The company released a pig sales briefing. In October 2023, the company sold 162,600 pigs (including 0.33 million piglets), with sales revenue of 271 million yuan; the average sales price of commercial pigs was 15.04 yuan/kg.
From January to October 2023, the company sold 1,515,400 heads of pigs (including 207,700 piglets), with cumulative sales revenue of 2,314 billion yuan.
The scale of listing is expected to continue to grow rapidly. From January to October '23, the company sold 1,515,400 pigs, +50.91% year-on-year, with cumulative sales revenue of 2,314 billion yuan, +31.93% year-on-year. In terms of production capacity, as of the end of September '23, the company had 113,000 sows (including about 98,000 basic sows and 15,000 backup sows), with a production capacity of about 2 million heads of reserve land that has already been leased. The continuous expansion of the company's production capacity has led to rapid growth in the number of pigs released. It is estimated that the number of pigs released by the company for the full year of 23 is about 1.9 million, an increase of about 50% over the previous year. In 2014, the company plans to release more than 2.8 million heads, of which about 2.25 million heads for self-breeding and 600,000 heads for surrogacy.
Farming costs have improved markedly, and there is still room for decline in the future. The average breeding costs for the company's 23Q1 and 23Q2 fattening pigs were 17.4 and 16.7 yuan/kg, respectively. In September '23, the average breeding cost of fattening pigs was about 15.3 yuan/kg, and the average cost of weaning piglets was about 390 yuan/head; in September '23, the company's PSY was about 25 heads, the survival rate of weaning and fattening was about 92%, and the meat ratio was about 2.6. All indicators improved from the beginning of the year. By continuously strengthening pig farm health and fine management, improving pig health, and improving breeding efficiency by optimizing feed formulations and precise nutrition, etc., the company still has a lot of room for reduction in breeding costs in the future. It is estimated that the cost of fattening pigs will drop to less than 14.4 yuan/kg by the end of the year.
Investment suggestions: In 2023, 2024, and 2025, the company's net profit is estimated to be 1.42 billion yuan, 1.16 billion yuan, and 1.19 billion yuan respectively, up 84%, -18%, and 2% year-on-year respectively. The current stock price corresponding to PE is 6.8, 8.3, and 8.1 times, respectively. Maintain the buy rating.
Risk warning: risk of fluctuations in livestock and poultry prices, risk of a sudden outbreak of the epidemic.