The Zhitong Finance App learned that Haitong International released a research report stating that maintaining the “superior to the market” rating of Excellent Animal Husbandry (09858), the company's revenue for 2024-2026 is estimated to be 207.5/227.24.7 billion yuan, and net profit to mother is 4/887 billion yuan. The target price was lowered from HK$2.85 to HK$2.22. The company achieved revenue of 18.69 billion yuan in 23, +3.6% year-on-year, and net profit to mother of 1.05 billion yuan, from profit to loss (profit of 410 million yuan in '22).

According to the report, Youran Animal Husbandry's revenue from raw milk was +18.9% year-on-year to 12.9 billion yuan, of which raw milk sales were +26.5% year-on-year to 2.945 million tons, and the average unit price of raw milk was -6% to 4.38 yuan/kg. In terms of volume and price breakdown, the company's production can be expected to continue to grow steadily. In '23, the number of dairy cows kept in the Group was about 583,000, +16.7%; adult cows accounted for +2.4 pct year on year; the annual yield of adult cows (excluding Juanshan cows) from high-quality fresh milk ranches was about 12 tons, +5.3% year over year.

The company's yield efficiency continues to improve, and it is expected that the company's raw milk sales will maintain double-digit growth in the future. However, the gross margin of the raw milk business was -2.8 pct to 28.6% year over year, mainly because the company's performance is closely related to the fluctuation cycle of raw milk prices, and milk prices are an important factor. The bank is not pessimistic about future raw milk prices. Currently, factors such as the withdrawal of small and medium-sized ranches, the narrowing of domestic and foreign price differences, and feed still at a high level all form the bottom support for raw milk prices. At the same time, considering the duration of the raw milk cycle, the bank expects milk prices to stop falling and rebound between 3Q24-1Q25.