Oriental Securities: Shuanghui Development's revenue and profit are expected to improve, maintaining a "buy" rating.

The research report from Orient Securities pointed out that Shuanghui Development's performance in Q1 2025 is under short-term pressure, but its performance in Q2 is expected to improve marginally. The net profit attributable to shareholders in Q1 2025 was 11.4 billion yuan, a decrease of 10.6% year-on-year, slightly lower than market expectations. The revenue from meat products in Q1 2025 was 55.8 billion yuan, a decrease of 17.8% year-on-year, mainly due to insufficient consumer demand for meat products in Q1 2025, inability of new channels to make up for the decline in traditional channels, and destocking by customers and consumers in Q1. It is expected that the sales of meat products will improve in Q2 2025 with the advancement of market specialization reform and channel restocking. Looking at the whole year of 2025, the ton profit of the company's meat products in 2024 reached a historical high, and the company will increase market investment this year and launch high-performance cost-effective products to participate in market competition. Therefore, it is expected that the ton profit of meat products in 2025 will be lower than that of 2024, but it will still be at a historically high level. It is expected that the performance in Q1 2025 may be the lowest point of the year, and revenue and profit are expected to improve in the following quarters against the backdrop of healthy channel inventory and gradual manifestation of the company's market specialization reform costs. Giving the company a PE ratio of 24 times for 2025, the corresponding target price is 32.88 yuan per share, maintaining a "buy" rating.