Sunner(SZ:002299) Tianfeng Securities·2025-03-28 01:05Investment Rating - The report maintains a "Buy" rating for the company, Saint Farm Development [5][3]. Core Views - The company is positioned as a leading player in the white feather chicken industry, with a fully integrated supply chain that is expected to drive significant growth [15][3]. - The report forecasts revenue growth from 201.33 billion CNY in 2024 to 263.59 billion CNY in 2026, with net profit expected to rise from 7.36 billion CNY to 23.05 billion CNY during the same period [3][4]. - The company benefits from a low valuation relative to its earnings potential, with a projected PE ratio of 10.6x for 2025 and 8.1x for 2026 [3][4]. Summary by Sections Company Overview - Saint Farm Development, established in 1999 and listed in 2009, is a fully integrated leader in the white feather chicken industry, covering all aspects from feed processing to meat processing [15][16]. - The company has a production capacity exceeding 700 million chickens and has established partnerships with major fast-food chains like KFC and McDonald's [15][16]. Industry Analysis - The white feather chicken industry has seen a trend towards increased scale and concentration, with the market share of the top 10 companies expected to rise from 45.4% in 2022 to 47.3% in 2023 [39][40]. - The industry has been in a prolonged downturn since 2019, with a significant impact from the COVID-19 pandemic and rising feed costs, leading to a micro-profit state [41][44]. Competitive Advantages - The company is expanding its production capacity through acquisitions, aiming for a target of 1 billion chickens [31][3]. - The food processing segment has been a focus, with revenue from this area increasing from 21.3% in 2017 to 35.1% in 2024, enhancing the company's resilience against industry cycles [31][32]. Financial Analysis - The company reported a revenue of 18.49 billion CNY in 2023, a 9.93% increase year-on-year, with a net profit of 664.27 million CNY, reflecting a 61.66% increase [4][28]. - The gross margin for the food processing segment is significantly higher than that of raw chicken products, providing a buffer against market volatility [32][33].