SHUNXIN AGRICULTURE(000860) 华福证券·2024-10-31 01:01Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of over 20% relative to the market benchmark within the next six months [7]. Core Views - The company has shown a significant improvement in net profit, with a year-on-year increase of 230.72% in the first three quarters of 2024, despite a 16.92% decline in revenue [1]. - The white liquor business remains stable, and the pork business is showing signs of reduced losses, with a notable recovery in profitability [2]. - The report anticipates a recovery in gross margins in Q4 2024 due to early channel stocking for the upcoming Spring Festival [1][2]. Financial Performance Summary - For the first three quarters of 2024, the company achieved revenue of 7.317 billion yuan, a decrease of 16.92% year-on-year, while net profit reached 382 million yuan, up 230.72% [1]. - The gross margin for Q3 2024 improved by 13.45 percentage points to 36.26% compared to the previous year [1]. - The company expects net profits for 2024-2026 to be 363 million, 535 million, and 639 million yuan respectively, with a revision from previous estimates [2]. Business Segment Insights - The white liquor segment's revenue remained stable year-on-year, with ongoing consumer cultivation efforts enhancing brand visibility and potential sales conversion [2]. - The pork segment has seen improved profitability due to adjustments in production and product mix, benefiting from a recent rise in domestic pork prices [2]. Valuation Metrics - The report provides earnings per share (EPS) estimates of -0.40 yuan for 2023, transitioning to 0.49 yuan in 2024, and reaching 0.86 yuan by 2026 [5]. - The price-to-earnings (P/E) ratio is projected to improve from -45.3 in 2023 to 21.0 in 2026, reflecting a recovery in profitability [5].