occurrences

The company disclosed its 2024 three-quarter report. The company's 2024Q3 revenue was 2.038 billion yuan, an increase of 49.94% over the previous year, and net profit attributable to shareholders of listed companies was 0.248 billion yuan. 2024Q1-Q3's revenue was 5.271 billion yuan, up 36.05% year over year.

Aquaculture production capacity is relatively abundant, reducing costs and increasing efficiency

2024Q1-Q3 listed a total of 3.1073 million pigs, a year-on-year increase of 49.44%. Revenue from the domestic pig sales and frozen meat business increased by 47.79% and 18.92% year-on-year. In the first half of 2024, a new fat pig farm was delivered, adding 0.0952 million heads of fat pig production capacity per year. By the end of June 2024, the company was able to raise 0.2328 million sows. With the improvement of refined management, the scale advantage will be further highlighted. The company's cost reduction and efficiency are obvious. The full production rate of sows has increased by about 10% compared to the beginning of the year, the performance index of sows has improved, and the cost of releasing piglets in July decreased by more than 20% compared to the beginning of the year.

Feed production is growing rapidly, and slaughter operations are developing steadily

In terms of feed, in the first three quarters of 2024, the company's feed production volume was 0.5982 million tons, an increase of 40.97% over the previous year. In July, Tianxin Seed Industry, a subsidiary of Xinwufeng, plans to invest 0.279 billion yuan to build the “Chenzhou Tianxin Biotechnology Co., Ltd. new pig feed plant construction project with an annual output of 0.6 million tons”. In terms of slaughter, in the first three quarters of 2024, the company's slaughter production volume was 0.0484 million tons, an increase of 4.15% over the previous year. At present, the company has completed the annual production capacity layout for slaughtering 2.05 million pigs. Including Guanglian Company, which was put into operation in 2015, has the capacity to slaughter and process 0.7 million pigs per year; the new Ning Yuanshun project has the capacity to slaughter 0.5 million pigs per year and has been put into operation in 2024; the production scale of the Chenzhou Shuangxin Project is capable of slaughtering 0.85 million pigs per year, and the project is expected to be put into operation in 2024.

Profit Forecasts, Valuations, and Ratings

We expect the company's 2024-2026 revenue to be 8.037/10.404/11.952 billion yuan, respectively, with year-on-year growth rates of 42.71%/29.45%/14.88%, respectively, and net profit to mother 0.146/0.608/0.513 billion yuan, respectively. The year-on-year growth rates will reverse to profit/ 315.50%/-15.65%, and EPS 0.12/0.48/0.41 yuan/share, respectively. The pig farming boom is picking up, and the company is expected to achieve performance growth. It is recommended to keep an eye on it.

Risk warning: Release falls short of expectations; pig prices fall short of expectations