Core viewpoints

The company's 23Q3 realized revenue of 10.185 billion yuan, an increase of 4.62% over the same period last year, an increase of 14.89% over the previous year, and a net profit of 64.8981 million yuan, down 78.58% from the same period last year and an increase of 244.87% over the previous year. The company's 23Q3 feed plate profit is about 110 million yuan, and the net profit per ton is about 94 yuan.

Looking forward to the future, the peak consumption season is expected to boost the breeding market, the company's performance is expected to improve.

Event

According to the company's report for the third quarter of 2023, the company achieved revenue of 26.893 billion yuan in the first three quarters, an increase of 14.33% over the same period last year, and a net profit of 39.5347 million yuan, down 88.69% from the same period last year.

Brief comment

1. Revenue has maintained growth and performance has improved month-on-month.

The company's 23Q3 sales gross margin is 5.38% (year-on-year-1.63pcts, month-on-month + 0.34pcts), and net sales margin is 0.58% (year-on-year-2.87pcts, month-on-month + 1.21pcts). In terms of cost:

The company's 23Q3 sales / management / R & D / financial expenses are 1.98 trillion yuan respectively, with year-on-year changes of + 7%, 13%, 10%, and 20%, respectively, compared with the previous year.

2. Feed sales increased slightly, while profit per ton declined slightly.

The company sold 1.17 million tons of 23Q3 feed (year-on-year + 1 per cent), of which pig feed sales were-5 per cent year-on-year (industry prosperity declined year-on-year and high base in the same period last year), poultry sales were + 15 per cent year-on-year, and ruminant sales were-7 per cent year-on-year (mainly due to poor downstream farming). The profit of the company's 23Q3 feed plate is about 110 million yuan, and the net profit per ton is about 94 yuan, which is about 10 yuan / ton lower than that of 23Q2 (mainly due to the price fluctuation of ① raw materials; the prosperity of farming downstream of ② is low, and the willingness to purchase high-quality feed is insufficient; competition in the ③ industry intensifies, and the company appropriately gives benefits to downstream customers). The company actively develops large-scale farms and large customers, and the company's feed sales have increased by about 10% throughout the year.

3. The loss of meat and poultry business has narrowed, and the cost of pig breeding has been gradually improved.

The company 23Q3 slaughtered 250 million meat and poultry feathers (year-on-year + 25%), and the plate lost about 15 million yuan (including 7 million yuan impairment). Calculated on the basis of 45% equity ratio, the company lost 0.07 yuan per feather after excluding the impairment provision (the industry feather lost 0.4 yuan). Looking forward to the future, the white chicken boom may pick up under the boost of the peak consumption season, superimposing the company's cost advantages and capacity release, and the plate performance is expected to improve.

The company 23Q3 fattened 200000 pigs (year-on-year growth), pig farming plate loss of about 40 million yuan (including 8 million yuan impairment), pig breeding cost of about 17.5 yuan / kg, improved compared with the previous period. The company plans to produce 1.1 million pigs in the whole year. Looking forward to the future, the company will actively promote cost reduction and efficiency and improve production performance, and plate losses are expected to gradually narrow.

Take a comprehensive view of the company's performance inflection point or gradually approaching, looking forward to next year's performance may have a higher growth, maintain the "buy" rating.