Core views:
Sales volume remained stable in April, with piglets accounting for 19.3% of sales. The company disclosed a briefing on pig sales in April. It sold 5.45 million pigs in April, a decrease of 0.38% from the previous month and an increase of 2.02% over the previous year; it achieved sales revenue of 9.153 billion yuan, an increase of 0.52% over the previous year. Among them, the number of commercial piglets/piglets/breeding pigs sold by the company was 433/105/70,000, accounting for 19.3% of piglet sales, an increase of 10.6 pct over March. Piglet prices are in a relatively profitable state, and the company's piglet sales continue to grow significantly. The average sales price of the company's commercial pigs in April was 14.8 yuan/kg; the estimated average weight was 113.5 kg. From January to April, the company sold a total of 21.461 million pigs, an increase of 11.85% over the previous year; the number of commercial pigs/piglets/breeding pigs released was 1963.7/164.7/177,000, respectively.
Continuing to promote high-quality development, farming costs are expected to gradually decline. The company continues to promote high-quality development. The cost advantage of farming is obvious. The impact of the early winter epidemic led to a phased increase in costs. With the gradual improvement of various production indicators, the total cost of farming in March has dropped to 15.1 yuan/kg, down 0.7 yuan/kg from January-January. At the same time, the company's sow production capacity continues to grow. According to the investor relations activity record table, the number of sows that can be bred reached 3.142 million as of 24Q1. It is expected to increase to 318-3.2 million by the end of April, effectively supporting steady growth in future sales.
Over the past 23 years, sow stocks have continued to degrade, and production capacity gaps may gradually become apparent. By the end of the first quarter, the Bureau of Statistics announced that the number of active sows in the country was about 39.92 million, down 7.3% from the previous year; the number of pigs kept was 408.5 million, down 5.2% year on year, down 5.9% from quarter to quarter, and the level of storage was at its lowest level in 21 years. With subsequent capacity removal effects and seasonal recovery in demand, pig prices are expected to trend upward in the second quarter. Focus on the catalytic effects of factors such as future pig prices and corporate profits exceeding expectations.
Profit forecasting and investment advice. We expect the company's EPS to be 2.38, 4.04, and 5.02 yuan/share respectively in 2024-26, keeping the judgment of a reasonable value of 50.06 yuan/share unchanged, corresponding to 21 times the PE valuation in 24, and maintaining a “buy” rating.
Risk warning. Risk of fluctuations in pig prices, risk of fluctuations in raw material prices, risk of epidemic diseases, food safety, etc.