Muyuan Foods (002714) 东兴证券·2024-08-07 04:00Investment Rating - The report maintains a "Strong Buy" rating for the company, indicating a positive outlook based on its core cost advantages and expected performance improvement as the pig cycle recovers [3]. Core Insights - The company reported a turnaround in performance for the first half of 2024, achieving a revenue of 56.866 billion yuan, a year-on-year increase of 9.63%, and a net profit of 829 million yuan, compared to a loss in the same period last year [2][3]. - The increase in pig farming volume and declining costs contributed to the profitability, with total pig sales reaching 32.388 million heads, a 7% increase year-on-year [2]. - The company expects continued improvement in profitability due to a combination of rising pig prices and ongoing cost optimization, with a forecasted annual pig output between 66 million and 72 million heads [2][3]. Summary by Sections Financial Performance - In the first half of 2024, the company achieved a net cash flow from operating activities of 15.474 billion yuan and maintained a cash balance of 20.36 billion yuan, with a debt-to-asset ratio of 61.81%, down 1.78 percentage points from the previous quarter [2]. - The company anticipates a further decline in breeding costs, which were approximately 14 yuan/kg in June 2024, down from an average of 15 yuan/kg in 2023 [2]. Production Capacity - The company slaughtered 5.415 million pigs in the first half of 2024, maintaining a capacity utilization rate of 37%, which is stable compared to the previous year [2]. - The company plans to enhance its meat sales market and optimize product structure to improve the profitability of its slaughtering segment [2]. Future Projections - The company forecasts net profits of 14.079 billion yuan, 27.204 billion yuan, and 21.946 billion yuan for 2024, 2025, and 2026 respectively, with corresponding EPS of 2.65, 4.97, and 4.01 yuan [3]. - The report highlights a positive trend in the pig market, suggesting that prices may continue to rise in the second half of the year due to seasonal demand [2][3].