [8]. - The feed business aims to reach a sales target of 5 million tons within 3-5 years, indicating a strategic growth plan [8]. - In the animal vaccine sector, the company is innovating its sales model and targeting international markets, particularly in Central Asia and Southeast Asia, to enhance its long-term growth prospects [8]. Shareholder Confidence - The controlling shareholder, Xinjiang Production and Construction Corps, plans to increase its stake in TianKang, demonstrating confidence in the company's future development [7].