The company released its quarterly report for the third quarter of 2023. The company achieved operating income of 807.12 million yuan in the first three quarters of 2023, roughly the same as the same period last year. The attributable net profit was-415.64 million yuan, compared with-8495.52% in the first three quarters of 2022 (4.95 million yuan in the first three quarters of 2022). EPS-1.95 yuan, the weighted average ROE was-14.35%, down 14.51% from the same period last year. Among them, Q3 realized operating income of 251.28 million yuan in 2023,-27.40% year-on-year, and attributable net profit of-85.53 million yuan,-233.54% of the same period last year. In 2023, the net profit attributable to Q1\ Q2\ Q3 in a single quarter was-190.88 million yuan,-139.24 million yuan and-85.53 million yuan, respectively. By the end of the third quarter, the company's asset-liability ratio was about 47.82%, making it relatively financially sound.
The company sold 504200 live pigs in the first three quarters of 2023, an increase of 38.48 percent over the same period last year, with an operating income of 769 million yuan, an increase of 1.18 percent over the same period last year. In the first half of 2023, affected by the depressed pig prices, the pig farming industry as a whole was in a loss area. In the third quarter, with the periodic rebound of pig prices, the average profit level of domestic self-breeding and purchased piglet farming industry rebounded from-300 yuan and-342 yuan per head in the first half to-108 yuan and-185 yuan per head in Q3, respectively. Benefiting from the rebound in Q3 domestic pig prices, the company's pig farming business has improved in Q3.
Investment suggestion
We estimate that the company's 2023-2025 net profit will be-3.76 million yuan, corresponding to an EPS of-1.77, 0.48, and 3.29 yuan, and the current share price will be 1.8 times of PB in 2023, maintaining a "overweight-B" rating.
Risk tips: livestock and poultry epidemic risk, natural disaster risk, raw material price rise risk, poor transportation risk.