Shennong Group(605296) Shanxi Securities·2024-11-01 02:00Investment Rating - The report maintains an "Accumulate-B" rating for the company [1][3]. Core Views - The company has shown significant growth in its pig farming business, with a remarkable increase in revenue and net profit for Q3 2024, driven by cost reduction and increased sales volume [1][2]. - The average domestic pig price has risen significantly in Q3 compared to Q2, contributing to improved profitability in the pig farming sector [2]. - The company is expected to achieve substantial net profit growth over the next three years, with projected earnings per share (EPS) increasing accordingly [3]. Financial Performance Summary - For the first three quarters of 2024, the company achieved a revenue of 4.078 billion yuan, a year-on-year increase of 42.11%, and a net profit of 480 million yuan, up 321.20% [1]. - In Q3 2024 alone, the company reported a revenue of 1.583 billion yuan, a 36.32% increase year-on-year, and a net profit of 356 million yuan, reflecting a staggering growth of 662.97% [1]. - The company's pig sales reached 1.6637 million heads in the first three quarters, with a 49.6% year-on-year increase, generating a revenue of 3.236 billion yuan, up 63.19% [2]. Financial Projections - The company is projected to achieve net profits of 645 million yuan, 1.252 billion yuan, and 1.260 billion yuan for the years 2024, 2025, and 2026, respectively, with corresponding EPS of 1.23, 2.39, and 2.40 yuan [3][4]. - Revenue forecasts for the upcoming years are 7.228 billion yuan for 2024, 8.825 billion yuan for 2025, and 10.297 billion yuan for 2026, indicating a strong growth trajectory [4][5]. Key Financial Ratios - The company reported a return on equity (ROE) of 10.81% for the first three quarters of 2024, an increase of 15.60 percentage points year-on-year [1]. - The projected price-to-earnings (P/E) ratios are 26 times for 2024 and 13 times for 2025, suggesting a favorable valuation outlook [3][4].