Wens Foodstuffs (300498 CH) Equity Research Report
Summary:
Wens Foodstuffs (Wens) reported strong growth in meat pig and broiler production in July, with the selling price of meat pigs exceeding the industry average. The company’s per-head profit for meat pigs approached RMB600, driven by higher selling prices and a potential contraction in hog supply in the second half of 2024.
Key Data:
- July Meat Pig Selling Price: RMB18.95/kg, above the industry average.
- Per-Head Profit for Meat Pigs: Nearly RMB600.
- Estimated Total Hog Breeding Cost: Expected to decline steadily.
- Attributed to: Falling hog supply in southern sales areas and stronger pig prices in southern China.
- 2024/2025/2026 Attributable Net Profit: RMB10.0/13.4/13.1 billion.
- Book Value per Share (BVPS): RMB6.48/8.29/10.16.
- Target Price: RMB25.53.
- Upside Potential: +29%.
Demand Outlook:
- Hog and Broiler Demand: Expected to remain strong due to tight supply-demand dynamics.
- Broiler Prices: Likely to increase as the peak chicken consumption season approaches in the second half of 2024.
Financial Highlights:
- Earnings Per Share (EPS): RMB1.51/2.01/1.98 (2024E/2025E/2026E).
- Return on Equity (ROE): 17.56%/26.36%/27.21%.
- Price-to-Earnings Ratio (PE): 21.02/13.38/10.22.
- Price-to-Book Ratio (PB): 3.38/3.12/2.44.
- Enterprise Value to EBITDA Ratio (EV/EBITDA): 6.81/9.87/7.24.
Risks:
- Lower Live Hog Output: Potential impact on supply.
- Weak Hog Prices: Below expectations.
- African Swine Fever: Resurgence.
- Animal Diseases: Outbreaks.
- Capacity Expansion Mismatch: Market demand.
Analyst Certifications and General Disclaimers:
The report reflects the personal views of the analysts and does not guarantee the accuracy or completeness of the information provided. Past performance is not indicative of future results, and there is a risk of loss of capital. Huatai and its affiliates are not liable for any losses or damages arising from the use of this report. Investors should consider their own circumstances and use this report as a reference only.
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