TRS(SZ:002567) Guoxin Securities·2024-09-02 04:03Investment Rating - The investment rating for the company is "Outperform the Market" [2][15][18] Core Views - The company achieved a turnaround in net profit in H1 2024, benefiting from a recovery in pig prices. Revenue decreased by 19.6% year-on-year to 10.837 billion yuan, while net profit turned positive to 0.05 billion yuan [2][5] - The company expects to maintain high growth in pig output, with a projected total of 4.5 million pigs for 2024, supported by improved breeding costs and a favorable market environment [2][10] - The company is focused on a full-chain operational model, integrating biological feed, healthy breeding, and meat processing, which enhances its competitive advantage [2][10] Financial Forecasts and Indicators - Revenue projections for 2024-2026 are 27.361 billion yuan, 29.553 billion yuan, and 29.980 billion yuan, respectively, with growth rates of 1.53%, 8.01%, and 1.45% [14][13] - Net profit forecasts for the same period are 0.402 billion yuan, 0.920 billion yuan, and 0.615 billion yuan, with corresponding EPS of 0.28 yuan, 0.64 yuan, and 0.43 yuan [14][15] - The company’s EBIT margin is expected to improve from -2.9% in 2023 to 2.3% in 2024, and further to 4.8% in 2025 [14][16] Business Segmentation - The pig farming segment is projected to generate revenues of 7.849 billion yuan, 8.513 billion yuan, and 8.385 billion yuan for 2024-2026, with gross margins of 12.9%, 20.1%, and 16.4% respectively [11][12] - The feed business is expected to see revenues of 17.493 billion yuan, 18.784 billion yuan, and 19.387 billion yuan, with gross margins of 6.0%, 6.5%, and 6.2% [11][12] - The meat business is projected to generate revenues of 1.997 billion yuan, 2.234 billion yuan, and 2.186 billion yuan, with gross margins of 5.0%, 5.2%, and 5.1% [11][12] Cost and Margin Analysis - The company anticipates a decrease in breeding costs due to improved production efficiency and lower feed prices, which will positively impact profit margins [2][10] - The gross margin for the company is expected to improve from 7.94% in 2024 to 10.33% in 2025, reflecting better cost management and pricing strategies [14][13]