The company released its 2023 annual report. In 2023, the company achieved revenue of 3.225 billion yuan, an increase of 52.71% over the previous year; net profit to mother was 541 million yuan, an increase of 247.34% over the previous year. In the fourth quarter of 2023, the company achieved revenue of 566 million yuan, a year-on-year decrease of 17.76%; realized net profit to mother - 143 million yuan, a year-on-year decrease of 503.95%. The 2023 profit distribution plan is to distribute a cash dividend of RMB 2 (tax included) to all shareholders for every 10 shares, for a total of RMB 221 million (tax included).
Sales volume and price of chicken seedlings have increased rapidly, and profits in the main business are improving. In 2023, the company sold 645 million white feather chicken seedlings, up 12.3% year on year. The comprehensive price was 4.1 yuan/piece, up 48% year on year. The average price of the company has increased significantly. The average price of the company's chicken seedlings has increased significantly. Looking at the industry average price, according to the China Animal Husbandry Association, the average price of parent-generation chicken seedlings in 2023 was 54.5 yuan/set, up 93.3% year on year, and the average price of commercial chicken seedlings was 3 yuan/piece, up 30.9% year on year. This is compounded by high demand for overseas varieties due to the anticipated reduction in introduction in 2022.
The 909 and breeding pigs continue to expand, and two-wheel drive is moving forward steadfastly. In 2023, the company sold 76.82 million chicken seedlings, an increase of 0.5% over the previous year. Probiotic 909 small white feather broilers have the performance advantages of high meat yield, good meat quality, strong disease resistance, and high survival rate. Since its launch, supply has been in short supply. The average sales price in 2023 is 1.49 yuan/feather, and the average price of 817 chicken seedlings in the industry is 0.83 yuan/feather. The company's chicken seedlings premium is obvious. It sold 3,306 breeding pigs, an increase of 13.14% over the previous year, with an average price of 3,468 yuan/head. With the gradual release of breeding capacity in the fund-raising project, the company is steadily moving towards the strategic goal of breeding chickens and two-wheel drive for breeding pigs.
Investment advice: Considering the current storage position, we expect the chicken seedlings boom in 2024 to lower the price of chicken seedlings to 600 million according to the company's forecast 2024 sales volume. Thus, we expect to achieve net profit of 10.55, 5.48, and 632 million in 2024-2026, +95.1%, -48.0%, and +15.2% year-on-year, respectively, corresponding to 10.7xPE in 2024, maintaining the “buy” rating.
Risk warning: Fluctuations in the price of chicken seedlings, fluctuations in the price of raw materials, the occurrence of chicken epidemics, etc.