Shennong Group(605296) 兴业证券·2024-04-30 08:02Investment Rating - The report maintains an "Add" rating for the company [2][8]. Core Insights - The company achieved a revenue of 3.891 billion yuan in 2023, representing a year-on-year increase of 17.76%, but reported a net profit attributable to shareholders of -401 million yuan, marking a shift to negative profitability [3][11]. - In Q1 2024, the company generated a revenue of 1.082 billion yuan, up 20.82% year-on-year, with a net profit of -3.57 million yuan, which is a significant improvement of 96.63% compared to the previous year [3][11]. - The company’s pig slaughtering volume increased by 63.7% year-on-year to approximately 1.52 million heads in 2023, with an average selling price of 14.4 yuan/kg, down 20.3% year-on-year [6][8]. Summary by Sections Financial Performance - The company’s total revenue for 2023 was 3.891 billion yuan, with a year-on-year growth of 17.8% projected for 2024 [11]. - The net profit for 2024 is expected to recover to 379 million yuan, reflecting a year-on-year growth of 131.9% [11]. - The gross margin for 2023 was 4.4%, with expectations to rise to 15.1% in 2024 [11]. Production and Cost Management - The company’s total cost of production decreased to approximately 16.2 yuan/kg in 2023, down by 0.5 yuan/kg year-on-year [6]. - In Q1 2024, the total cost further declined to around 14.5 yuan/kg, indicating continuous improvement in cost management [6]. - The company’s breeding capacity is set to increase, with the number of breeding sows expected to reach nearly 130,000 by the end of 2024 [7]. Future Outlook - The company is projected to achieve a slaughter volume of 2.5 million heads in 2024 and 3.5 million heads in 2025 [8]. - Earnings per share (EPS) are forecasted to be 0.72 yuan in 2024, 1.68 yuan in 2025, and 1.74 yuan in 2026, with corresponding price-to-earnings (PE) ratios of 49.9, 21.5, and 20.8 [8][11].