The net profit of 2023Q1-Q3 is 95.36 million yuan. In the first three quarters of YoY-15.1%2023, the company realized operating income of 654 million yuan, year-on-year + 16.0%, and realized net profit of 95.36 million yuan,-15.1% compared with the same period last year. Among them, 23Q3 realized income of 171 million yuan, + 37.7% of the same period last year, and realized net profit of 20.79 million yuan, + 12291% of the same period last year, mainly due to normal fluctuations under the small base of off-season sales. We maintain the profit forecast and estimate that the EPS of the company from 2023 to 2025 will be 0.36,0.46,0.58 respectively. With reference to the comparable company's 31-fold PE valuation in 2024, and considering that the company's GM corn varieties are the first to pass the examination and have the advantage of first-mover, we give the company 39 times PE in 2024, with a target price of 18.00 yuan, maintaining the "overweight" rating.
The advance payment is + 24% compared with the same period last year, and the prosperity of the corn seed industry is expected to rise.
At the end of Q3, the advance payment of the company was 1.07 billion yuan, + 24% year-on-year, and + 17pct over the previous year. We analyze that the main reason is that the price of corn is at a historically high level, which effectively promotes the planting enthusiasm of downstream farmers, while the company continues to increase marketing efforts and further enhance the brand advantage of corn seeds. Q3 is the off-season of traditional seed sales, and the low base makes the company's net profit fluctuate greatly. The company's gross profit margin in the first three quarters was 30.6%, compared with the previous year-2.6pct, mainly due to a significant increase in the cost of seed production except corn seeds. On the whole, the company's main business corn seed management is sound, other business is a slight drag.
With the acceleration of GM commercialization, the leader of the seed industry is expected to benefit.
On October 17, the Ministry of Agriculture and Village announced the list of the first batch of genetically modified crops approved by the first trial, of which the company was approved a genetically modified corn variety. Considering that the next sales season is about to start, the company is expected to take advantage of the first-mover advantage to seize the market and further increase its market share. 94% of the company's revenue in the first half of the year comes from corn seeds, and under the background of accelerated GM and high corn prices, we believe that its subsequent growth is more flexible. From the perspective of market position, the company is the leader of hybrid corn, is the first national pilot enterprise to implement the integration of breeding, reproduction and promotion, has a sound commercial breeding system, rich reserves of germplasm resources, and strong overall R & D strength.
The target price is 18.00 yuan, maintaining the "overweight" rating
The genetically modified corn varieties of the company are the first to pass the examination and approval, and have the leading R & D advantages of cross breeding, which is expected to further increase the market share and have a broad space for development under the background of technological upgrading of the seed industry. We estimate that the 23-25 year net profit of the company is 3.13,4.01 and 513 million yuan respectively, corresponding to EPS 0.36,0.46,0.58 yuan respectively, and the target price is 18.00 yuan, maintaining the "overweight" rating.
Risk hints: the progress of the promotion of genetically modified varieties is not as expected, the effect of transgenic production is not as expected, the supervision of the seed industry is not as strong as expected, serious natural disasters occur, the performance of grain prices is not as expected, and so on.