Sunner(SZ:002299) Guoxin Securities·2024-04-29 06:00Investment Rating - The report maintains a "Buy" rating for the company [5][20]. Core Views - The chicken prices are running weakly, leading to short-term performance pressure on the company. In 2023, the company achieved operating revenue of 18.487 billion yuan, a year-on-year increase of 9.93%, and a net profit attributable to the parent company of 664 million yuan, a year-on-year increase of 61.66% [1][7]. - The company is expected to benefit from a rebound in pork prices in the second half of 2024, which may positively impact the white feather chicken market [2][20]. Summary by Sections Financial Performance - In 2023, the company reported operating revenue of 18.487 billion yuan, up 9.93% year-on-year, and a net profit of 664 million yuan, up 61.66% year-on-year. The growth was attributed to a recovery in the white chicken market in the first three quarters of 2023, cost reduction measures, and increased output of high-value products [1][7]. - In Q4 2023, the net profit attributable to the parent company was -75 million yuan, down 134.43% year-on-year, and in Q1 2024, the operating revenue decreased by 7.10% to 4.215 billion yuan, with a net profit of -62 million yuan, down 169.23% year-on-year, primarily due to a 13% year-on-year decline in chicken prices [1][2][7]. Business Segments - The poultry farming business generated revenue of 10.517 billion yuan in 2023, a year-on-year increase of 0.71%, with a gross margin of 6.32%, up 1.07 percentage points. The food processing business achieved revenue of 6.394 billion yuan, a year-on-year increase of 28.14%, with a gross margin of 18.67%, up 1.60 percentage points [1][2][7]. Profit Forecasts - The company forecasts net profits attributable to the parent company for 2024, 2025, and 2026 to be 770 million yuan, 1.226 billion yuan, and 959 million yuan, respectively. The corresponding EPS for these years is expected to be 0.62 yuan, 0.99 yuan, and 0.77 yuan, with PE ratios of 25.3, 15.8, and 20.2 times, respectively [2][20][19]. Market Conditions - As of April 7, 2024, the domestic grandparent chicken inventory was 1.97 million sets, up 16% year-on-year, indicating a relatively abundant supply of white feather chickens. The recovery in pork prices is expected to boost demand for chicken in the market [2][20].