Huatong Meat(SZ:002840) KAIYUAN SECURITIES·2024-04-24 04:30Investment Rating - The investment rating for the company is "Buy" (maintained) [2][4]. Core Views - The company has experienced high growth in livestock output while steadily reducing costs, positioning it as a quality target during the cyclical reversal phase. The forecast for 2024 has been raised due to expectations of a stronger-than-previously anticipated cyclical reversal [4]. - The company reported a revenue of 8.578 billion yuan in 2023, a decrease of 9.24% year-on-year, and a net profit attributable to shareholders of -605 million yuan, a decline of 789.34% [4]. - The company is expected to achieve a net profit of 1.112 billion yuan in 2024, with earnings per share (EPS) projected at 1.80 yuan, corresponding to a price-to-earnings (P/E) ratio of 11.9 times [4]. Financial Performance Summary - In 2023, the company achieved a livestock output of 2.3027 million heads, an increase of 91.13%, with an average price of approximately 15.0 yuan per kilogram. The total cost for the year was about 17.2 yuan per kilogram, which decreased to 16.4 yuan per kilogram in Q4 2023 [5]. - The company is projected to increase its livestock output to 4 million heads in 2024, representing a growth of 73.71%, with the total cost expected to drop to 16 yuan per kilogram [5]. - The company’s slaughtering business is expected to see a steady increase in volume, with a projected slaughter volume of 6 million heads in 2024, supported by a robust cash flow and sufficient financial resources [10]. Financial Forecasts - The company’s revenue is expected to grow significantly, with projections of 16.05 billion yuan in 2024, 20.54 billion yuan in 2025, and 21.26 billion yuan in 2026, reflecting year-on-year growth rates of 87.1%, 28.0%, and 3.5% respectively [4][21]. - The net profit attributable to shareholders is forecasted to recover to 1.112 billion yuan in 2024, followed by 1.883 billion yuan in 2025 and 1.551 billion yuan in 2026 [4][21]. - The company’s gross margin is expected to improve to 11.4% in 2024, with a net margin of 7.5% [21].