Shennong Group(SH:605296) Huaxin Securities·2025-04-30 05:32Investment Rating - The report maintains a "Buy" rating for the company [4][7]. Core Insights - The company achieved significant revenue growth in 2024, with total revenue reaching 5.584 billion yuan, a year-on-year increase of 43.51%. The net profit attributable to shareholders was 687 million yuan, marking a substantial turnaround from previous losses [4]. - In Q1 2025, the company continued its growth trajectory, reporting revenue of 1.472 billion yuan, a 35.97% increase year-on-year, and a net profit of 229 million yuan, also reflecting a significant recovery [4]. - Despite anticipated declines in pig prices due to increased supply, the company is expected to maintain positive revenue growth and profitability in 2025, supported by its leading cost advantages and expanding production scale [4][5]. Summary by Sections Financial Performance - The company reported a 2024 revenue of 5.584 billion yuan and a net profit of 687 million yuan, with a projected revenue growth of 19.2% in 2025 [9]. - For 2025, the company is expected to generate revenues of 6.654 billion yuan, with net profits projected at 524 million yuan, reflecting a decrease due to market conditions [9]. Cost Structure and Production Capacity - The company's total cost in March 2025 was 12 yuan per kilogram, maintaining a competitive edge in the industry. The company aims to keep costs below 13 yuan per kilogram [5]. - As of March 2025, the company had a breeding sow inventory of 128,000, an increase from 121,000 at the end of 2024, with plans for further capacity expansion [5][6]. Capital Raising and Competitive Position - The company plans to raise 290 million yuan through a private placement of 12.6 million shares to fund expansion projects and enhance its competitive position [6]. - The company's debt-to-asset ratio stood at 27.81% as of Q1 2025, significantly lower than its industry peers, indicating strong financial health [6]. Earnings Forecast - The company is projected to achieve revenues of 6.654 billion yuan in 2025, 8.234 billion yuan in 2026, and 10.635 billion yuan in 2027, with corresponding earnings per share (EPS) of 1.00, 0.30, and 1.30 yuan respectively [9][10].