WENS FOODSTUFF GROUP CO.(SZ:300498) Huaxin Securities·2024-09-19 22:38Investment Rating - The report maintains a "Buy" investment rating for the company [2][4]. Core Views - The company's share buyback plan, amounting to 900 million to 1.8 billion yuan, reflects confidence in its long-term development and aims to motivate employees through equity incentives [2][3]. - The company reported a significant increase in revenue and net profit for H1 2024, with revenue reaching 467.58 billion yuan, a year-on-year growth of 13.49% [2][3]. - The overall cost of pig and chicken farming has been decreasing, which is expected to further enhance profitability [3][4]. Summary by Sections Buyback Plan - The company plans to repurchase shares at a maximum price of 27.01 yuan per share, using its own funds [2]. - The expected number of shares to be repurchased is between 33.32 million and 66.64 million, accounting for 0.50%-1.00% of the total shares as of June 30, 2024 [2]. Financial Performance - For H1 2024, the company achieved a net profit of 1.327 billion yuan, marking a turnaround from losses in the previous year [3]. - The revenue from pig farming reached 281.57 billion yuan, with a year-on-year increase of 28.69%, while chicken farming revenue was 166.76 billion yuan, slightly down by 0.93% [3]. Cost Trends - The comprehensive cost of pig farming decreased from 7.8-7.9 yuan per jin in January 2024 to approximately 7.4 yuan per jin in H1 2024, with further reductions expected [3]. - The cost of chicken farming also saw a decline, with the total cost per jin dropping to around 6.2 yuan [3]. Financial Health - The company's operating cash flow for H1 2024 was 58.09 billion yuan, a year-on-year increase of 107.38%, contributing to a decrease in the debt-to-asset ratio, which is expected to fall below 55% by the end of 2024 [3][4]. - The forecasted revenues for 2024, 2025, and 2026 are 1090.78 billion, 1241.02 billion, and 1318.33 billion yuan, respectively, with corresponding EPS of 1.42, 1.87, and 1.72 yuan [4].