The results for the 3rd quarter increased significantly, which was basically in line with market expectations. The company released its quarterly report for the year 24, and achieved revenue of 75.42 billion yuan (yoy +16.6%) in the first 3 quarters, with net profit to mother of 6.408 billion yuan (yoy +241.5%). The high increase in performance was mainly due to factors such as the recovery in livestock and poultry prices and the decline in breeding costs; net profit after deduction was 6.46 billion yuan (yoy +233.3%), and non-recurring profit and loss mainly stemmed from investment profit and loss, etc. By the end of September, the company's balance ratio had dropped to 54.86%, down 4.1pct. In the 3rd quarter, the company achieved revenue of 28.662 billion yuan (yoy +22.0%), net profit to mother of 5.081 billion yuan (yoy +3097%), and dividend plan: 1.5 yuan (tax included) for every 10 shares.

Pigs: Benefiting from the upward trend in the industry in the 3rd quarter, the cost continued to lead the industry. According to the company's monthly operating announcement, in the first 3 quarters, the company sold 21.562 million pigs (yoy +17.7%). In the 3rd quarter of a single quarter, the company sold 7.188 million pigs (yoy +9.9%); the average sales price was 19.48 yuan/kg. The estimated average profit was about 680-700 yuan/head, and the estimated overall breeding cost was about 13.8-14.0 yuan/kg. The company continues to reduce costs and increase efficiency, leading the industry in farming efficiency, and there is still room for future cost reduction. Furthermore, the company continued to optimize its population structure. By the end of the 3rd quarter, the company's productive biological asset balance was 4.849 billion yuan, up 1.2% from the end of the 2nd quarter.

Broiler: Sales increased 4.7% year-on-year in the 3rd quarter, and production remained stable at a high level. In the first 3 quarters, the company sold 0.871 billion broilers (yoy +1.0%); in the 3rd quarter, the company sold 0.323 billion broilers (yoy +4.73%), with an average sales price of 13.14 yuan/kg. The estimated profit of a single feather was 2.5-2.7 yuan/feather, and the total cost of breeding was estimated to be about 12 yuan/kg. The company's broiler production performance has remained at a historically high level, and its cost control capabilities continue to lead the industry. At the same time, it has benefited from declining feed costs, and meat and poultry farming has achieved good profits.

Profit forecasting and investment advice. We expect the company's EPS to be 1.571.91 and 2.55 yuan/share respectively in 2024-26, maintaining the view that a reasonable value of 26.73 yuan/share remains unchanged, corresponding to the 24-year PE valuation 17 times, maintaining the “buy” rating

Risk warning. Risk of fluctuations in pig prices, risk of fluctuations in raw material prices, risk of epidemic diseases, food safety, etc.