TECON(002100) Guoxin Securities·2024-09-01 08:01Investment Rating - The investment rating for the company is "Outperform the Market" [4][13][16] Core Views - The company has turned profitable in H1 2024, with a net profit of 277 million yuan, compared to a loss in the previous year. Revenue decreased by 10.82% year-on-year to 7.993 billion yuan [1][7] - The decline in revenue is attributed to lower sales and prices in the corn storage and protein oil processing businesses, while the pig farming and feed sectors have shown significant improvement in profitability due to rising pig prices [1][10] - The company aims to achieve a pig output of 3-3.5 million heads in 2024, with a steady growth outlook supported by its established production capacity in Xinjiang and Henan [1][10] Summary by Sections Financial Performance - In H1 2024, the company reported a revenue of 7.993 billion yuan, down 10.82% year-on-year, and a net profit of 277 million yuan, marking a turnaround from losses [1][7] - The revenue from the corn storage sector fell by 45.85% to 757 million yuan, while the protein oil processing sector saw a 43.17% decline to 733 million yuan [1][7] - Conversely, the pig farming sector's revenue increased by 11.2% to 2.88 billion yuan, with a gross margin improvement of 21% to 10.23% [1][10] Future Outlook - The company expects to maintain a steady growth trajectory in pig output, with projections of 3.2 million heads in 2024, 3.5 million in 2025, and 3.8 million in 2026 [10][11] - Cost control measures and a significant drop in feed prices are anticipated to further reduce breeding costs in 2024 [10][13] - The company has a solid financial foundation with cash reserves of 2.863 billion yuan and a low debt-to-asset ratio of 51.05% [1][10] Business Segments - The feed business is projected to grow steadily, with expected revenues of 6.932 billion yuan in 2024, 7.544 billion yuan in 2025, and 8.049 billion yuan in 2026 [11][12] - The veterinary medicine segment is also expected to recover alongside the pig cycle, with revenues forecasted at 1.046 billion yuan in 2024 [11][12] - The company’s agricultural product processing and corn silage businesses are expected to maintain stable growth, with revenues of 2.292 billion yuan and 3.081 billion yuan respectively in 2024 [11][12]