The company released its quarterly report for the third quarter of 2022. In the first three quarters of 2022, the company achieved operating income of 807.24 million yuan, a year-on-year decline of 3.81%, a year-on-year net profit of 4.95 million yuan, a year-on-year decline of 97.91%. The weighted average ROE was 0.16%, down 10.19% from the same period last year. Among them, in 2022, Q3 realized operating income of 346.12 million yuan, an increase of 87.55% over the same period last year, and the attributable net profit was 64.04 million yuan. Q3's attributable net profit in a single quarter turned from loss to profit, with a substantial increase over the same period last year.

The company produced 364100 pigs in the first three quarters of 2022, an increase of about 45 percent compared with 251100 in the same period last year. The average sales price of commercial pigs was 22.37 yuan / kg, with a sales income of 760 million yuan, an increase of 1.33 percent over the same period last year. Affected by the increase in the price of feed raw materials, the company's Q3 complete breeding cost increased slightly in a single quarter, about 18.4 yuan / kg. In the third quarter, with the further rebound of pig prices, the profit level of domestic self-breeding and purchased piglets rose sharply from-329 yuan and-78 yuan per pig in the first half to 577 yuan and 731 yuan per head of Q3, respectively. Benefiting from the rebound in domestic pig prices, the company's pig farming business Q3 is much better than Q2. At present, the company has about 53000 sows, including 41000 sows and 12000 reserve sows.

Looking forward to the fourth quarter, driven by the peak season demand of domestic meat consumption, domestic pig prices are expected to remain high, and the company Q4 is expected to continue to make a good profit.

Investment suggestion

It is estimated that the net profit of the company returning to the parent company from 2022 to 2024 is 0.55Universe 258Compact 807 million yuan, corresponding to EPS 0.26Universe 1.21Universe 3.79 yuan, PE is 114-24-8 times, the current share price is 2 times corresponding to 2022 PB, maintaining the "overweight-B" rating.

Risk hint

The risk of epidemic situation of livestock and poultry, the risk of natural disasters, the risk of rising prices of raw materials, the risk of poor transportation.