Shennong Group(SH:605296) Xin Lang Cai Jing·2025-11-10 02:32Industry Overview - The supply of breeding sows is relatively abundant, with the national breeding sow inventory at 40.35 million heads as of September 2025, exceeding the normal holding level of 39 million heads by 3.5%. This indicates a relatively ample supply foundation. Additionally, improvements in production efficiency among pig enterprises may further increase pork supply. It is expected that the average price of pigs may decline in Q4 2025 to H1 2026 due to weak demand and increased output from leading pig enterprises [2] Company Performance - The company has continuously strengthened its production and operational management, resulting in a further cost advantage. The complete cost of fattening pigs has decreased to 12.4 yuan per kilogram in Q3 2025, down by 1.1 yuan per kilogram year-on-year. Key cost control measures include disease management, genetic improvement of breeding stock, and better feed-to-meat ratio management, with the feed-to-meat ratio improving from an average of over 2.5 last year to 2.43 by September this year [3] - The company's debt ratio remains stable, with an asset-liability ratio of 27% as of Q3 2025, down by 0.32 percentage points from the end of 2024. The company aims to keep this ratio below 40%. Capital expenditure is projected to be around 1 billion yuan this year, with plans in place for next year's credit and funding to ensure stable cash flow [3] Profit Forecast and Valuation - The company maintains its forecast for net profit attributable to shareholders for 2025-2027 at 518 million, 459 million, and 2.013 billion yuan, respectively. The corresponding BVPS is projected to be 10.20, 10.82, and 14.40 yuan. Considering the company's leading breeding costs and stable financial condition, a valuation of 4.5 times PB for 2025 is assigned, resulting in a target price of 45.90 yuan [4]