MINHE(002234) 华泰证券·2024-10-24 04:03Investment Rating - The report maintains an "Overweight" rating for the company [1] Core Views - The company's performance improved in Q3 2024 due to a recovery in chick prices, leading to a reduction in losses [1] - The chick business is estimated to have achieved narrow profitability in Q3 2024, driven by rising prices and lower costs, while the meat products business continued to drag down overall performance [1] - The company is expanding its main business of chick production and extending into downstream food processing, with new capacities expected to drive future growth [1] Financial Performance - The company reported revenue of RMB 1,576 million for the first three quarters of 2024, a year-on-year decrease of 3.44%, with a net loss of RMB 217 million [1] - In Q3 2024, the company achieved revenue of RMB 528 million, a year-on-year increase of 3.35%, and a net loss of RMB 31.53 million, showing a reduction in losses both year-on-year and quarter-on-quarter [1] - The company sold 61.65 million chicks in Q3 2024, a year-on-year decrease of 6.0%, but the average selling price increased by 36% year-on-year to RMB 3.13 per chick [1] Business Expansion - The company's existing commercial chick production capacity exceeds 300 million chicks, with an additional 100 million chicks capacity under construction [1] - The company's downstream food processing business is expanding, with the Weifang Minhe facility's 30,000-ton cooked food capacity already in operation and achieving profitability, while the Minhe Food facility's 30,000-ton capacity is partially operational but still in a loss-making state [1] - The company has established a subsidiary in Hangzhou, Hangzhou Minyuehe, to focus on e-commerce sales of cooked food products, with good sales momentum on platforms like Tmall and Douyin [1] Profit Forecast and Valuation - The report adjusts the 2024 profit forecast to a loss of RMB 269 million, compared to the previous forecast of a loss of RMB 363 million, while maintaining the 2025 and 2026 profit forecasts at RMB 205 million and RMB 147 million, respectively [2] - The target price is set at RMB 9.44, based on a 16x PE ratio for 2025, reflecting expectations of gradual profitability in the food business [2] Industry Outlook - The recovery in chick prices in Q3 2024 is attributed to reduced industry supply, but a significant price increase in Q4 2024 is unlikely due to the recovery in parent stock inventory [2]