SDDSC(SZ:002041) Tai Ping Yang·2024-11-04 09:01Investment Rating - The report maintains a "Buy" rating for the company with a target price of 12.15, indicating an expected increase of over 15% relative to the market index in the next six months [1][5]. Core Views - The company's revenue for the first three quarters of 2024 was 578 million yuan, a year-on-year decrease of 11.55%, with a net profit attributable to shareholders of 58.58 million yuan, down 38.57% year-on-year. The third quarter alone saw revenue of 170 million yuan, a slight increase of 0.01% year-on-year, but net profit dropped by 71.86% [1]. - The company is leveraging its brand advantage in the competitive seed market, particularly in corn seed products, to stabilize its core business despite a challenging market environment [1]. - The gross margin for the first three quarters was 27.31%, down 3.59 percentage points year-on-year, but it showed signs of recovery in Q3, rising to 31.93% from 24.45% in Q2 [1]. - The report anticipates a stabilization and potential recovery in gross margins for the seed business in 2025, driven by a rebound in corn demand and prices as pig farming recovers [1]. - The company has established early partnerships in biotechnology breeding, positioning itself to benefit from the accelerated commercialization of genetically modified crops, with expectations of increased market share in the coming years [1]. Financial Summary - The projected revenue for 2024 is 1.236 billion yuan, reflecting a decrease of 20.33% from 2023, with a net profit forecast of 236 million yuan, down 17.82% [2]. - The earnings per share (EPS) for 2024 is estimated at 0.27 yuan, with a price-to-earnings (PE) ratio of 38.24 [2]. - The company’s total assets are projected to grow from 4.802 billion yuan in 2023 to 5.293 billion yuan by 2025, indicating a positive long-term outlook [3].