Analysis of the Reasons for the Divergence Between Revenue and Sales Volume Growth Rates of Xiantan Co., Ltd.

Based on collected data and in-depth analysis, I will provide a complete analysis of the reasons for the divergence between the revenue growth rate and sales volume growth rate of Xiantan Co., Ltd.'s chicken products.

In-Depth Analysis Report on Xiantan Co., Ltd. (002746)

I. Analysis of the Reasons for Revenue Growth Rate Consistently Outpacing Sales Volume Growth Rate

Core Data Performance:

According to the latest announcement, in December 2025, Xiantan Co., Ltd.'s chicken product sales revenue reached RMB 529 million, a year-on-year increase of 9.41%, while sales volume stood at 55,100 tons, a year-on-year increase of 6.76%. The revenue growth rate outpaced the sales volume growth rate by approximately

2.65 percentage points

[1][2]. This phenomenon is not accidental, but rather the result of the combined effect of multiple factors.

Product Structure Optimization: Increased Proportion of High-Margin Conditioned Products

The most core reason lies in the significant optimization of the company’s product structure. This can be seen from the first half of 2025 data:

Product Category	Revenue Growth Rate	Gross Margin	Change in Gross Margin
Chicken Products	5.69%	7.80%	+7.23pct
Conditioned Products (Pre-made Dishes)	16.44%	0.68%	-8.75pct

Notably, the performance of the

food processing sector (conditioned products/pre-made dishes)

is even more impressive: in December 2025, sales revenue from conditioned products reached RMB 57.6588 million, a substantial year-on-year increase of

71.83%

, while sales volume stood at 3,800 tons, a year-on-year increase of

63.04%

[1][2]. The rapid growth of the conditioned products business indicates that the company is actively extending downstream in the industrial chain to enhance product added value.

Rising Average Price of Chicken Products

The second important factor for the revenue growth rate outpacing the sales volume growth rate is the

increase in the average price of chicken products

. Although the overall market price of white-feather broilers was weak in 2025 (according to industry data, the average transaction price of live broilers in 2024 decreased by 13% year-on-year), Xiantan Co., Ltd. has achieved relatively stable prices through the following measures:

Brand Premium Capability
: The company’s products have obtained multiple international certifications including ISO9001, HACCP, FSSC22000, and BRCGS[3]
Customer Structure Optimization
: Direct sales revenue increased by 5.27% year-on-year, while distribution sales revenue increased by 9.65% year-on-year[4]
Channel Expansion
: The number of distributors increased from 1,288 in the first half of 2024 to 1,359 in the first half of 2025, representing a 5.51% increase[4]

Cost-Side Improvements Support Gross Margin Growth

In the first half of 2025, the main business cost of the company’s chicken products decreased by 1.99% year-on-year, while revenue increased by 5.69%. This “cost reduction and efficiency improvement” situation directly drove a significant improvement in gross margin[4]. This is mainly due to:

Decline in feed raw material prices (domestic feed raw material prices fell significantly in 2024)
Gradual release of production capacity from the Zhucheng project, bringing scale effects into play
Refined operation and management under the “steady and gradual progress” strategy

II. Analysis of the Impact on Profitability in 2025

Upward Revision of Profit Forecasts, Enhanced Certainty of Performance Growth

According to institutional forecasts, Xiantan Co., Ltd.'s net profit in 2025 is expected to reach

RMB 281 million

, a year-on-year increase of

37.5%

; earnings per share (EPS) is expected to be

RMB 0.33

[5]. Looking at the data for the first three quarters, the company has already achieved a net profit attributable to shareholders of

RMB 193 million

, a year-on-year increase of

72.48%

, which is significantly higher than market expectations[6].

Financial Indicator	2024 Actual	2025E	Year-on-Year Change
Operating Revenue (RMB 100 million)	52.91	58-60	+10-13%
Net Profit (RMB 100 million)	2.06	2.81	+37.5%
Gross Margin	~6%	~7.5%	+1.5pct

Sustainability of Gross Margin Improvement

The improvement of gross margin is the key to profitability enhancement. From a trend perspective, the gross margin of the company’s chicken products has continued to recover from the low level in 2024, reaching 7.80% in the first half of 2025, an increase of

7.23 percentage points

compared to the same period last year[4]. This improvement is mainly based on:

Cost Side
: The downward trend of feed costs is expected to continue
Revenue Side
: Product structure optimization drives the increase in average price
Scale Effects
: The release of production capacity from the Zhucheng project dilutes fixed costs

In 2024, the Zhucheng project achieved a commercial broiler slaughter volume of

54.7281 million birds

. After full completion and commissioning, the company will achieve a broiler slaughter volume of

250-270 million birds

and a meat processing capacity of

700,000 tons

[3].

Expense Control and Cash Flow Improvement

The company’s financial situation remains stable:

Current Ratio:
1.83
, indicating good short-term solvency
Quick Ratio:
1.54
, indicating strong liquidity
ROE:
6.24%
, indicating stable asset utilization efficiency[7]

More importantly, the company attaches great importance to shareholder returns. In 2024, the cumulative cash dividend reached

RMB 215 million

, accounting for

104.36%

of the net profit attributable to shareholders[3], reflecting a good dividend tradition and strong cash flow management capabilities.

III. Analysis of the Impact on Valuation

Current Valuation Level

Valuation Indicator	Value	Industry Comparison
PE (TTM)	18.33x	Below industry average
PB	1.16x	At historical low
EV/OCF	6.10x	Relatively reasonable

The company’s current PE and PB ratios are both at historical lows. According to industry research reports, the valuation of the white-feather broiler sector has fallen below the

15th percentile

of the historical PB values since listing, highlighting a significant margin of safety[8].

Catalysts for Valuation Enhancement

Positive Factors:

Certainty of Performance Growth
: The expected 37.5% net profit growth is at a relatively high level in the industry
Product Structure Upgrade
: The rapid growth of the pre-made dishes business is expected to raise the company’s valuation center
Heavy Holdings by Social Security Fund
: At the end of the third quarter, 2 pension fund portfolios appeared in the company’s top 10 tradable shareholders, and Social Security Fund Portfolio 413 also held a heavy position in the stock[6]
Sector Valuation Recovery
: Since the end of September, affected by domestic macro stimulus policies, the white-feather broiler sector has risen in resonance with the broader market[8]

Potential Risks:

Risk of chicken price fluctuations
Changes in raw material costs
Intensified competition due to industry capacity expansion

Investment Rating and Target Price

From the perspective of institutional attitudes, the company has attracted attention from multiple funds and securities firms. Institutions such as Western Lead Fund, Defu Capital, Zhongtai Securities, and Huafu Securities conducted on-site research on the company in May 2025, and gave positive evaluations of the company’s “steady and gradual progress” development strategy and full industrial chain layout[3].

IV. Conclusions and Investment Recommendations

Core Conclusions:

The fundamental reason for the revenue growth rate outpacing the sales volume growth rate
is product structure optimization (increased proportion of high-margin conditioned products) and rising average prices, rather than simple chicken price increases. This reflects the effectiveness of the company’s strategic transformation.
The 2025 profitability outlook is optimistic
, with net profit expected to grow by 37.5% and gross margin expected to further rise to over 7.5%. The release of production capacity from the Zhucheng project and the rapid growth of the pre-made dishes business are the main drivers.
There is room for valuation recovery
, with the current PE ratio of 18.33x and PB ratio of 1.16x at historical lows. Supported by the dual pillars of performance growth certainty and product structure upgrade, the valuation center is expected to move upward.

Risk Warnings: