Core Viewpoint - The upcoming 2025 Guangdong (Yuexi) Lychee Promotion Event in Shanghai aims to enhance agricultural cooperation between Guangdong and Shanghai, showcasing the region's lychee production and fostering connections between suppliers and buyers [3][4][22]. Group 1: Event Details - The lychee promotion event will take place at the Guangdong Specialty Agricultural Products (Shanghai) Promotion Center, inviting East China consumers to experience the unique flavors of Guangdong lychee [3][4]. - The event is organized by various agricultural departments from Guangdong, including the Agricultural Foreign Economic and Farmers Cooperation Promotion Center, and aims to create a platform for interaction between suppliers and buyers [5][22]. Group 2: Production and Market Insights - The "2025 Guangdong Lychee Procurement Map" indicates that the total lychee production in the Yuexi area is expected to reach 990,000 tons, accounting for over one-third of the province's total output [6]. - Major production areas such as Maoming, Zhanjiang, and Yangjiang are known for their early and late-maturing lychee varieties, contributing to a diverse and complementary industry structure [7][12]. - The demand for lychee in Shanghai and the East China region remains strong, as it is a core market for high-end fruit consumption [8][9][20]. Group 3: Business Opportunities - Guangdong lychee enterprises are preparing for the promotion event, with expectations of significant sales volumes, such as one company estimating sales between 1,800 to 2,000 tons [27][28]. - The East China market represents a substantial growth opportunity, with one company reporting that sales in this region account for over one-third of its total sales [30]. - Companies are planning to enhance their logistics and storage capabilities in East China, with projects already underway to support the timely distribution of lychee during the harvest season [31][32].

Investment Rating - The investment rating for the company is "Outperform the Market" [5][30][36] Core Views - The company experienced a decline in gross margin and an increase in impairment provisions, leading to a significant drop in net profit attributable to shareholders [1][9] - The company is expected to benefit from its leading position in rice seed business and rapid expansion in corn seed business, with a forecasted net profit of 2.0/2.4/2.7 billion yuan for 2025-2027 [3][30][36] - The stock is considered to have a reasonable valuation range of 10.4-11.4 yuan, representing a premium of approximately 10-20% over the current stock price [30][36] Summary by Sections Financial Performance - In 2024, the company achieved operating revenue of 4.709 billion yuan, a year-on-year increase of 14.77%, primarily driven by growth in grain and seed business [1][9] - The net profit attributable to shareholders was 114 million yuan, a significant decline of 58.23% year-on-year, mainly due to lower gross margins and increased impairment provisions [1][9] - For Q1 2025, the company reported operating revenue of 835 million yuan, up 24.13% year-on-year, but net profit dropped to 2 million yuan, down 87.62% year-on-year [1][9] Business Segments - The rice seed segment generated revenue of 1.858 billion yuan in 2024, a 5.67% increase, but gross margin decreased to 39.81%, down 3.00 percentage points [2][26] - The corn seed segment saw revenue of 589 million yuan, a 20.43% increase, with gross margin improving to 33.15%, up 7.87 percentage points [2][26] - The order grain business revenue increased by 44.54% to 1.022 billion yuan, but gross margin fell to 1.56%, down 3.33 percentage points [2][26] Profitability and Cash Flow - The company’s sales gross margin for Q1 2025 was 13.48%, down 6.26 percentage points year-on-year, with a net profit margin of -2.02%, down 4.51 percentage points [2][18] - Operating cash flow for Q1 2025 was -777 million yuan, representing -93.00% of operating revenue [3][20] - Inventory days stood at 360 days, while accounts receivable turnover days were 69 days [3][20] Future Outlook - The company is expected to maintain growth in its rice seed business, with projected revenues of 1.951 billion yuan for 2025, reflecting a 5.0% growth [27][24] - The corn seed business is anticipated to generate revenues of 648 million yuan in 2025, with a growth rate of 10.0% [24][27] - The order grain business is forecasted to achieve revenues of 1.175 billion yuan in 2025, maintaining a stable growth trajectory [24][27]