Core Viewpoint - CICC maintains the earnings forecast for Dekang Agriculture (02419) for 2025/26, with a target price of HKD 111, indicating a 33% upside potential from the current price [1] Group 1: Financial Performance - Dekang Agriculture reported 1H25 revenue of CNY 11.7 billion, a year-on-year increase of 24.3%, and net profit of CNY 1.27 billion, up 250.6%, aligning with CICC's expectations [2] - The significant growth in performance is attributed to improved management efficiency and a decrease in pig costs [2] Group 2: Business Segments - The pig farming segment continues to expand, with 1H25 revenue from pigs increasing by 32.6% to CNY 9.88 billion and sales volume rising by 27.1% to 5.1174 million heads [2] - Poultry business remains stable, with 1H25 revenue of CNY 1.34 billion and a 7.2% increase in yellow feather chicken sales to 43 million birds [2] - Revenue from slaughtering and related products grew by 16.1% to CNY 480 million, with slaughter volume increasing by 18.5% to 249,000 heads [2] Group 3: Cost and Efficiency - Dekang Agriculture maintains a leading cost advantage in the industry, with 1H25 pig production costs below CNY 12.5 per kilogram [3] - The company achieved a PSY (pigs per sow per year) of 27, placing it at the forefront of the industry [3] - The debt ratio decreased to 59.9% in 1H25, down 14.3 percentage points from 1H24, indicating ongoing balance sheet improvement [3] Group 4: Growth Strategy - The company employs a light-asset model through its unique pig breeding farm partnership, achieving lower capital expenditures [4] - Dekang Agriculture leverages advanced breeding technology and precise nutrition to maintain its low-cost advantage, with expectations of continued excess profits per head [4] - The company's market value per head is estimated at CNY 2,623, suggesting room for further valuation improvement compared to industry leaders [4]
中金：维持德康农牧(02419)跑赢行业评级 目标价111港元