ZHENGBANG TECHNOLOGY(002157) 华鑫证券·2024-11-27 00:24Investment Rating - The report upgrades the investment rating to "Buy" for Zhengbang Technology [2] Core Views - Zhengbang Technology is expected to recover rapidly post-restructuring, with a focus on internalizing the twin feed and pig farming systems, aiming for industry-leading cost control and production efficiency [20][25] - The company has shown signs of operational recovery, achieving profitability in Q3 2024, with a significant reduction in debt ratio to 47.05%, indicating a return to a healthy financial state [28][30] - The collaboration with Twin Group is anticipated to enhance Zhengbang's operational capabilities, leading to a potential merger and listing within four years [20][25] Summary by Sections 1. Restructuring and Recovery - Zhengbang Technology has resumed operations and is recovering its idle capacity, focusing on new feed and fattening systems [20] - The company achieved a net profit of 428 million yuan in Q3 2024, with a debt ratio decrease from 162.61% to 47.05% [28][30] - The pig farming business has turned profitable, with a steady recovery in breeding stock and fattening capacity [35][39] 2. Operational Performance - The pig farming business has seen a significant turnaround, with Q3 2024 revenue reaching 3.09 billion yuan, and monthly sales increasing steadily [35][36] - The company has established three joint ventures with Twin Group to enhance operational efficiency and resource allocation [45] - The feed business is recovering, with total sales exceeding 900,000 tons in the first three quarters of 2024, marking a 40.6% increase from the previous year [47][52] 3. Management and System Advantages - Twin Group's management expertise is being leveraged to enhance Zhengbang's operational framework, creating a comprehensive service platform [56] - The company is adopting a "company + farmer" model for pig farming, which is expected to optimize costs and improve production efficiency [39][41] - The integration of Twin Group's resources and technology is anticipated to support Zhengbang's growth and operational improvements [44][45] 4. Profit Forecast - Revenue projections for Zhengbang Technology are estimated at 84.06 billion yuan, 133.38 billion yuan, and 175.25 billion yuan for 2024, 2025, and 2026 respectively [9] - The expected earnings per share (EPS) for the same period are projected to be 0.06 yuan, 0.11 yuan, and 0.07 yuan [9] - The report anticipates a significant recovery in profitability, with a return to normal levels in the feed business and steady growth in veterinary medicine [9]