Core Viewpoint - The company has increased the terminal prices in the U.S. market since May 1 of this year to effectively cover the increased tariff costs [1] Group 1 - The price adjustment was implemented to address the impact of rising tariffs on costs [1]

Core Viewpoint - The company faced significant challenges in 2024 due to a deep adjustment in the breeding industry, leading to a decline in both revenue and profit, prompting a strategic shift to maintain market share [1][2]. Group 1: Financial Performance - In 2024, the company achieved revenue of 1.255 billion yuan, a year-on-year decrease of 21.45%, and a net profit attributable to shareholders of 109 million yuan, down 61.57% [1]. - In Q1 2025, the company reported revenue of 352 million yuan, a year-on-year increase of 1.06%, while net profit attributable to shareholders was 76 million yuan, a decrease of 27.57% [1]. Group 2: Industry Dynamics - The breeding industry is experiencing a downturn, with strong cost-cutting demands from downstream customers, leading to intensified competition in the animal health sector and a decline in product prices [1][2]. - The company’s core product, the foot-and-mouth disease vaccine, maintains a stable market share but faces pricing pressures [2]. Group 3: Product Performance - The swine vaccine segment is under pressure due to intense competition, although the company saw a significant year-on-year sales increase of 52.17% for the pig circovirus vaccine, despite facing price challenges [2]. - The ruminant vaccine segment showed resilience even in a sluggish breeding market, while the company has a competitive advantage in brucellosis prevention with a diverse product range [2]. Group 4: Research and Development - The company invested 179 million yuan in R&D in 2024, accounting for 14.25% of its revenue, achieving significant breakthroughs in non-epidemic vaccine development [3]. - The company received four new veterinary drug registration certificates and production approvals in 2024, bolstering its product pipeline for long-term growth [3]. Group 5: Earnings Forecast - The expected EPS for 2025-2027 is projected to be 0.23 yuan, 0.28 yuan, and 0.33 yuan, with corresponding dynamic PE ratios of 30, 25, and 21 times, respectively, maintaining a "hold" rating [3].

Core Insights - In 2024, the company achieved operating revenue of 1.32 billion yuan, a year-on-year increase of 10.16%, while net profit attributable to shareholders was 63 million yuan, a decline of 22.39% [1] - The decline in profit is attributed to increased depreciation expenses after the completion of the animal health industrial park, a 17.49% rise in management expenses, and a 46.48% increase in financial expenses due to interest expenses being recognized as costs [1] Enzyme Business - The enzyme business generated revenue of 505 million yuan in 2024, a year-on-year growth of 14.34%, becoming the main driver of the company's revenue growth [2] - The gross profit margin reached 63.69%, an increase of 2.89 percentage points, driven by continuous investment in technological innovation and optimization of production processes [2] - The company is expanding into various fields including industrial enzymes, food enzymes, and pharmaceutical enzymes, and has established an AI technology development laboratory to enhance R&D efficiency [2] Animal Health Products - Revenue from the animal health products business was 308 million yuan in 2024, a slight increase of 3.56%, but the gross profit margin fell to 33.51%, down 8.23 percentage points [3] - The decline in gross profit margin is primarily due to increased depreciation after the industrial park's completion, but long-term benefits are expected from improved product structure and quality [3] - The company plans to focus on biological products, particularly pig vaccines and imported generics, while also expanding into the pet medicine sector [3] Capacity and R&D Investment - With the increase in new capacity utilization and the gradual release of new products, the profitability of the animal health business is expected to recover [4] - The company invested 118 million yuan in R&D in 2024, a year-on-year increase of 6.81%, accounting for 8.95% of revenue, with 266 R&D personnel [4] - The company has established six technology centers and two key laboratories, with major projects expected to be operational by 2025, laying a foundation for future growth [4] Profit Forecast and Investment Recommendation - The expected EPS for 2025-2027 is projected to be 0.44 yuan, 0.51 yuan, and 0.60 yuan, corresponding to dynamic PE ratios of 29, 24, and 21 times, respectively, maintaining a "hold" rating [4]

Financial Performance - The company reported a basic earnings per share of 0.1294 yuan for 2024, an increase of 16.79% compared to 0.1108 yuan in 2023 [1] - The total revenue for 2024 was 23.71 billion yuan, reflecting a growth of 9.06% from 21.74 billion yuan in 2023 [1] - The net profit for 2024 reached 1 billion yuan, up by 16.28% from 0.86 billion yuan in 2023 [1] - The return on equity (ROE) improved to 4.50% in 2024, compared to 3.88% in 2023, marking a 15.98% increase [1] Shareholder Information - The top ten unrestricted shareholders collectively hold 33,877.83 million shares, accounting for 45.47% of the circulating shares, with an increase of 317.20 million shares from the previous period [1] - Inner Mongolia Jinhe Holdings Co., Ltd. remains the largest shareholder with 24,175.87 million shares, representing 32.45% of the total share capital, unchanged from the previous report [2] - New entrants in the top ten shareholders include Shenzhen Zetun Private Securities Fund Management Co., Ltd. and Baosheng Mixed Fund A, with holdings of 535.37 million shares and 414.06 million shares respectively [2] Dividend Distribution - The company announced a dividend distribution plan of 1 yuan per share (including tax) [2]