Leshan Giantstar Farming&Husbandry (SH:603477) Guoxin Securities·2024-09-03 06:02Investment Rating - The investment rating for the company is "Outperform the Market" [2][3] Core Views - The company has shown a steady recovery in its pig farming business, with a significant increase in revenue and a reduction in losses in the first half of 2024. Revenue increased by 13.13% year-on-year to 2.233 billion yuan, while the net loss attributable to shareholders decreased by 87.13% to -0.045 billion yuan [2][4] - The company is benefiting from a rebound in pig prices and has successfully turned around its pig farming operations, while the leather business continues to face challenges due to weak downstream demand [2][4] - The company plans to expand its breeding capacity, with current capacity exceeding 150,000 heads and plans to reach over 200,000 heads in the second half of 2024 [2][4] Financial Forecasts and Metrics - Revenue (in million yuan) is projected to grow from 4,041 in 2023 to 6,266 in 2024, representing a 55.1% increase [1] - Net profit attributable to shareholders is expected to recover from a loss of 645 million yuan in 2023 to a profit of 739 million yuan in 2024 [1] - Earnings per share (EPS) is forecasted to increase from -1.27 yuan in 2023 to 1.45 yuan in 2024 [1] - The EBIT margin is expected to improve from -7.5% in 2023 to 11.7% in 2024, indicating better operational efficiency [1] - The return on equity (ROE) is projected to rise from -21.0% in 2023 to 20.6% in 2024, reflecting a significant recovery in profitability [1] Operational Highlights - The company has achieved a significant increase in pig output, with 1.09 million pigs sold in the first half of 2024, a 25% increase year-on-year [2][4] - The company has established strategic partnerships to enhance its breeding and management capabilities, which are expected to further improve cost efficiency and production metrics [2][4] - The ongoing construction of the Dechang project is expected to enhance the company's breeding scale and operational quality, with an estimated total investment of 1.921 billion yuan [2][4]