LIHUA(300761) Huaan Securities·2024-10-28 17:01Investment Rating - The investment rating for the company is "Buy" [1][2]. Core Views - The company is a leading player in the yellow feather chicken breeding industry, with a robust growth trajectory in its yellow feather chicken business and a strong focus on breeding [1][7]. - The yellow feather chicken sales volume increased from 261 million birds in 2018 to 457 million birds in 2023, with a compound annual growth rate (CAGR) of 11.8% [1][13]. - The company has established a complete industrial chain that includes breeding, feed production, and processing, positioning itself as the second-largest yellow feather chicken producer in China [1][7]. - The pig farming business is also experiencing rapid growth, with a significant increase in the number of pigs sold and a steady decline in breeding costs [1][20]. Summary by Sections Yellow Feather Chicken Business - The company sold approximately 457 million yellow feather chickens in 2023, accounting for 12.71% of the national output [1][7]. - The number of cooperative farmers increased from 5,120 in 2018 to 6,750 in 2023, with a CAGR of 5.7% [1][13]. - The breeding sector has seen substantial investment, with three breeding bases established in Jiangsu and Guangxi to cater to regional demands [1][14]. Pig Farming Business - The company has built a pig farming capacity of approximately 1.8 million pigs, with a significant increase in the number of pigs sold from 380,000 in 2018 to 855,000 in 2023, reflecting a CAGR of 17.6% [1][20]. - The total number of cooperative farmers in the pig farming sector rose from 151 in 2018 to 250 in 2023, with a CAGR of 10.6% [1][20]. - The company’s pig farming costs have been steadily declining, positioning it competitively within the industry [1][20]. Financial Performance - In the first nine months of 2024, the company achieved a revenue of 12.68 billion yuan, a year-on-year increase of 13.7%, and a net profit of 1.16 billion yuan, up 507.7% [1][20]. - The projected revenue for 2024-2026 is expected to be 17.77 billion yuan, 20.20 billion yuan, and 22.21 billion yuan, respectively, with corresponding net profits of 1.71 billion yuan, 2.18 billion yuan, and 2.11 billion yuan [2][4].