SHUANGHUI(000895) 华创证券·2024-10-30 03:12Investment Rating - The report maintains a "Strong Buy" rating for Shuanghui Development with a target price of 28 CNY [1] Core Views - Shuanghui Development's Q3 2024 revenue was 164.1 billion CNY, a year-on-year increase of 4.75%, while net profit attributable to the parent company was 15.1 billion CNY, a year-on-year decrease of 1.2% [1] - The meat products business saw a revenue decline of 4.0% in Q3 2024, but the profit margin reached a historical high due to effective cost control and product structure adjustments [1] - The slaughtering business experienced a revenue decline of 53.6% in Q3 2024, with a profit margin of 1.0%, mainly due to weak demand and low prices for frozen products [1] - The company's dividend yield remains attractive at 5.6%, and the target price of 28 CNY implies an 18X PE ratio for 2025 [1] Business Performance Meat Products Business - Revenue from the meat products business in Q3 2024 was 68.3 billion CNY, a year-on-year decrease of 4.0% [1] - The profit margin for meat products reached 27.7% in Q3 2024, up 3.1 percentage points year-on-year, with a profit per ton of approximately 4,800 CNY [1] - The company has been actively adjusting its product mix and expanding into mid-range products and new sales channels, which has helped narrow the decline in sales volume [1] Slaughtering and Other Businesses - Revenue from the slaughtering business in Q3 2024 was 85.0 billion CNY, a year-on-year decrease of 53.6%, with a profit margin of 1.0% [1] - The company's slaughtering volume was lower in Q3 2024 due to weak demand and low prices for frozen products, leading to reduced profitability [1] - The company's pig and chicken farming businesses showed significant improvement in Q3 2024, with reduced losses compared to the previous quarter [1] Future Outlook - The company is expected to continue strengthening its leading position in the meat products market, with further adjustments in product structure and sales channels [1] - The slaughtering business is expected to improve in Q4 2024, with potential benefits from lower pig prices and increased fresh meat sales [1] - The company's farming operations are expected to achieve breakeven or profitability in the coming year, driven by cost optimization and improved operational efficiency [1] Financial Forecasts - The report forecasts EPS for 2024-2026 to be 1.47/1.58/1.67 CNY, slightly higher than previous estimates due to improved profitability in the farming business and adjustments in the meat products segment [1] - The company's revenue is expected to grow by 5.4% in 2025 and 4.9% in 2026, with net profit growth of 8.0% and 5.4% respectively [10] - The company's ROE is expected to remain strong, at 24.1% in 2024, 24.9% in 2025, and 25.2% in 2026 [10]