LIHUA(300761) Southwest Securities·2024-10-28 08:30Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for the next six months [1][3]. Core Insights - The company has shown significant performance improvement, with a revenue increase of 13.65% year-on-year to 12.684 billion yuan in the first three quarters of 2024, and a remarkable net profit growth of 507.71% to 1.161 billion yuan [1][3]. - The growth in profits is attributed to increased sales of meat chickens and pigs, stable chicken prices, rising pig prices, and effective cost control [1][2]. - The company is the second-largest yellow feather chicken breeding enterprise in China, with a market share expansion and a projected 10% growth in chicken output [2][3]. Summary by Sections Financial Performance - In Q3 2024, the company reported a revenue of 4.879 billion yuan, up 16.12% year-on-year, and a net profit of 586 million yuan, up 91.02% year-on-year [1]. - The total revenue for the first three quarters reached 12.684 billion yuan, with a net profit of 1.161 billion yuan [1][3]. Cost Management - The complete cost of yellow feather chicken breeding was maintained below 5.9 yuan per pound, while the cost for pig breeding decreased to 7.3 yuan per pound, showcasing effective cost management [1][2]. - The company achieved a 13.48% reduction in the cost of chicken production compared to the previous year [2]. Market Dynamics - The correlation between the prices of yellow feather chickens and pigs is strong due to similar market supply-demand dynamics, leading to improved profitability in the industry [2]. - The company sold 3.76 million meat chickens in the first half of 2024, marking a 12.07% increase year-on-year [2]. Future Projections - The earnings per share (EPS) are projected to be 1.85 yuan, 2.16 yuan, and 2.40 yuan for the years 2024, 2025, and 2026 respectively, with corresponding dynamic price-to-earnings (PE) ratios of 12, 10, and 9 [3][4].