| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 23.53 | 144 |
| Intrinsic value (DCF) | 5.31 | -45 |
| Graham-Dodd Method | 2.93 | -70 |
| Graham Formula | 2.49 | -74 |
Shandong Yisheng Livestock & Poultry Breeding Co., Ltd. is a leading integrated agricultural enterprise specializing in livestock and poultry operations across China and international markets. Founded in 1989 and headquartered in Yantai, China, the company has established a comprehensive business model spanning breeding operations for chickens, pigs, and cows, along with commodity chicken production and environmental control equipment offerings. Operating within the Consumer Defensive sector's Agricultural Farm Products industry, Yisheng plays a crucial role in China's food security ecosystem by providing essential protein sources to the world's largest consumer market. The company's vertically integrated approach allows for quality control throughout the production chain, from breeding to final product delivery. With over three decades of industry experience, Yisheng has built significant expertise in large-scale livestock management and biosecurity protocols, positioning itself as a reliable supplier in China's massive agricultural sector. The company's dual focus on both livestock breeding and equipment manufacturing creates synergistic advantages in operational efficiency and cost management.
Shandong Yisheng presents a mixed investment profile with several positive fundamentals offset by sector-specific risks. The company demonstrates solid profitability with net income of CNY 504 million on revenue of CNY 3.14 billion, translating to a healthy net margin of approximately 16%. Strong operating cash flow of CNY 753 million supports the business, though significant capital expenditures of CNY 594 million indicate ongoing investment in production capacity. The company maintains a reasonable debt level with total debt of CNY 2.02 billion against cash reserves of CNY 1.63 billion, while the dividend payment of CNY 0.25 per share provides income appeal. However, the agricultural sector's inherent volatility, exposure to commodity price fluctuations, disease risks in livestock operations, and China's regulatory environment present ongoing challenges. The beta of 1.057 suggests moderate market sensitivity, potentially offering some defensive characteristics within the cyclical agricultural space.
Shandong Yisheng's competitive positioning reflects its integrated business model within China's fragmented agricultural sector. The company's primary competitive advantage stems from its vertical integration across breeding, production, and equipment manufacturing, which provides cost control and quality assurance benefits. With operations dating to 1989, Yisheng has accumulated substantial expertise in large-scale livestock management, particularly in biosecurity protocols that are critical in disease-prone environments. The company's geographical presence in Shandong province, a major agricultural region, offers logistical advantages for serving key markets. However, Yisheng operates in a highly competitive landscape dominated by larger players with greater scale advantages. The company's moderate market capitalization of approximately CNY 9.7 billion positions it as a mid-tier player relative to industry giants. Its diversification across multiple livestock categories (chickens, pigs, cows) provides some risk mitigation against species-specific market cycles, but may limit focus compared to specialized competitors. The environmental control equipment segment offers differentiation but represents a relatively small portion of overall operations. Yisheng's international presence provides growth optionality beyond China's competitive domestic market, though execution risks remain. The company's financial stability and consistent profitability suggest operational competence, but scale limitations may challenge its ability to compete on cost with industry leaders in an increasingly consolidated sector.