Shennong Group(SH:605296) Huaxin Securities·2024-08-07 06:00Investment Rating - The report assigns a "Buy" rating for the company, Shennong Group (605296.SH), indicating a positive outlook for investment [1]. Core Insights - The company has achieved a turnaround from loss to profit, with a significant recovery in profitability. For the first half of 2024, Shennong Group is expected to report a net profit attributable to shareholders of between 104 million and 128 million yuan, representing a year-on-year increase of 139.4% to 148.5% [1]. - The company maintains a leading position in breeding cost advantages, with an average breeding cost of 14.2 yuan per kilogram in H1 2024, which has decreased from 14.6 yuan per kilogram in January 2024 to 13.7 yuan per kilogram in June 2024. This reduction is attributed to lower feed raw material prices and improved production efficiency [1]. - Shennong Group's sales volume of live pigs reached 1.0924 million heads in H1 2024, a year-on-year increase of 62.8%, with both volume and price rising. The average selling price of commercial pigs was 14.70 yuan per kilogram, up 5.6% year-on-year [1]. - The company's debt ratio is significantly lower than the industry average, with a capital debt ratio of 29.53% as of Q1 2024, indicating strong financial health [2]. Financial Projections - Revenue forecasts for Shennong Group are projected to be 62.35 billion yuan, 89.49 billion yuan, and 102.77 billion yuan for 2024, 2025, and 2026 respectively. The earnings per share (EPS) are expected to be 1.14 yuan, 2.56 yuan, and 2.41 yuan for the same years, with corresponding price-to-earnings (P/E) ratios of 31.5, 14.0, and 14.9 times [3][5].