SDDSC(SZ:002041) KAIYUAN SECURITIES·2024-11-01 13:51Investment Rating - The investment rating for the company is "Buy" (maintained) [1][3] Core Views - The company's performance is under pressure due to a decline in corn seed prices, but there is an expectation for price recovery to improve profitability [2][4] - The company reported a significant increase in contract liabilities, indicating strong sales performance expected in Q4 [2][4] - The company is focusing on cost reduction and efficiency improvements to enhance profit margins, alongside increased R&D investment to support transgenic business growth [4][5] Financial Performance Summary - For the first three quarters of 2024, the company achieved revenue of 578 million yuan, a year-on-year decrease of 11.55%, and a net profit attributable to shareholders of 58.58 million yuan, down 38.57% [3][5] - In Q3 2024, the revenue was 171 million yuan, showing a slight increase of 0.01% year-on-year, while the net profit was 5.85 million yuan, a significant drop of 71.86% [3][5] - The gross profit margin for Q1-3 2024 was 27.31%, down 3.32 percentage points year-on-year, and the net profit margin was 9.91%, down 5.53 percentage points year-on-year [2][3] Sales and Market Conditions - The sales of corn seeds have been sluggish, primarily due to a significant drop in domestic corn prices, which has pressured the company's sales performance [2][3] - The company anticipates a recovery in corn seed sales during the Q4 peak season, supported by a substantial increase in advance payments [2][4] R&D and Product Development - The company has increased its R&D expenditure to 24.01 million yuan in Q3 2024, a year-on-year increase of 91.81%, which is aimed at fostering innovation in breeding [4][5] - The company has successfully approved six transgenic corn varieties, ranking second among listed companies, which is expected to contribute positively to future performance [4][5] Financial Projections - The company forecasts net profits attributable to shareholders of 295 million yuan, 389 million yuan, and 499 million yuan for 2024, 2025, and 2026 respectively, with corresponding EPS of 0.34 yuan, 0.44 yuan, and 0.57 yuan [3][5] - The current stock price corresponds to P/E ratios of 31.1, 23.6, and 18.4 for the years 2024, 2025, and 2026 respectively [3][5]