SHUNXIN AGRICULTURE(000860) Tianfeng Securities·2024-09-02 05:01Investment Rating - The investment rating for the company is "Buy" with a 6-month outlook maintained [3]. Core Views - The company's revenue has been impacted by its pork business, while profitability has shown significant improvement. The revenue for Q2 2024 was 1.63 billion yuan, a year-on-year decrease of 23.26%, but the net profit attributable to the parent company improved by 93.15% to a loss of 28 million yuan [1]. - The company is focusing on product segmentation, particularly in the liquor segment, with a strategy to enhance brand positioning and market promotion [1][2]. Financial Performance - For H1 2024, the company's revenue from pork, other products, and liquor was 786 million yuan, 203 million yuan, and 4.698 billion yuan respectively, with year-on-year changes of -36.64%, -51.35%, and +3.17% [1]. - The gross profit margin for the liquor business was 42.86%, while the pork business saw an improvement in profitability due to better industry conditions and product structure [1]. - The company expects revenues of 10.5 billion yuan, 11.4 billion yuan, and 12.4 billion yuan for 2024, 2025, and 2026 respectively, with net profits projected to be 500 million yuan, 700 million yuan, and 800 million yuan [2][5]. Market and Product Strategy - The company is enhancing its low-end liquor offerings, which have a strong price advantage, while also focusing on upgrading its product structure to include more high-end products [1]. - The number of liquor distributors increased by 14 to 459, indicating a strengthening distribution network [1]. Financial Ratios and Valuation - The company's P/E ratios for 2024, 2025, and 2026 are projected to be 21X, 16X, and 13X respectively, reflecting a potential recovery in profitability [2][5]. - The company’s total assets are expected to reach 17.2 billion yuan by 2024, with a debt ratio of 46.4% [3][5].