Investment Rating - The report assigns an "Outperform" rating to the company for the first time, with a reasonable valuation range of HKD 96.40 - 99.90, indicating a potential upside of 30%-35% from the current price of HKD 73.45 [4][6]. Core Insights - The company is a leading player in the livestock industry in Southwest China, focusing on pig and yellow chicken farming, with a complete industry chain from feed production to breeding, farming, and sales [2][13]. - In 2024, the company is expected to achieve a pig output of 8.78 million heads, a 24% year-on-year increase, ranking sixth nationally, while yellow chicken output is projected at 88.12 million heads, a slight decrease of 0.7%, ranking third nationally [2][13]. - The company is expanding its slaughtering and food processing projects, aiming for an annual slaughter volume of over 3 million pigs, which is expected to create new growth opportunities [2][13]. Company Overview - The company has established a unique "company + family farm" breeding model, allowing farmers to raise breeding pigs directly, which leads to a lighter asset structure and more stable cooperation with farmers [3][26]. - The management team has a strong strategic vision, focusing on the core breeding segment, and has built a breeding group of nearly 15,000 heads by the end of 2024, capable of supporting the production of over 1.17 million breeding sows [3][27]. Industry Analysis - The report is optimistic about the continuation of favorable conditions in the livestock industry, emphasizing the importance of low-cost enterprises gaining market share [2][57]. - The pig industry is expected to maintain price stability due to insufficient expansion willingness, while the yellow chicken sector is anticipated to benefit from a recovery in domestic consumption [2][78]. Financial Forecasts - The company is projected to achieve a revenue of HKD 22.463 billion in 2024, a 39% increase year-on-year, with a net profit of HKD 3.297 billion, marking a significant turnaround from a loss in 2023 [5][30]. - The earnings per share (EPS) for 2025 is estimated at HKD 8.87, with a price-to-earnings (PE) ratio of approximately 7.6x, significantly lower than the industry average of 15.4x, indicating potential for valuation recovery [4][5].
德康农牧：立足西南的畜禽养殖先锋，创新践行家庭农场养殖-20250611