Items:

Company announcement: the company issued a half-year performance forecast for 2023. It is estimated that the net profit attributable to shareholders of listed companies in the first half of 2023 will reach 1.25 billion yuan to 1.35 billion yuan, while the net profit of returning home in the same period last year will be 184 million yuan, an increase of 778.57%, 832.86% over the same period last year. It is estimated that the net profit after deducting non-recurring profits and losses in the first half of 2023 will reach 13.1-1.41 billion yuan, an increase of 1432.33% and 1534.04% over the same period last year. The main reason for the significant increase in performance during the reporting period over the same period last year was the substantial delivery of sales income from the company's Shanhai Royal Garden real estate project during the reporting period, while there was no real estate project delivery carry-over sales income in the same period last year.

Guoxin agricultural point of view: 1) Jingji Zhinong issued a half-year performance forecast for 2023, which is expected to achieve a net profit of 12.5-1.35 billion yuan in the first half of 2023, an increase of 778.57%, 832.86% over the same period last year. The rapid growth of the company's 2023H1 performance is mainly due to the substantial delivery of sales revenue from the Shanhai Royal Garden real estate project. 2) the operation of the company's pig business is sound, the breeding column is greatly expanded, and the cost continues to decline. In terms of fencing, 2023H1 achieved a total of 843200 pigs, an increase of 66 percent over the same period last year. In terms of cost, the fattening cost of the company in 2022 is 16.9yuan / kg,2023 January-February of the year due to seasonal disease, it rebounded to 17.42yuan / kg, but it has improved steadily since the first quarter. The average production cost of fattening pigs in June 2023 has reached 16.3yuan / kg, and the company's fattening cost target is 15.67yuan / kg in 2023. it is expected that in the future, with the full production of the breeding project and supporting self-produced feed to follow up, there is more room for optimization at the cost end. 3) capacity layout in Guangdong, the column is expected to continue to grow. The company's closed-group breeding system has been built, with a completed production capacity of 2.25 million heads and a land reserve project capacity of about 2 million heads, with relatively abundant capacity reserves; from the perspective of certainty: the company's real estate project operation is sound, short-term debt repayment pressure is small, as of the end of 2023Q1, the company's monetary capital has reached 1.569 billion yuan, relying on abundant cash reserves and bank credit balance, the company's breeding business is expected to realize production capacity and performance. 4) risk hint: the death of uncontrollable pig epidemic occurred in the industry, the cost pressure caused by the uncontrollable rise in grain raw material prices, and the profit fluctuation caused by large fluctuations in pig prices. 5) Investment suggestion: as the new breeding target of self-propagating and self-supporting buildings, the company has the triple characteristics of rapid growth, excess income and sufficient funds, and is expected to become the growth target of this cycle. Considering that pig prices fell more than expected in the first half of 2023, pig prices are expected to usher in a cyclical reversal in 2024-2025, so we raise our profit forecast for 2024. It is estimated that the company's net profit for 2023-2025 will be 1.36 billion yuan, respectively (the previous estimate for 2023-2024 net profit will be 1.3660 million yuan respectively), and the EPS will be 2.59 billion yuan, 2742.56 yuan, respectively, maintaining the "buy" rating.

Risk hint

The death of uncontrollable pig epidemic occurred in the industry, the cost pressure caused by the uncontrollable rise in the price of grain and raw materials, and the profit fluctuation caused by the sharp fluctuation of pig price.