HVSEN BIOTECH(SZ:300871) Guoxin Securities·2025-05-05 01:00Investment Rating - The investment rating for the company is "Outperform the Market" [5][20]. Core Viewpoints - The company reported a significant increase in Q1 2025 net profit attributable to shareholders, which rose by 512% year-on-year, driven by the release of raw material production capacity and rising market prices [1][8]. - The company's Q1 2025 revenue reached 399 million yuan, a year-on-year increase of 92.96%, attributed to the recovery of cash flow in the downstream breeding industry and improved demand for animal health products [1][8]. - The company is undergoing technical upgrades to expand raw material production capacity, which is expected to strengthen its market position and support long-term revenue growth in the raw material segment [3][20]. Summary by Sections Financial Performance - In Q1 2025, the company achieved a net profit of 44 million yuan, a quarter-on-quarter increase of 61.79% and a year-on-year increase of 371.23% [1][8]. - The gross profit margin for Q1 2025 was 24.28%, up 1.81 percentage points year-on-year, while the net profit margin improved to 11.22%, an increase of 19.15 percentage points year-on-year [2][12]. - The operating cash flow for Q1 2025 accounted for 14.52% of revenue, reflecting a year-on-year improvement of 36.90 percentage points [18]. Production Capacity and Market Position - The company is currently implementing technical upgrades to increase the annual production capacity of Tylosin from 2,000 tons to 3,000 tons and Tiamulin from 840 tons to 2,000 tons [3][20]. - The recovery in the breeding industry has led to a restoration of cash flow, which has positively impacted the sales volume and pricing of the company's products [1][8]. Earnings Forecast - The company forecasts net profits of 147 million yuan for 2025, 188 million yuan for 2026, and 214 million yuan for 2027, with corresponding earnings per share of 0.89 yuan, 1.13 yuan, and 1.29 yuan respectively [20][22].