The company publishes its 2023 semi-annual report. In the first half of 2023, the company achieved operating income of 555.83 million yuan, an increase of 20.54 percent over the same period last year, and the attributable net profit was-330.11 million yuan, down 458.62 percent from the same period last year. EPSmuri 1.55 yuan, and the weighted average ROE was-11.23 percent, down 9.3 percent from the same period last year. Among them, the company's Q2 realized operating income of 230.5 million yuan in 2023, down 0.9% from the same period last year, and the attributable net profit was-139.24 million yuan, which was lower than that of the same period last year (2022Q2 vested net profit-26.86 million yuan).
The reasons for the loss of the company's performance in the first half of 2023 are mainly due to: (1) the continued downturn in pig prices in the first half of the year; (2) the existence of diseases such as blue ears and pseudo-rabies in the company's individual farm, and take the initiative to eliminate backward production capacity to supplement and replace the optimized pig breeding system. (3) the company's new farm bears large expenses such as fixed depreciation and amortization; and (4) provision for inventory decline in expendable biological assets.
The company sold 366400 live pigs in the first half of 2023, an increase of 50.89 percent over the same period last year; sales revenue reached 528 million yuan, an increase of 23.01 percent over the same period last year; and the average sales price of commercial pigs was 16.60 yuan / kg, down 12.59 percent from the same period last year. In terms of project reserves, the company has now reserved and completed 2 million production capacity breeding bases in Heyuan City, while extending to Huizhou City, the surrounding area of Heyuan City, with an annual reserve of 200000 aquaculture projects. By the end of June, the company's asset-liability ratio was 46.97%, and its capital structure was relatively robust compared with its peers.
Investment suggestion
In view of the continued low volatility of pig prices in 2023, we expect the company's 2023-2025 net profit to return to the mother of-3.36max 103pm 702 million, corresponding to EPS of-1.58xt 0.49max 3.30, and the current share price is 1.8 times of 2023 PB, maintaining the "overweight-B" rating.
Risk tips: livestock and poultry epidemic risk, natural disaster risk, raw material price rise risk, poor transportation risk.