2023H1 revenue decreased 0.64% year-on-year, and home net profit decreased 51.13% year-on-year. 2023H1 achieved revenue of 118.714 billion yuan (year-on-year-0.64%), net profit of 966 million yuan (year-on-year), non-return net profit of 14 million yuan (year-on-year), gross profit margin of-3.38pct to 4.15% and net profit margin of-1.14pct to 0.67%. The overall profit margin improved significantly, of which non-recurrent profit and loss accounted for a relatively large part. Mainly due to the current period did not fully meet the requirements of hedging accounting changes in the fair value of derivatives profit and loss of close to 948 million yuan, accounting for a relatively large. In addition, the company's 2023H1 expense rate is stable as a whole, with a total of 4.03% during the sales period. As the leader of kitchen food, the company has solid advantages in brand and channel, and the scale of sales has maintained steady growth.

Kitchen food sales benefited from a steady recovery in catering, with high-priced wheat stocks putting short-term cost pressure.

2023H1 kitchen food revenue-3.43% to 76.136 billion yuan, gross profit margin-0.49pct to 6.60%, sales + 9.46% year-on-year. With the recovery of food and beverage consumption, the proportion of sales of food and beverage products with low gross margin increased. However, the prices of wheat, flour and by-products declined as a whole in the first half of the year, and the cost of wheat inventory consumed by the company was higher, which led to a significant decline in flour business performance compared with the same period last year. We believe that the company has the ability of industrial chain extension and diversified development, and has successfully copied the experience of packaging edible oil to packaging flour, rice and other fields. these three kinds of products rank first in the market share of modern channels in the past three years. at the same time, the company is also expanding new fields such as seasoning, yeast, daily chemical, plant meat and central kitchen. through the extension of the industrial chain in the future, it is expected to better integrate the existing and produce synergy, optimistic about the long-term development of the new field.

Feed and oil technology industry affected by the breeding downturn and oil market, phased pressure is obvious. The company's 2023H1 feed raw materials and oil technology revenue from + 4.70% to 44.464 billion yuan compared with the same period last year, accounting for 37.45%, gross profit margin from-8.37pct to-0.32%, sales + 16.14%, cost + 14.22%. Feed raw materials industry due to the loss of pig farming downstream, and wheat and other crops to increase the substitution of soybean meal, the overall demand is low. Although the crushing volume of soybeans and rapeseed increased in the first half of the year compared with the same period last year, the higher cost of soybeans and the falling price of soybean oil led to a loss in the crushing business. In addition, due to the overall downward price of oil and oil raw materials in the oil science and technology industry, the market demand has been restrained to a certain extent, and the profit has decreased greatly compared with the same period last year.

Risk hints: abnormal weather and epidemic diseases affect the risk of periodic fluctuations in the feed industry.

Investment advice: kitchen food leader, diversified development is worth looking forward to, maintain "buy". Considering that the feed and grease technology market in the first half of this year is lower than expected, we downgrade the company's profit forecast for 2023-2025, and the estimated net profit for 2023-2025 is 21.690.2933x3.814 million respectively (originally estimated to be 38.06x5743 million), corresponding to the PE of 93-69-53 X.