KINGKEY SMART AGRI(SZ:000048) Huaxin Securities·2024-08-27 10:30Investment Rating - The report maintains an "Accumulate" investment rating for the company [1] Core Views - The company has turned profitable in its pig farming segment in Q2 2024, with a significant increase in hog output in H1 2024 [1] - The company's H1 2024 revenue was 2.7 billion yuan, a year-on-year decrease of 68.61%, while the net profit attributable to shareholders was 235 million yuan, down 81.67% [1] - The core business segments of the company, including pig farming, real estate development, and feed production, generated revenues of 1.732 billion, 628 million, and 327 million yuan respectively, with year-on-year changes of +37.2%, -90.9%, and -19.7% [1] - The company is expected to benefit from a rising pig cycle in 2024, with Q2 pig prices rebounding and a forecasted continued high price level in Q3 2024 [1] Summary by Sections Financial Performance - In H1 2024, the company achieved a pig output of 1.0459 million heads, a year-on-year increase of 24.04%, with 923,600 being fat pigs and 122,300 being piglets [1] - The company's pig farming cost per kilogram decreased to 14.84 yuan in H1 2024, down 1.88 yuan from H2 2023, with expectations to drop below 13.50 yuan by the end of 2024 [2] - The company forecasts revenues of 11.041 billion, 12.908 billion, and 13.385 billion yuan for 2024, 2025, and 2026 respectively, with corresponding EPS of 1.89, 2.27, and 2.10 yuan [3] Market Position and Strategy - The company focuses on expanding its pig farming capacity to supply the Guangdong-Hong Kong-Macao Greater Bay Area, utilizing both self-breeding and contract fattening models [1] - The company aims to achieve pig output targets of 3 million, 4.2 million, and 6 million heads for the years 2025, 2026, and 2027 respectively [1]