TRS(002567) 国信证券·2024-11-03 12:31Investment Rating - The report maintains an "Outperform" rating for Tangrenshen (002567 SZ) [1][4] Core Views - Tangrenshen achieved a year-on-year turnaround in net profit in Q3 2024, benefiting from the recovery in pig prices and improved breeding costs [1][7] - The company's pig breeding business significantly benefited from the upward trend in pig prices and cost improvements, with a total of 2 79 million pigs slaughtered in the first three quarters of 2024, a year-on-year increase of 6 10% [1][7] - The company's debt-to-asset ratio steadily decreased to 65 1% by the end of Q3 2024, down 0 82 percentage points from the end of Q2 2024 [1][7] - Tangrenshen has a strong cash reserve, with monetary funds of 1 86 billion yuan as of the end of Q3 2024 [1][7] Business Operations and Growth - Tangrenshen is expanding its pig breeding capacity, with the "company + farmer" fattening model accounting for 72 89% of the total slaughter volume in the first three quarters of 2024 [2] - The company is optimizing its pig breeding system, introducing high-reproduction-rate Danish pigs, and improving production indicators such as PSY and survival rates, which are expected to reduce piglet costs [2] - Tangrenshen is leveraging its scale advantage in feed procurement and flexible feed formulations to reduce feed costs [2] - The company has a strong integrated business model, covering bio-feed, healthy breeding, and meat processing, with a leading position in the industry [2] Financial Performance - In Q1-Q3 2024, Tangrenshen's revenue decreased by 18 2% year-on-year to 17 07 billion yuan, while net profit turned positive to 254 million yuan [1][7] - In Q3 2024, revenue decreased by 15 64% year-on-year to 6 23 billion yuan, with net profit turning positive to 249 million yuan [1][7] - The company's gross profit margin improved by 6 3 percentage points year-on-year to 9 09% in Q1-Q3 2024, and the net profit margin increased by 6 15 percentage points to 1 25% [12] - Operating cash flow increased by 84 3% year-on-year to 424 million yuan in Q1-Q3 2024, accounting for 2 48% of revenue [13] Future Projections - The report forecasts Tangrenshen's net profit for 2024-2026 to be 402 million yuan, 920 million yuan, and 615 million yuan, respectively, with EPS of 0 28 yuan, 0 64 yuan, and 0 43 yuan [2][14] - The company's PE ratio is expected to be 18X, 8X, and 12X for 2024-2026, respectively [2][14]