Huatong Meat(SZ:002840) Great Wall Securities·2025-07-16 09:00Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of over 15% relative to the industry index in the next six months [5][17]. Core Views - The company is expected to achieve a net profit attributable to shareholders of between 75 million to 90 million yuan in the first half of 2025, marking a turnaround from losses in the previous year [2][4]. - The company has optimized breeding costs, with the complete cost per kilogram decreasing from 15.2 yuan at the end of 2024 to 13.9 yuan in March 2025, a reduction of 8.55% [2][3]. - The company is positioned as a leading player in the pig slaughtering industry in Zhejiang Province, with a robust full industry chain layout and a focus on cost reduction and efficiency improvements [4][5]. Financial Summary - Revenue is projected to grow from 8,578 million yuan in 2023 to 13,880 million yuan in 2027, with year-on-year growth rates of -9.2%, 6.0%, 19.8%, 13.2%, and 12.6% respectively [1][4]. - The net profit attributable to shareholders is expected to increase significantly from a loss of 605 million yuan in 2023 to a profit of 752 million yuan in 2027, with growth rates of -789.3%, 112.1%, 212.7%, 93.0%, and 70.6% respectively [1][4]. - The company's return on equity (ROE) is projected to improve from -28.8% in 2023 to 21.9% in 2027 [1][4]. Operational Insights - The company has implemented a breeding upgrade plan, aiming to enhance its breeding system and reduce costs further, with the average cost of weaned piglets expected to decrease from 300 yuan to 260 yuan per head [3]. - The company is expanding its contract farming model, targeting an annual output of at least 400,000 pigs, with a projected contribution of 15% from this model [3]. - The company has successfully executed a 1.6 billion yuan capital increase project, which is anticipated to lower its debt ratio and financial costs [3].