SHUNXIN AGRICULTURE(000860) 华福证券·2024-02-26 16:00Investment Rating - The report assigns a "Buy" rating to the company, indicating an expected price increase of over 20% relative to the market benchmark index within the next six months [7]. Core Viewpoints - The company is focusing on its core businesses of liquor and meat, with strong revenue growth in the liquor segment. The liquor business is expected to benefit from product upgrades and a shift in consumer preferences towards higher-quality offerings [19][54]. - The company has successfully transitioned from a diversified business model to a concentrated focus on liquor and meat, with liquor accounting for 68.77% of revenue in 2022 [48][54]. - The report highlights the company's strategic decision to divest its real estate business, which has been a drag on overall performance, allowing for improved profitability and stability in its core operations [54][66]. Summary by Sections Company Overview - The company, established in 1998, is the first agricultural listed company in Beijing, with a diverse business portfolio including liquor production, pig farming, and real estate development. The main liquor brand, "Niulanshan," has become a significant player in the market [42][48]. Liquor Business Growth - The liquor segment has shown robust growth, with a focus on the "民酒" (people's liquor) strategy, which emphasizes quality and brand recognition. The introduction of the "金标" (Gold Label) product aims to capture the upgrading consumer demand [55][61]. - The report forecasts revenue growth rates for the liquor business of -7% in 2023, 6% in 2024, and 11% in 2025, with gross margins expected to improve as product upgrades take effect [61][66]. Market Dynamics - The report notes a shift in consumer preferences towards higher-priced liquor, driven by overall consumption upgrades and the introduction of new product standards. The low-end liquor market is shrinking, while the demand for mid-range and premium products is increasing [65][115]. - The company is well-positioned to leverage its established distribution channels and brand loyalty to enhance product penetration and sales volume [41][61]. Financial Projections - The projected net profits for the company are -310 million yuan in 2023, followed by significant recoveries to 525 million yuan in 2024 and 952 million yuan in 2025, reflecting a strong turnaround in profitability [66][67]. - The report assigns a target price of 24.8 yuan per share based on a 35x price-to-earnings ratio, indicating a favorable valuation compared to peers [66][67].