Core Viewpoint - The company expects a significant decline in net profit for the first half of 2025, projecting a profit of 5 million to 7.5 million yuan, which represents a year-on-year decrease of 97.27% to 95.90% [3] Group 1: Performance Forecast - The performance forecast period is from January 1, 2025, to June 30, 2025 [1] - The company anticipates a positive net profit but with a downward trend [1] Group 2: Communication with Accounting Firm - The performance forecast has not been pre-audited by the accounting firm, but preliminary discussions have taken place, and there are no discrepancies between the company and the accounting firm regarding the forecast [2] Group 3: Reasons for Performance Changes - The company experienced a year-on-year increase in the sales volume of broiler chicks, but the selling price decreased significantly due to low market prices for chicken and live chickens, leading to losses in this segment [3] - The pig business saw a substantial increase in profit due to stable production capacity and effective cost control measures, despite the overall chicken business facing slight losses [3] - The combined effect of these factors results in a projected net profit of 5 million to 7.5 million yuan for the first half of 2025, a significant decline compared to the previous year [3] Group 4: Employee Stock Ownership Plan - The lock-up period for the company's 2024 employee stock ownership plan will end on July 16, 2025, following the approval of the plan by the board and shareholders [8] - The plan involved the purchase of 1,057,900 shares at an average price of 8.518 yuan per share, totaling approximately 9.01 million yuan [9] - After the lock-up period, the management committee will decide on the sale of shares based on market conditions, adhering to trading regulations [10]

Group 1 - Star Stone Investment recently conducted research on Yisheng Livestock and Poultry Science and Technology Co., Ltd, revealing that large white feather broilers are primarily used for processing, while the Yisheng 909 small white feather broilers are more flexible in meeting market demands [1] - The price of parent breeding chicken seedlings increased from 45 yuan per set in May to 50 yuan per set in June, indicating a rising trend [1] - The company introduced 90,000 sets of grandparent meat breed chickens from March to May, which is a significant proportion, and expects tight supply of quality parent breeding chicken seedlings in the second half of 2025, which will support prices [1] Group 2 - Yisheng Livestock plans to invest in a project to build a breeding farm for 1 million sets of parent breeding chickens and a matching feed factory, which is expected to produce about 100 million commercial breeding chickens annually upon reaching full capacity [1] - The decision on which white feather chicken breed to raise is primarily based on which breed can generate more profit [1] - The company has extensive experience in breeding pigs and is strategically positioned in the breeding source sector [1]

Company Overview - Established in 1989, Yisheng Livestock and Poultry Co., Ltd. is the largest ancestor meat chicken breeding enterprise in China and Asia, holding approximately one-third of the domestic imported breeding chicken market [1] - The company has established breeding farms in seven provinces, including Shandong and Jiangsu, and has maintained its leading position in the ancestor white feather meat chicken industry for over a decade [1] - Since 2000, the company has been building original breeding pig farms and has over 20 years of experience in this area, certified as a national core breeding farm in 2013 and re-evaluated in 2018 and 2023 [2] Market Insights - The price of parent breeding chicken has increased from 45 RMB/set in May to 50 RMB/set in June 2025 [3] - The company imported a total of 90,000 sets of ancestor meat chickens this year, accounting for over 50% of the imported ancestor meat chicken market [4] Future Projections - The supply of quality parent breeding chickens is expected to remain tight in the second half of 2025 due to a decrease in the update volume of ancestor white feather meat chickens, which will impact production [5] - The overall supply of quality commercial breeding chickens is also expected to be tight in 2025, driven by strong demand from the slaughter and breeding sectors [6] Investment Plans - The company plans to invest in the construction of a breeding farm with a capacity of 1 million parent breeding chickens, which is expected to produce approximately 100 million commercial breeding chickens annually once fully operational [7] Strategic Considerations - The choice of which white feather chicken breed to raise is primarily based on which breed can provide greater profitability for the breeding enterprises [7] - The company aims to contribute to the supply of breeding sources for the two main types of meat in China, leveraging its extensive experience and management advantages in breeding pigs [7]

Core Insights - The impact of highly pathogenic avian influenza (HPAI) from the US and New Zealand is expected to continue into 2025, with zero import of breeding stock from these countries since December 2024, leading to potential supply shortages in the domestic market [1][4] - The parent stock chick sales remain high, but the meat chicken industry chain prices have been relatively weak since 2025 [2][3] Group 1: Industry Overview - As of March 2025, the stock of breeding chickens is at a record high since 2019, with 1.3586 million breeding stock and 22.8669 million parent stock [1] - Parent stock chick sales in 2024 reached 75.2214 million sets, a year-on-year increase of 13.3% [1] - The average price of parent stock chicks in January and February 2025 was 53.63 CNY/set and 46.5 CNY/set, showing significant year-on-year growth of 43.4% and 32.1% respectively [2] Group 2: Price Trends - The prices of commodity chicks have shown a downward trend, with averages of 2.06 CNY/bird and 1.84 CNY/bird in January and February 2025, reflecting year-on-year declines of 23.2% and 58.7% [2] - White feather chicken prices were recorded at 7.41 CNY/kg, 6.05 CNY/kg, and 7.13 CNY/kg from January to March 2025, marking the lowest levels since 2018 [2] Group 3: Supply Chain Dynamics - The total breeding stock update in 2024 was 1.5007 million sets, the highest since 2014, but the update volume dropped significantly in early 2025 due to HPAI impacts [3][4] - The overseas breeding stock update is expected to decline significantly in 2025 due to ongoing outbreaks of HPAI in the US and New Zealand, which have halted imports [4]

Investment Rating - The report maintains a "Buy" rating for the company [2][4] Core Views - The company reported a revenue of 3.136 billion yuan in 2024, a decrease of 2.76% year-on-year, and a net profit attributable to shareholders of 504 million yuan, down 6.84% year-on-year. However, in Q4 2024, revenue reached 982 million yuan, an increase of 73.41% year-on-year, with net profit of 203 million yuan, up 242.33% year-on-year [1][2] - The price of commodity chicken seedlings has increased significantly since Q4 2024, contributing to improved profitability. The estimated profit from parent stock is approximately 250 million yuan, while the profit from commodity stock is around 350 million yuan [1] - The company expects a recovery in demand for white chicken consumption and restocking to positively impact profitability [1] Financial Performance Summary - In 2024, the company sold approximately 570 million commodity chicken seedlings, a decrease of 9% year-on-year, with an average selling price of 3.3 yuan per chick. The sale of parent stock was about 12 million sets, down 20% year-on-year, with an average price of nearly 39 yuan per set [1] - The company forecasts net profits of 550 million yuan, 586 million yuan, and 614 million yuan for 2025, 2026, and 2027, respectively, representing year-on-year growth rates of 9.3%, 6.3%, and 4.9% [2][3] - The financial indicators show a projected revenue increase to 3.504 billion yuan in 2025, with a growth rate of 11.7% year-on-year, and a net profit of 551 million yuan, reflecting a growth rate of 9.3% year-on-year [3][8] Stock Information - The company's stock closed at 9.67 yuan on March 28, 2025, with a total market capitalization of approximately 10.699 billion yuan [4]

Core Viewpoint - The company reported a revenue of 3.136 billion yuan for 2024, a year-on-year decrease of 2.76%, and a net profit attributable to shareholders of 504 million yuan, down 6.84% year-on-year. However, Q4 showed significant growth with a revenue of 982 million yuan, up 73% year-on-year and 26% quarter-on-quarter, driven by rising prices of commodity broiler chicks, marking a turnaround after three consecutive quarters of decline [1][2]. Group 1: Financial Performance - In 2024, the company sold 586 million white feather broiler chicks, a decrease of 9% year-on-year, primarily due to adjustments in production pace based on market conditions [2]. - The average price of commodity broiler chicks was approximately 3.45 yuan per chick, showing a slight year-on-year decline, but the company benefited from lower feed raw material prices and cost reduction efforts, leading to an estimated profit contribution of about 3.5 billion yuan [2]. - In Q4, the company sold 155 million white feather broiler chicks, an increase of 9% year-on-year and 0.5% quarter-on-quarter, with an average price of approximately 4.79 yuan per chick, up 62% year-on-year and 23% quarter-on-quarter [2]. Group 2: Shareholder Returns and Market Outlook - The company plans to distribute a total cash dividend of 218 million yuan for 2024, with total cash dividends and buyback amounts reaching 337 million yuan, accounting for 67% of the net profit attributable to shareholders [3]. - The white feather chicken product prices have been low for an extended period, but there are signs of recovery, which could positively impact the entire white feather chicken industry chain if macro consumption continues to improve [3]. Group 3: Profit Forecast and Valuation - The company maintains profit forecasts for 2025, 2026, and introduces a new forecast for 2027, expecting net profits attributable to shareholders to be 553 million yuan, 482 million yuan, and 802 million yuan respectively [4]. - The company is assigned a target price of 11.05 yuan based on a 22x PE for 2025, reflecting its competitive advantages and expected capacity release in the commodity segment [4].