23Q1 pig price month-on-month contraction, the company's livestock-related business under pressure. In 2022, the company's revenue was from + 1.07% to 1.163 billion yuan, the net profit from home was from-47.32% to 70 million yuan, the revenue from 2023Q1 was from-9.14% to 233 million yuan, and the net profit from home was from-41.59% to 11 million yuan. The decline in the company's performance is mainly affected by the impact of the downturn in pig prices on the demand for animal protection products. we believe that at present, the stock of breeding sows can enter the link channel, superimposing the continuous disturbance of non-plague to the breeding industry, and pig prices are expected to be strong in the medium term. Or it will bring animal protection demand to pick up, and the company's main business performance is expected to continue to improve.

Feed replacement + raw material substitution + large-scale breeding, the company's main business is expected to benefit from market expansion. We believe that, from a top-down point of view, after the implementation of the feed replacement policy, the demand for replacement products is gradually increasing, and at present, the mainstream replacement programs are mainly based on the combined application of enzyme preparations, microecological preparations and medicinal plant extracts. at the same time, in recent years, due to the high price of feed raw materials, the development of new feed raw materials such as soybean protein to further promote the development of enzyme preparations, the company is expected to benefit from market expansion in the future. From a bottom-up point of view, the company has established a leading position in the field of enzyme preparation and microecology by relying on continuous R & D investment and core technological breakthroughs, and the existing sales model is mainly direct saling. relying on technology and product advantages, it is expected to meet the high-quality product needs of large-scale enterprises in the process of large-scale aquaculture, and then share the dividend of large-scale growth.

The systematic production capacity layout of the main industry has been basically completed, and the new production capacity of food probiotics is expected to contribute to the increase. In 2022, the systematic production capacity layout of the company's core business plate has been basically completed, including the Azure Biotechnology Center and the plant microecological preparation project has been successfully put into operation, and the Animal Protection Industrial Park is gradually put into production and operation; Weifang Condien refined enzyme production line construction project is in smooth preparation and construction, is expected to be put into production and operation in May 2024. In the new business of food probiotics, in terms of research and development, the company has set up a nutrition and health technology center to form four R & D platforms: strain identification, functional verification, analysis and screening, and strain improvement. In terms of cooperation, the company established a joint venture with the world's top 500 ADM in 2022-Aidi League Azure Biotechnology (Shandong) Co., Ltd., currently the two sides are jointly preparing to build a probiotic factory, with a total investment of about 400 million yuan, will build a new functional probiotic powder raw material production capacity of 100tons, probiotic liquid product production capacity of 100tons, is expected to be officially put into production in early 2025. The domestic probiotic market has broad prospects and is in a period of rapid growth, the company's forward-looking layout of probiotic business is expected to open a new growth increment.

Risk hint: the risk of outbreak of large-scale uncontrollable livestock and poultry diseases and the risk of price fluctuation of raw materials.

Investment suggestion: the company is a microbiological leader, and the growth margin is expected to open gradually. The company's 23-25 net profit is expected to reach 1.20 to 1.33 million, corresponding to an EPS of 0.72 and 0.80, respectively, and a PE of 24.8, 22.4 and 21.9 times, respectively, maintaining the "overweight" rating.