Shennong Group(605296) 国信证券·2024-11-03 12:53Investment Rating - The report maintains an "Outperform" rating for Shennong Group (605296 SH) [1][6][11] Core Views - Shennong Group demonstrates industry-leading single-head breeding profitability with steadily declining costs [1][7] - The company's breeding performance ranks in the industry's first tier, supported by long-term high-quality development strategies [2] - Shennong Group shows strong growth potential with a 2025 target of 3 2-3 5 million heads in slaughter volume [3] Financial Performance - 2024 Q1-Q3 revenue increased 42 11% YoY to 4 078 billion yuan, with net profit turning positive to 480 million yuan [1] - 2024 Q3 revenue grew 36 32% YoY to 1 583 billion yuan, with net profit surging 662 97% YoY to 356 million yuan [1] - The company achieved a breeding cost of 13 4 yuan/kg in September 2024, maintaining industry-leading cost control [1][7] Operational Highlights - Current sow farm capacity stands at 122 000 heads, with 114 000 productive sows as of September 2024 [3][7] - The company targets 2 2-2 3 million heads in slaughter volume for 2024 and 3 2-3 5 million heads for 2025 [3] - September 2024 PSY reached 28, with a survival rate of 85% throughout the breeding process [2] Strategic Developments - The company initiated the Qiannan Genetic Core Farm project in October 2024, leveraging PIC's global high-performance gene pool and advanced breeding technologies [2] - Shennong Group plans to maintain its cost leadership with a 2025 target of below 13 yuan/kg in complete breeding costs [1] Financial Position - As of Q3 2024, the company holds 952 million yuan in monetary funds, a 17% increase from Q2 2024 [3] - The debt-to-asset ratio remains low at 27 72%, providing ample financing space for future development [3] - The company announced a 100-200 million yuan share repurchase plan on October 28, 2024, demonstrating confidence in future growth [3] Industry Position - Shennong Group maintains a significant competitive advantage in breeding profitability and cost control [1][7] - With over 20 years of experience in the pig industry chain, the company has established a strong presence in Yunnan, Guangxi, and Guangdong [2] Financial Projections - 2024-2026 net profit forecasts stand at 660 million, 1 24 billion, and 1 2 billion yuan respectively [4][11] - The company's PE ratio is projected at 29X, 15X, and 16X for 2024-2026 [4][11]