Muyuan Foods (SZ:002714) Huaxin Securities·2026-02-06 06:24Investment Rating - The report maintains a "Buy" rating for the company [1][8]. Core Insights - The company's long-term value is rooted in its sustainable core competitiveness, with a focus on systematic low-cost capabilities [2]. - The company effectively collaborates across "people, money, and operations" to drive strategic implementation and boundary expansion [3]. - Overseas expansion and industry chain extension open up growth opportunities, enhancing the company's profitability stability and sustainability [4]. Financial Forecast - The company is projected to achieve a net profit of between 125.68 billion and 234.88 billion yuan in 2026, and between 273 billion and 393 billion yuan in 2027. Revenue forecasts for 2025, 2026, and 2027 are 1344.18 billion, 1329.89 billion, and 1617.67 billion yuan respectively, with EPS of 2.84, 3.43, and 5.98 yuan, corresponding to PE ratios of 16.5, 13.6, and 7.8 times [8][60]. Cost Advantages - The company has established a unique "reciprocal two-way breeding" system, achieving 100% self-supply of breeding pigs [7]. - In feed, the company has reduced soybean meal usage to below half the industry average, maintaining feed costs at 55%-60% of total costs [7][20]. - The company has lowered its breeding costs to approximately 11.3 yuan/kg, leading the industry [7]. Strategic Framework - The company has implemented a multi-tiered employee stock ownership plan and profit-sharing mechanisms to align interests between employees and the company [25][29]. - The financing strategy is closely aligned with strategic needs, with over 70% of funds from the 2019 private placement used for capacity expansion [7][33]. - Approximately 70% of funds are directed towards breeding projects, covering 24 provinces and establishing about 30 million heads of slaughter capacity [7][42]. Growth Opportunities - The company is expanding into the Southeast Asian market, particularly Vietnam, leveraging its management and technical capabilities through a light-asset cooperation model [4][49]. - The slaughter business has crossed the breakeven point, with capacity utilization rising from about 25% during the downturn to 88.1% by Q3 2025, contributing to profit growth [7][57]. Competitive Advantages - The company maintains a strong cash flow and has committed to a dividend payout ratio of no less than 40% from 2024 to 2026, ensuring shareholder interests are protected [7][32]. - The company has established a unique vertical integration model in its slaughter business, controlling all upstream supply from its own farms [54].