Muyuan Foods (SZ:002714) CMS·2025-11-04 03:02Investment Rating - The report maintains a "Strong Buy" investment rating for the company [1][3]. Core Insights - The company continues to improve its breeding costs, leading to a significant increase in per-head profitability compared to the industry average. The cash flow has improved, and the debt-to-asset ratio is steadily declining. Due to industry losses and policy adjustments, it is expected that the reduction in sow capacity will accelerate, potentially raising the average pig price in 2026. The company is well-positioned to benefit from its low-cost advantage [1][7]. Financial Data and Valuation - Total revenue for 2023 is projected at 110.861 billion yuan, with a year-on-year decrease of 11%. The operating profit is expected to be -3.732 billion yuan, reflecting a significant decline of 125%. The net profit attributable to shareholders is forecasted at -4.263 billion yuan, down 132% year-on-year. The earnings per share (EPS) for 2023 is estimated at -0.78 yuan, with a price-to-earnings (PE) ratio of -65.6 [2][18]. - For 2024, total revenue is expected to rise to 137.947 billion yuan, with a growth rate of 24%. The operating profit is projected at 20.011 billion yuan, and the net profit attributable to shareholders is forecasted at 17.881 billion yuan, indicating a significant recovery [2][18]. Performance Overview - In the first three quarters of 2025, the company achieved a revenue of 111.8 billion yuan, a year-on-year increase of 16%, and a net profit of 14.8 billion yuan, up 41%. In Q3 2025, the revenue was 35.3 billion yuan, down 11% year-on-year, while the net profit was 4.25 billion yuan, down 56% year-on-year. The company’s performance aligns with expectations [7][8]. - The company has successfully reduced its breeding costs from 13.1 yuan/kg at the beginning of the year to 11.6 yuan/kg by September 2025, with expectations to further decrease to 11 yuan/kg by year-end [7][8]. Shareholder Information - The total share capital is 5,463 million shares, with 3,811 million shares listed for trading. The total market capitalization is approximately 279.6 billion yuan, and the circulating market capitalization is about 195.1 billion yuan. The return on equity (ROE) is reported at 28.9%, and the debt-to-asset ratio stands at 55.5% [3][18].