: 中国家禽行业：: 鸡肉价格承压

Issuer of report:HSBC Qianhai Securities LimitedView HSBCQianhai Securitiesat:https://www.research.hsbc.comListen to our insightsFind out moreHSBC Global Research PodcastsYihui Sha* (Reg. No. S1700519100001)Head of A-share Agriculture ResearchHSBC Qianhai Securities Limitedyihui.sha@hsbcqh.com.cn+86 21 5066 2004* Employed by a non-US affiliate of HSBC Securities (USA) Inc, and isnot registered/ qualified pursuant to FINRA regulationsEquitiesAgricultural ProductsChina_2025e net profit (RMBm)____2026e net profit (RMBm)_NewOldNew8861,1051,048579839 ◆◆◆17%10% Old1,3196291,001 2Valuation and risksSunnerDevelopment002299 CHPrice:RMB15.79Target price:RMB18.50Upside17%BuyWellhope603609 CHPrice:RMB8.92Target price:RMB9.80Upside10%BuyNote: Prices at theclose of21May 2025.*Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is not registered/ qualified pursuant to FINRA regulationsSource:Bloomberg, HSBC Qianhai Securities estimatesValuations of comparable companies in China’s poultry industryCompanyTickerCurrency RatingSunner Development*002299 CHWellhope603609 CHYisheng002458 CHAverageNote: Priced as at21May 2025.*Stocks covered by HSBC Qianhai Securities, HSBC Qianhai Securities estimates used.Source: Wind, Bloomberg, HSBC Qianhai Securities estimates (*rated stocks) Industry updateAlthough GP chick imports from the UShaltedin4M25(source: CAAA),due tohighlypathogenic avian fluoutbreakin the US, the GP stocks and sales volume of PS chicks remainat high levels(Exhibits1-3), suggesting ample chicken meat supply in 2025. We maintain ourview that the supply pressurewillpersist and chicken price may fall y-o-y in 2025.QTD,the raw material prices increase q-o-q:◆Soybean mealprices:Theaverage priceisclose tothe1Qlevel,althoughthe price isvolatiledue to Sino-US trade tensions◆Corn prices:Prices are trending upwardandtheaverage priceisabovethe1Q25levelbutbelowthe2Q24levelConsideringthattheincreasing supply weighson chicken prices y-o-y, while cost improvementmay continue butat a slower pacein 2Q25(Exhibits5-7), we expect 2Q profitability per tonnetobeflat y-o-y(Exhibits5-7).Exhibit1.GP stocks(msets, weekly) athighalevelSource:China Animal Agriculture Association(CAAA), HSBC Qianhai SecuritiesExhibit3.Sales volume of PS chicks(msets, weekly)Source:CAAA, HSBC Qianhai SecuritiesNote: PS: parent generation0.91.01.11.21.31.41.51.61357911 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 532025202420230.30.50.70.91.11.31.51.71.92.11357911 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 532025202420232022 Exhibit2.GP chick update(incl.imports, ksets, monthly)Source: CAAA, HSBC Qianhai SecuritiesExhibit4.ASP of PS chicks(RMB/set,weekly)Source:CAAA, HSBC Qianhai Securities202220212020-50100150200250123456789101112x 0.1202320242025202120203.013.023.033.043.053.063.073.083.01357911 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53202520242023202220212020 3 Source:Wind,HSBC Qianhai SecuritiesSunnerDevelopment(002299 CH,Buy,cutTPtoRMB18.50fromSunnerreported its 2024 net profit of RMB724m (up 9% y-o-y) and 1Q25 net profit ofRMB147.6m(vs.a net loss ofRMB61.9m in 1Q24), largely in line with our expectation.Based onthecompany’s 2024 results and 4M25 monthly data, we lower our 2025-26 salesvolumesestimatesfor food business by 13%for each yearand lower food business gross profitestimatesby 15-19%. On the other side, welower our2025-26chicken meat ASP estimates by3-4%andchicken meat costestimates by 4-5%, to factor in ample chicken meat supply, goodcost management and increasing raw material pricesin 2Q25.As a result,we lower 2025-26net profit estimatesby 19.8% and20.5% to RMB886m and RMB1,048m, respectively. We alsointroduceour2027 net profit estimate of RMB1,239m. RMB19.40) Sensitivity analysisWe conduct a 2025e earnings sensitivity analysis and find that:◆Every 5ppt change in revenue growth would result in a4% change in 2025e net profit in thesame direction.◆Every 2ppt change in gross margin would result in a40% change in 2025e net profit in thesame direction.Exhibit10.Sensitivity analysis of 2025e net profit to changes in revenue growth and grossmargin (RMBm)_______________________________________Revenuegrowth__________________________________Gross margin7%9%11%13%1,13915%1,461Source: HSBCQianhai Securities estimatesExhibit11.Sensitivity analysis of 2025e net profit to changes in revenue growth and grossmargin (%)____________________________________Revenue growth_____________________________________Gross margin7%9%11%13%15%Source: HSBC Qianhai Securities estimatesWhere wediffer from consensusOur 2025-27 earnings estimates are21.8-28.5% lower than consensus,as we aremoreconservative on chickenpricesas capacity remainsat a high level.Exhibit12.HSBC Qianhai Securities estimates versus consensus__HSBC Qianhai estimates___(RMBm)2025eRevenue19,902Net profit886Source: Wind, HSBC Qianhai Securities estimates -3%2%7%1731751764955135318178528861,1901,2411,5281,596-3%2%7%-80%-80%-80%-44%-42%-40%