Shennong Group(SH:605296)2024-09-06 06:47Investment Rating - The report maintains an "Outperform" rating for the company [2] Core Views - The company reported a turnaround in performance for Q2 2024, achieving a net profit of 124 million yuan, compared to a loss in the previous year, driven by increased sales volume and higher average selling prices [2] - The company sold 1.0924 million pigs in H1 2024, a year-on-year increase of 62.83%, with an average selling price of 14.70 yuan/kg, up 5.60% year-on-year [2] - The average breeding cost per kilogram decreased from 14.5 yuan in Q1 2024 to 13.9 yuan in Q2 2024, with further reductions expected due to improved production efficiency [2] - The company is expanding its breeding capacity, with the number of breeding sows increasing from 98,000 at the end of June to 104,000 by the end of July 2024 [2] - The report projects revenues of 6.174 billion yuan for 2024, with net profits expected to reach 576 million yuan, reflecting significant growth compared to previous years [3][7] Summary by Sections Financial Performance - In H1 2024, the company achieved total revenue of 2.494 billion yuan, a 46.04% increase year-on-year, and a net profit of 124 million yuan, marking a significant recovery from a loss of 401 million yuan in 2023 [3][7] - The projected revenues for 2024, 2025, and 2026 are 6.174 billion yuan, 8.600 billion yuan, and 9.937 billion yuan respectively, with corresponding net profits of 576 million yuan, 1.083 billion yuan, and 1.267 billion yuan [3][7] Market Data - As of September 2, 2024, the company's closing price was 27.20 yuan, with a market capitalization of 1.878 billion yuan [4] - The stock has seen a 52-week high of 45.67 yuan and a low of 18.60 yuan, indicating significant volatility [4] Operational Insights - The company has maintained a strong focus on improving breeding efficiency, with a current PSY (Pigs per Sow per Year) above 28 and a weaning cost for piglets nearing 300 yuan per head [2] - The report highlights the company's robust biosecurity measures, which have contributed to its competitive cost structure and operational efficiency [2]