鸡苗销售短期缩量，利润随单价环比改善。1）1Q24 公司销售白羽肉鸡鸡苗1.3 亿羽，环比/同比-8.2%/-13.5%；单价4.2 元/羽，环比/同比+42.3%/-19.5%；收入环比/同比+30.6%/-30.3%至5.5 亿元；苗价环比回暖带动主业收入、盈利环比回升，我们估算该业务盈利1.5 亿元左右，环比改善较为明显。2）益生909 鸡苗销售0.23 亿羽，环比/同比+66.6%/-2.6%；收入0.29 亿元，环比/同比+73.8%/-32.9%，该业务经营环比改善。3）种猪销售3,175 头，环比/同比+163.3%/+709.9%；收入0.10 亿元，环比/同比+130.8%/ +484.2%，我们估算整体养猪业务或小幅亏损。1Q24 net profit to mother turned a month-on-month loss into a profit, in line with our expectations
Yisheng Co., Ltd. announced 1Q24 results: 1Q24 revenue of 690 million yuan, net profit attributable to mother of 110 million yuan, +21.4% month-on-month year/loss turned loss into profit, and -24.8%/-65.2% year-on-year. The results were in line with our expectations. The company's revenue and performance improved month-on-month and year-on-year pressure, mainly due to the month-on-month improvement in the price of 1Q24 chicken seedlings, while the 1Q23 chicken seedlings price base was relatively high.
Development trends
Sales of chicken seedlings declined in the short term, and profits improved month-on-month with unit prices. 1) The 1Q24 company sold 130 million white feather broiler chicken seedlings, -8.2%/-13.5% month-on-month; unit price 4.2 yuan/feather, +42.3% month-on-month/-19.5%; revenue +30.6%/-30.3% month-on-month to 550 million yuan; the month-on-month recovery in seed prices led to a month-on-month recovery in main business revenue and profit. We estimate that the business's profit is around 150 million yuan, with significant month-on-month improvement. 2) Yisheng 909 chicken seedlings sold 223 million birds, +66.6%/-2.6% month-on-month; revenue of 0.29 million yuan, +73.8%/-32.9% month-on-month. 3) Sales of 3,175 breeding pigs, +163.3%/+709.9% month/year over year; revenue of 100 million yuan, +130.8%/+484.2% month-on-year. We estimate the overall pig farming business or a small loss.
Profitability rebounded month-on-month and declined year-over-year. 1) Gross profit margin: Benefiting from the month-on-month recovery in chicken seedlings prices in 1Q24, the company's 1Q24 gross margin was +29.4ppt to 30.4% month-on-month, and -15.6ppt compared to the higher 1Q23 base. 2) Expense ratio: The cost ratio during the 1Q24 period was 7.6pp/ +2.3ppt to 11.6%. Among them, the financial expense ratio benefited from a decrease in debt levels, which was -1.2pp/ -1.1ppt month-on-year; fluctuations in sales and management expenses were mainly due to changes in revenue scale. 3) Investment loss: Investment loss increased to -13.35 million yuan year on year. Lower chicken prices continued to put pressure on the performance of the participating company Baoquanling in Beidahuang. 4) Under the combined influence, the company's profitability improved month-on-month to a relative boom level. The 1Q24 net margin was +41.1ppt to 15.9% month-on-month, and the year-on-year -18.4ppt series had a high 1Q23 base.
The chicken breeding boom may have picked up marginally in 24 years, and the 909 layout of chicken breeding, pig breeding and probiotics still has potential. 1) In the short term, we determine that under the influence of restrictions on the introduction of overseas ancestral breeding since '22, the supply of commercial chicken seedlings may have declined slightly year-on-year in '24, compounded by expectations of reversal in pig prices to boost demand for chicken substitutes. It is expected that chicken fry prices will remain relatively strong this year. 2) Looking at the long term, on the one hand, the company continued to expand its main breeding capacity, acquired 30% minority shareholders' equity in Weifang Yisheng in 24, and changed the use of funds raised to build a total of 30.96 million commercial chicken surrogates; on the other hand, the company actively expanded its business outreach and sought new growth points. The new Yisheng 909 small broiler breed plans to achieve a production capacity of 300 million chickens by the end of the 14th 5th century. The continued release of breeding pig production is also expected to drive steady growth in sales.
Profit forecasting and valuation
The current stock price corresponds to 24-13 P/E. We kept our net profit of 889.614 million yuan unchanged in 24/25, and maintained a target price of 13.0 yuan. The target price corresponds to 17/23 times P/E in 24/25, with 33% upside. Maintain outperforming industry ratings.
risks
The risk of large-scale animal outbreaks; the risk of a sharp rise in introduction; uncertainty about import policies.
