Introduction to this report:

With the expansion of aquaculture production capacity, the market share of Probiotic 909 continues to increase. Looking at long-term development space, as chicken consumption preferences and consumption are boosted, long-term demand supports the expansion of the industry, which in turn supports the price of chicken seedlings.

Key points of investment:

Maintaining the “Overweight” rating, the target price was lowered to 11.59 yuan. The amount of chicken introduced in the industry is generally abundant, so the 2024 chicken seedling price forecast was lowered. Due to the expansion of the company's scale and the 2025 forecast was raised, the 2024-2025 EPS was adjusted to 0.42/0.61 yuan (previous value 1.41/0.51 yuan), and the 2026 EPS is expected to be 0.68 yuan. Based on the comparable company's valuation of 18.58X PE in 2025, the company was given 19X PE in 2025, and the target price was lowered to 11.59 yuan (previous value 15.49 yuan) to maintain the “gain” rating.

Incident: In October, the number of white feather broiler seedlings sold was 53.1402 million, with sales revenue of 258.4401 million yuan. The year-on-year changes were 2.06% and 48.82% respectively, and the month-on-month changes were 7.50% and 27.90%, respectively. The sales volume of Yisheng 909 small white feather broiler seedlings was 7.0339 million, and sales revenue was 10.1237 million yuan. The year-on-year changes were 135.55% and 152.79%, respectively, and the month-on-month changes were 25.04% and 20.36%, respectively.

With the expansion of aquaculture production capacity, sales of Probiotic 909 continued to grow. In 2024, it is estimated that the company's commercial chicken seedlings will sell about 0.6 billion chicken seedlings, and the parents will sell more than 12 million sets of chicken seedlings. Production capacity for commercial chicken seedlings is expected to increase year-on-year in 2025 as the company's newly built farms in Shanxi, Dongying, and Hebei are put into operation. At the same time, Yisheng 909 is crowding out the small white chicken and yellow feather fast chicken markets, and it is optimistic that its market share will continue to increase in the future.

Long-term demand supports the expansion of the meat and poultry industry, and the price of chicken seedlings is supported. The per capita consumption of chicken in our country is low. The share of chicken consumption has been rising in recent years, and there is plenty of room for market development. Changes in the consumption structure and the rise of a “fast food culture” have led to an increase in demand for chicken. It is expected that in 2025, with the continued release of favorable policies to stimulate consumption, the boost in food and beverage consumption will also drive up demand for chicken. Furthermore, the growth of the pet food industry will also drive an increase in chicken consumption. Judging from daily consumption and pet consumption, long-term demand supports the expansion of the meat and poultry industry, which in turn drives the increase in demand for chicken seedlings.

Risk warning: Agricultural product prices fluctuate greatly, the risk of aquaculture epidemics, etc.