DBN Group(SZ:002385) Dongxing Securities·2024-09-04 00:00Investment Rating - The report maintains a "Strong Buy" rating for the company [3] Core Views - The company's breeding profitability has significantly improved, and its seed industry development is progressing steadily [2] - The company reported a revenue of 13.095 billion yuan for the first half of 2024, a year-on-year decrease of 16.42%, with a net profit attributable to shareholders of -156 million yuan, a year-on-year decline of 79.86% [2] - The feed segment is under pressure, with a total industrial feed output in the country decreasing by 4.1% year-on-year [2] - The company’s pig breeding output increased by 2.5% year-on-year, with a total stock of 3.6 million pigs as of June [2] - The traditional seed industry showed steady growth, with seed sales reaching 19.88 million kilograms, a year-on-year increase of 87.74% [2] Summary by Sections Financial Performance - In the first half of 2024, the company’s feed business revenue was 9.226 billion yuan, down 20.52% year-on-year, with a gross margin of 12.67%, an increase of 0.56 percentage points [2] - The breeding segment's profitability improved significantly, with a reduction in losses by nearly 90% due to lower breeding costs and rising pig prices [2] - The company expects to maintain a pig output target of 6 million for the entire year [2] Seed Industry Development - The company achieved seed sales revenue of approximately 300 million yuan in the first half of 2024, a year-on-year increase of 13.48% [2] - The company has made progress in its transgenic seed business, with several products receiving biosafety certificates [2] Profit Forecast - The company is expected to achieve net profits of 189 million yuan, 817 million yuan, and 1.055 billion yuan for 2024, 2025, and 2026 respectively, with corresponding EPS of 0.05, 0.18, and 0.23 yuan [3]