WENS FOODSTUFF GROUP CO.(300498) 国信证券·2024-07-22 00:30Investment Rating - The investment rating for the company is "Outperform the Market" (maintained) [2][7]. Core Views - The company is expected to achieve a net profit attributable to shareholders of 1.25 to 1.5 billion yuan in the first half of 2024, recovering from a loss of 4.689 billion yuan in the same period last year [2][3]. - The second quarter of 2024 is projected to yield a net profit of 2.486 to 2.736 billion yuan, compared to a loss of 1.94 billion yuan in the previous year, indicating a significant turnaround [2][3]. - The company has a robust pig farming capacity with approximately 46 million heads of breeding stock and an effective fattening capacity of about 35 million heads, which is expected to support steady growth in output [2][4]. Summary by Sections Financial Performance - The company forecasts a net profit of 1.25 to 1.5 billion yuan for H1 2024, a significant improvement from a loss of 4.689 billion yuan in H1 2023 [2]. - For Q2 2024, the expected net profit is between 2.486 and 2.736 billion yuan, compared to a loss of 1.94 billion yuan in Q2 2023 [2][3]. - The average profit per fattened pig is estimated to be around 220 to 240 yuan, with the total cost of pig farming at approximately 14.5 yuan/kg [2][3]. Production and Cost Management - The company has improved its breeding performance, with the average number of piglets per litter increasing to 11.3 and the survival rate of piglets at about 93% [4]. - The cost of piglets has decreased to around 330 yuan per head, down by 60 yuan from December 2023, which is expected to positively impact future costs of market pigs [4]. - The company has maintained a steady decline in costs for both pig and chicken farming, benefiting from lower feed prices and improved production management [3][4]. Market Position and Growth Potential - In 2023, the company sold 1.183 billion chickens, a year-on-year increase of 9.51%, capturing 9.1% of the national market share for meat chickens [6]. - The company plans to increase chicken sales by 5% to 10% in 2024, indicating a stable growth trajectory [6]. - The company has developed nine approved breeds of yellow feathered chickens, enhancing its competitive edge in the poultry market [6].