WENS FOODSTUFF GROUP CO.(300498) 国信证券·2024-04-30 12:30Investment Rating - The report maintains a "Buy" rating for the company, with a reasonable valuation [2] Core Views - The company's 2023 net profit attributable to the parent company was a loss of RMB 6.39 billion, primarily due to low pig prices, with a year-on-year decline of 220.81% [3][6] - In Q1 2024, the company achieved revenue of RMB 21.848 billion, a year-on-year increase of 9.38%, and reduced its net loss by 55.03% to RMB 1.236 billion [3][6] - The company's pig farming performance improved, with a 92% pig slaughter rate in 2023, up 2 percentage points year-on-year, and a PSY of 22.1, an increase of 2.1 heads [3] - The company's effective pig breeding capacity reached 33 million heads, with a completed capacity of 46 million heads, indicating potential for future growth in pig production [3] - The company's broiler chicken business remained stable, with sales of 1.183 billion broilers in 2023, accounting for 9.1% of the national broiler production, ranking first among listed peers [3] Financial Performance and Projections - The company's revenue in 2023 was RMB 89.921 billion, a year-on-year increase of 7.4%, while net profit attributable to the parent company was a loss of RMB 6.39 billion [3][6] - For 2024-2026, the company's revenue is projected to be RMB 110.315 billion, RMB 124.807 billion, and RMB 125.751 billion, with year-on-year growth rates of 23%, 13%, and 1%, respectively [3][12] - Net profit attributable to the parent company for 2024-2026 is expected to be RMB 7.59 billion, RMB 15.82 billion, and RMB 12.03 billion, with EPS of RMB 1.14, RMB 2.38, and RMB 1.81, respectively [3][12] - The company's pig farming business is expected to generate revenue of RMB 65.625 billion, RMB 74 billion, and RMB 76.563 billion in 2024-2026, with gross margins of 15%, 21%, and 17%, respectively [10][11] - The broiler chicken business is projected to achieve revenue of RMB 39.749 billion, RMB 45.649 billion, and RMB 43.823 billion in 2024-2026, with gross margins of 10.1%, 19.5%, and 14.1%, respectively [10][11] Operational Highlights - In Q1 2024, the company sold 7.18 million pigs, a year-on-year increase of 28%, and 267 million broiler chickens, a slight decrease of 0.3% year-on-year [3][6] - The company's pig farming costs improved, with the comprehensive cost per kilogram of pork expected to drop to RMB 15.2 in Q1 2024 [3] - The company's financial position remained healthy, with cash and cash equivalents of RMB 5.876 billion at the end of Q1 2024, a 37.7% increase from the end of 2023 [3] - The company's operating cash flow in Q1 2024 was RMB 2.259 billion, turning positive year-on-year [8] Industry Outlook - The company's pig and broiler chicken farming businesses are industry leaders, with cost improvements and stable production performance [3][13] - The company is expected to benefit from the recovery of pig prices in the second half of 2024, with its broiler chicken business also poised to gain from the industry's cyclical upturn [3][13]