SHUNXIN AGRICULTURE(SZ:000860) Orient Securities·2025-04-28 05:17Investment Rating - The report maintains a "Buy" rating for the company with a target price of 21.62 yuan, based on a valuation of 160 billion yuan [2][5][11]. Core Insights - The company is experiencing a decline in mid-range and high-end liquor sales, leading to a downward adjustment in revenue and gross margin forecasts for 2025-2026. The projected earnings per share for 2025, 2026, and 2027 are 0.27, 0.36, and 0.45 yuan respectively [2][11]. - The company’s low-end liquor segment is contributing to the growth of its overall liquor sales, with expansion into external markets supplementing revenue [10]. Financial Performance Summary - The company reported a total revenue of 10,593 million yuan in 2023, with a year-on-year decline of 9.3%. The projected revenues for 2024, 2025, 2026, and 2027 are 9,126 million, 8,662 million, 8,897 million, and 9,152 million yuan respectively, reflecting a continued decline in 2024 and a slight recovery thereafter [4][10]. - The gross profit margin improved to 36.03% in 2024, up by 4.23 percentage points year-on-year, while the net profit margin reached 2.53%, an increase of 5.32 percentage points [10]. - The company’s net profit attributable to the parent company for 2024 is projected at 231 million yuan, a significant increase of 178.2% compared to the previous year [4][10]. Product Segment Performance - In 2024, the liquor business generated 70.41 billion yuan in revenue, a year-on-year increase of 3.19%. The sales volume for liquor reached 369,400 kiloliters, with revenue contributions from high-end, mid-range, and low-end liquor at 9.7 billion, 10.9 billion, and 49.7 billion yuan respectively [10]. - The company’s pork business, however, saw a revenue decline of 29.64% in 2024, totaling 16.90 billion yuan, with a significant drop in sales volume [10]. Market and Regional Insights - The company’s revenue from the Beijing region decreased by 35.75% in 2024, while revenue from external regions increased by 1.25%, indicating successful market expansion efforts outside of Beijing [10]. Valuation Assumptions - The report utilizes a Free Cash Flow to Firm (FCFF) valuation method, with key parameters including a tax rate of 25%, a perpetual growth rate of 3%, and a weighted average cost of capital (WACC) of 9.37% [12].