Core Viewpoint - In the first half of 2025, despite the overall low chicken prices affecting many companies, Shengnong Development (002299.SZ) reported a slight increase in revenue and a significant rise in net profit, indicating strong profitability growth [1][2]. Financial Performance - Shengnong Development achieved operating revenue of 8.856 billion yuan, a year-on-year increase of 0.22%, while net profit reached 910 million yuan, a substantial growth of 791.93%. The non-recurring net profit was 376 million yuan, up 305.44% year-on-year [2]. - The company's gross profit margin for the first half of 2025 was 11.97%, an increase of 2.73 percentage points year-on-year, and the net profit margin was 10.39%, up 9.42 percentage points compared to the same period last year [4]. - In Q2 2025, the gross profit margin was 11.80%, a year-on-year increase of 1.15 percentage points, while the net profit margin was 16.16%, up 12.76 percentage points year-on-year [4]. Cost Management - Total expenses for Shengnong Development in the first half of 2025 were 639 million yuan, a decrease of 199,700 yuan year-on-year, with an expense ratio of 7.22%, down 0.02 percentage points from the previous year. Financial expenses saw a notable reduction of 20.93% [5]. Strategic Developments - The growth in performance is attributed to three main factors: the success of the company's C-end layout with retail channels growing over 30%, improvements in self-owned seed sources leading to over 10% reduction in comprehensive meat production costs, and the acquisition of Sun Valley, which enhanced operational efficiency and contributed significantly to earnings [6]. - The acquisition of Sun Valley was completed in April 2025, with Shengnong Development acquiring the remaining 54% stake for 1.126 billion yuan, achieving full control [6][9]. - Sun Valley operates a complete industrial chain including feed production, breeding, hatching, and processing, with an annual chicken production capacity of 65 million and food processing capacity of 90,000 tons [8]. Market Outlook - Despite low chicken prices in the first half of the year, Shengnong Development's performance is expected to improve further with the anticipated industry recovery in the second half of 2025, as chicken prices have started to rise since late July [9].