生猪出栏量增长30%至708 万头，保持较快增长势头。据3 月25 日公司公告，1）生猪：出栏量快速成长，以量补价带动收入。23 年生猪营收同比+4.3%至122.5 亿元，生猪销量同比+30.4%至708.4 万头，其中商品猪/种猪/仔猪同比+33.9%/-34.4%/-5.7%至666.0/2.1/40.2 万头，商品猪占比达94%；平均售价同比-19.5%至14.75 元/千克。2）家禽：23 年家禽营收同比+3.7%至33.3 亿元，黄羽肉鸡/鸡苗及蛋销量同比+12.9%/+1.8%至0.89 亿羽/0.99 亿枚，黄羽肉鸡/鸡苗及蛋售价同比-7.6%/-18.2%至36.6 元/羽、0.9 元/枚。3）辅助产品：23 年辅助产品营收同比+640.5%至5.7 亿元，鲜肉业务投产带动收入同比高增，其中9.4 万头屠宰生猪源自内部供应。2023 results are in line with market expectations
Dekang Agriculture and Animal Husbandry announced its 2023 results: revenue of +7.4% year over year to RMB 16.16 billion, taking into account changes in fair value of biological assets, net profit of -2.77 billion yuan to -1.78 billion yuan year-on-year, and net profit not taking into account changes in fair value of biological assets was -1.89 billion yuan to -1.28 billion yuan year-on-year. The loss in performance was mainly due to low pig prices in 2023, which was in line with market expectations.
Development trends
The number of pigs released increased by 30% to 7.08 million, maintaining a relatively rapid growth trend. According to the company's announcement on March 25, 1) Pigs: The number of pigs sold is growing rapidly, and revenue is driven by volume supplements. In '23, pig revenue was +4.3% to 12.25 billion yuan, and pig sales were +30.4% to 7.084 million heads, of which commercial pigs/breeders/piglets were +33.9%/-34.4%/-5.7% to 666.0/2.1/40.2 million heads, accounting for 94% of commercial pigs; the average sales price was -19.5% to 14.75 yuan/kg. 2) Poultry: Poultry revenue in '23 was +3.7% to $3.33 billion, sales of yellow feather brooder/chicken seedlings and eggs were +12.9%/+1.8% YoY to 89 million birds/99 million pieces, and sales price of yellow feather brooder/chicken seedlings and eggs was -7.6%/-18.2% to 36.6 yuan/feather, 0.9 yuan/piece. 3) Auxiliary products: Revenue from ancillary products was +640.5% year-on-year to 570 million yuan in '23. The commissioning of the fresh meat business led to a year-on-year increase in revenue. Of these, 94,000 slaughtered pigs came from internal supply.
The dividends of high-quality pig breeding and efficient management are gradually being released, and the advantages of high growth and low cost continue to be strengthened. 1) High growth: The company has sufficient reserves of pig breeding capacity. As of the end of 23, the company's core breeding group/purebred pig population was 148,800 heads, respectively. We estimate that the company can currently keep 38-400,000 sows, or support the company's production volume of 9 million in 2024. 2) Low cost: The company's own breed of high-quality E series boars is promoted internally, management continues to improve, and the enthusiasm of cooperative farmers continues to increase, driving efficiency and cost reduction. We estimate that the total cost of the company's 23 pigs is about 16.0 yuan/kg. According to the company's official account, the meat ratio of E-series pig products can be reduced by more than 0.1 yuan. We estimate or contribute a 0.3 yuan/kg improvement. We expect the full cost of the company's 24 pigs to drop to less than 15 yuan/kg.
The “No. 2 farm” model is asset-light, has strong binding, and high efficiency, and opens up a new model for pig enterprise expansion. On the one hand, the company's growth rate in the past 3 years has been among the highest among listed companies, and its cost level has remained at the top of the industry, and its management capabilities have been verified. We estimate that the company's 20-23 listing CAGR was as high as +73%.
On the other hand, the company industry pioneered the “No. 2 Farm” sow surrogacy model, creating the foundation for long-term high-quality expansion. We estimate that at the end of 23, the average net assets of the company's pig heads were 544 yuan, and the industry generally exceeded 1,000 yuan; the ROA of 1H23 Cooperative No. 2 Farmer/Shenwan Agriculture, Forestry, Animal Husbandry and Fishing sector was 17%/2%. We believe that Dekang has taken the lead in upgrading and iterating the domestic pig industry to the Danish model, with potential capacity expansion space exceeding 10 million heads.
Profit forecasting and valuation
We basically maintain our 2024/25 net profit forecast of $1,44/3.81 billion. The current stock price corresponds to 12.8/4.6 times P/E in 2024/25, maintaining an outperforming industry rating. Maintain the target price of 60 yuan, corresponding to 14.4/5.2 times P/E in 2024/25, corresponding to 12.8% upward space.
risks
Pig prices are lower than expected, upward pressure on costs, release is lower than expected, epidemic and policy risks.
