TRS(SZ:002567) Tai Ping Yang·2024-05-24 10:31Investment Rating - The report assigns a "Buy" rating to the company, indicating an expected relative increase in stock price of over 15% compared to the CSI 300 index within the next six months [108][104]. Core Insights - The company is positioned as a leading integrated operator in the livestock industry, with three main business segments—breeding, feed, and meat products—working in synergy to drive growth [2][4][7]. - The livestock industry is currently at the beginning of a new upward cycle, with key indicators such as prolonged low prices and a significant reduction in breeding stock suggesting a recovery in profitability [11][35][84]. - The company has demonstrated rapid expansion in breeding capacity, with a projected output of 450,000 to 550,000 pigs in 2024 and 2025, reflecting a growth rate of 21% to 22% [99][72]. Summary by Sections Business Overview - The company, established in 1992, is a key player in China's agricultural sector, focusing on feed, pig breeding, and meat processing. In 2023, it reported a pig output of 3.71 million heads, a 72% increase year-on-year, and feed sales of 7.08 million tons, up 15% [38][4][7]. - The company has built over 20 breeding bases and modern farming facilities, with a current breeding capacity of 6 million pigs and a long-term goal of reaching 10 million [7][38]. Financial Projections - Revenue forecasts for 2024 and 2025 are estimated at 3.674 billion and 4.314 billion yuan, respectively, with net profits projected at 442 million and 1.812 billion yuan, translating to earnings per share (EPS) of 0.31 and 1.26 yuan [4][74]. - The company has successfully reduced its breeding costs, with a decrease of 1 yuan per kilogram in 2023, enhancing its competitive edge [11][71]. Market Dynamics - The report highlights the cyclical nature of the pig farming industry, with current conditions indicating a shift towards profitability as prices stabilize and begin to rise [62][84]. - The overall market for pork in China is substantial, with a consumption volume of approximately 57.16 million tons in 2022, indicating a robust demand that is expected to remain stable [82][84]. Competitive Position - The company is well-positioned to benefit from the exit of smaller, less efficient producers from the market, allowing for greater market share and expansion opportunities for larger enterprises [88][127]. - The integrated business model allows the company to manage risks effectively while maintaining stable cash flows, which supports its growth strategy [92][72].