隆平高科（000998）：玉米业务短期承压，水稻业务韧性凸显

Investment Rating - The investment rating for the company is "Buy" [1] Core Views - The company's revenue and profit have declined in Q1 2025, primarily due to the oversupply in the corn seed market, inventory destocking pressures, accelerated variety updates, and intensified market competition [2][3] - The corn seed business has significantly impacted overall performance, with a revenue drop of 16.74% in 2024, while the rice business has shown resilience, achieving a revenue growth of approximately 13% in 2024 [3] - The company is implementing cost reduction and efficiency improvement measures, which have started to show results, and is focusing on optimizing its financial structure [4] - The company maintains a first-mover advantage in genetically modified crops and is exploring agricultural digitization for long-term growth [5] - Despite short-term challenges in the corn seed market and Brazilian operations, the strong performance of the rice business and ongoing cost management initiatives support a positive outlook [6] Summary by Sections Financial Performance - In Q1 2025, the company reported a revenue of 1.409 billion yuan, a year-on-year decrease of 32.03%, and a net profit attributable to shareholders of -2.09 million yuan, a decline of 102.72% [2] - The company expects revenues of 10.311 billion yuan, 11.892 billion yuan, and 12.890 billion yuan for 2025, 2026, and 2027 respectively, with net profits projected at 364 million yuan, 497 million yuan, and 640 million yuan for the same years [6][9] Cost Management and Financial Structure - The net cash flow from operating activities improved to -939 million yuan in Q1 2025 from -1.087 billion yuan in the same period last year, reflecting effective cost control measures [4] - The company plans to transfer a 34% stake in Tianjin Deruit to Mitsui & Co. for 490 million yuan, which will help refocus on core operations and improve liquidity [4] Market Position and Future Outlook - The company is well-positioned to benefit from supportive domestic seed industry policies and the steady commercialization of genetically modified crops [5] - The adjustments in the Brazilian business, including strategy changes and cost management, are ongoing and will be closely monitored for their impact on profitability [5]