Muyuan Foods (SZ:002714) Huaan Securities·2024-08-04 14:30Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Views - The company reported a turnaround in Q2, achieving a net profit of 8.29 billion yuan, with a significant increase in pig sales and a decrease in breeding costs [2][3] - The company’s total revenue for the first half of 2024 reached 56.87 billion yuan, representing a year-on-year growth of 9.6% [2] - The breeding cost per kilogram dropped to approximately 14 yuan by June 2024, indicating improved operational efficiency [2][3] Financial Performance Summary - In H1 2024, the company sold 32.388 million pigs, a year-on-year increase of 7% [2] - The average selling price of pigs in Q2 was 17.73 yuan/kg, with costs decreasing from 15.8 yuan/kg in January-February to 14.5 yuan/kg in April-June [2][3] - The company expects to achieve pig sales of 70 million, 75 million, and 90 million for the years 2024, 2025, and 2026 respectively, with corresponding revenue projections of 130.13 billion yuan, 139.76 billion yuan, and 136.89 billion yuan [2][4] Key Financial Indicators - For 2024, the projected net profit is 13.114 billion yuan, a significant recovery from a loss of 4.263 billion yuan in 2023 [4][5] - The gross margin is expected to improve to 17% in 2024, compared to 3.1% in 2023 [4][5] - The company's return on equity (ROE) is projected to be 17.3% in 2024, recovering from -6.8% in 2023 [4][5] Production and Efficiency Metrics - The company’s production efficiency has improved, with the pigs per sow per year (PSY) increasing from 25-26 to approximately 28 [2] - The full-cycle market rate has increased from around 80% to 84% [2] - The company has a strong competitive edge in cost management compared to other listed pig farming companies [2]