YISHENG(002458)2024-08-02 01:03Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 11.05, based on a projected PE of 17 times for 2024 [1]. Core Views - The company's profitability in Q2 2024 was under pressure due to a significant decline in chick prices and a reduction in sales volume. The parent stock chick business remains a major profit contributor despite a price drop of over 30% [2][3]. - The supply of high-quality parent stock chicks is still tight, which supports the price stability of the company's premium varieties. The report anticipates continued price increases for parent stock chicks in the coming months [4]. - The company's self-developed "Yisheng 909" variety is recognized for its superior production performance, contributing to an expected increase in market share and sales volume [3]. Financial Performance Summary - For H1 2024, the company reported revenue of RMB 1.376 billion, down 26% year-on-year, and a net profit of RMB 183 million, down 68% year-on-year. Q2 revenue was RMB 688 million, down 27% year-on-year, with a net profit of RMB 73.62 million, down 71% year-on-year [2]. - The company sold 277 million white feather broiler chicks in H1 2024, a decrease of 16% year-on-year, with an average selling price down 22% [2]. - The projected net profits for the company for 2024, 2025, and 2026 are RMB 715 million, RMB 701 million, and RMB 504 million, respectively, with corresponding EPS of RMB 0.65, RMB 0.63, and RMB 0.46 [1][5]. Market Position and Competitive Advantage - The company holds an estimated 20% market share in the parent stock chick segment and 8% in the commodity chick segment, indicating a strong competitive position [3]. - The recent increase in parent stock chick prices, which rose to over RMB 50 per set in June 2024, is attributed to a decrease in the import volume of grandparent white feather broilers since May 2022 [4].