The company released its report for the first quarter of 2024. In the first quarter of 2024, the company achieved revenue of 687 million yuan, a year-on-year decrease of 24.75%; realized net profit of 109 million yuan, a year-on-year decrease of 65.16%, turning a loss from month to month.
The quantity of chicken seedlings decreased and prices increased, and the boom recovered month-on-month. In the first quarter of 2024, the company sold 130 million white feather chicken seedlings, a year-on-year decrease of 13.5%. The comprehensive sales price was 4.2 yuan/piece, down 19% year-on-year and 42.3% month-on-month. The company's chicken seedlings business volume decreased and increased in the first quarter, mainly due to a decrease in the import volume of ancestral chicken since May 2022, which was transmitted to a reduction in commodity prices, and overseas varieties began to be in short supply. Looking at the average price of the industry, according to the China Animal Husbandry Association, the average price of chicken seedlings produced by parents was 35.9 yuan/set in the first quarter of 2024, down 24.3% from the previous month, and the average price of commercial chicken seedlings was 3.6 yuan/piece, up 76% from the previous month. Although downstream prices in the industry are currently weak, the upstream boom is good due to lack of supply, which is beneficial to the company's chicken seedlings prices.
There was a marked increase in pig breeding, and sales prices remained stable month-on-month. In the first quarter of 2024, the company sold 22.76 million probiotic 909 chicken seedlings, a year-on-year decrease of 2.6%. The average sales price was 1.28 yuan/piece, and the average price of 817 chicken seedlings in the industry was 0.81 yuan/feather. The company maintained a premium compared to the industry. It sold 3,175 breeding pigs, an increase of 709.95% over the previous year, with an average price of 3007 yuan/head, down 1.1% from the previous month. With the gradual release of breeding capacity in the fund-raising project, the company is steadily moving towards the strategic goal of two-wheel drive for breeding chickens and breeding pigs.
Investment advice: Net profit due to mother is expected to be achieved in 2024-2026 of 10.55, 548, and 632 million, respectively, +95.1%, -48.0%, and +15.2% year-on-year, corresponding to 10xPE 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.