Muyuan Foods (SZ:002714) Dongxing Securities·2024-05-07 10:32Investment Rating - The report maintains a "Strong Buy" rating for the company [3] Core Views - The company is expected to improve its performance as the pig farming cycle rebounds, supported by its leading cost advantages in pig farming [3] - The company reported a revenue of 110.86 billion yuan in 2023, a year-on-year decrease of 11.19%, and a net loss of 4.26 billion yuan, a year-on-year decline of 132.14% [2][3] - In Q1 2024, the company achieved a revenue of 26.27 billion yuan, a year-on-year increase of 8.57%, but still reported a net loss of 2.38 billion yuan, a year-on-year decline of 98.56% [2] Financial Performance Summary - In 2023, the company sold 63.82 million pigs, a slight increase of 4.27% year-on-year, but faced a 20% decline in average selling price due to low pig prices [2] - The average cost of raising pigs was approximately 15 yuan/kg in 2023, down from 15.7 yuan/kg in 2022 [2] - The company expects costs to decrease to below 14 yuan/kg in the second half of 2024 as market conditions improve [2] - The company slaughtered 13.26 million pigs in 2023, an increase of 80% year-on-year, with meat sales revenue reaching 21.86 billion yuan, a year-on-year increase of 48.54% [2] Profit Forecast - The company is projected to achieve net profits of 6.77 billion yuan, 26.22 billion yuan, and 16.55 billion yuan for the years 2024, 2025, and 2026 respectively, with corresponding EPS of 1.27, 4.79, and 3.03 yuan [3] - The PE ratios for the same years are expected to be 35, 9, and 15 times [3] Company Overview - The company is a key player in the agricultural industry, integrating feed processing, pig breeding, and slaughtering, and is one of the largest pig farming enterprises in China [5]