Interface News reporter | Niu Qichang
Although domestic pig consumption is in the traditional off-season, after experiencing the trough of the pig cycle, a number of listed pig enterprises reported good news in April: the average sales price of commercial pigs rose month-on-month, and the industry as a whole warmed up.
May 6 and 7, including Muyuan shares (002714WheeloffortunewheelEight listed pig farming companies, including .SZ), New Hope (000876.SZ), Wen's shares (300498.SZ), ST Tianbang (002124.SZ), Zhenghong Technology (000702.SZ), Dabei Nong (002385.SZ), Shennong Group (605296.SH) and Dongrui shares (001201.SZ), successively disclosed pig sales reports in April.
According to the statistics of the interface news, in terms of the average sales price of commodity pigs, all eight listed companies are rising month-on-month.WheeloffortunewheelIn terms of pig sales income, with the exception of Wen's shares and Dong Rui shares, the other six listed companies achieved month-on-month growth in pig sales income, while in terms of pig sales, eight listed companies were divided. Among them, 4 sales increased and 4 sales decreased.
However, this round of price increases are not driven by the demand side. Under the background that the whole pig breeding industry is still in the doldrums, "cost control" has become the focus of relevant listed companies.
Prices have risen for four months in a row
Specifically, from the perspective of Muyuan shares, Wen's shares and New Hope three head companies:
Interface News noted that since the bottom in December last year, the pig sales prices of relevant listed companies have risen for four months in a row. Although the national consumption of live pigs has entered the traditional off-season, the average price of live pigs has risen instead of falling, and the current price level is roughly the same as that of live pigs in October last year.
In the case of Wen's shares, the price of woolly pigs bottomed out to 13.70 yuan / kg in December 2023 and has risen month by month since then, up more than 10% so far. In addition, in the past four months, the prices of Muyuan shares and New Hope commodity pigs have risen by 10.28% and 15.85%, respectively.
In addition to the above three head pig enterprises, ST Tianbang, Dabei Nong, Shennong Group, Dong Rui shares four listed companies disclosed commodity pig sales average prices have increased in varying degrees compared with the previous month (Zhenghong Technology has not disclosed), rising to 15.17,14.83,14.58 yuan / kg, 16.78 yuan / kg respectively.
Against this background, ST Tianbang achieved monthly sales income of 656 million yuan, an increase of 8.48% over the previous month, Dabei Nong's monthly sales income of 855 million yuan, an increase of 12.50% over the previous month, Shennong Group's monthly sales income of 301 million yuan, an increase of 5.99% over the previous month, and Dongrui shares achieved monthly sales income of 102 million yuan, down 3.10% from the previous month. Zhenghong Technology achieved a monthly sales revenue of 7.5069 million yuan, with a month-on-month increase of 7.50%.
At the news conference held by the State News Office on April 19, Lei Liugong, director of the Department of Market and Informatization of the Ministry of Agriculture and Village, said that after previous discussions, with the gradual appearance of the effect of pig production, the stock of breeding sows, medium and large pigs and the number of newborn piglets all showed a downward trend, and it is expected that the relationship between supply and demand in the pig market will further improve in the second quarter. Pig farming may turn losses into profits.
Fan Qingqing, a pig market analyst at Zhuochuang Information, told the Interface News that pig prices have risen for four consecutive months this year, on the one hand, because January and February are in the Spring Festival stock period, and prices are gradually strengthening under the support of improved demand. On the other hand, in March and April, as farmers were bullish on the future, the demand for secondary fattening of pigs led to a rise in pig prices.
"but on the demand side, through our tracking of the market, there is actually no obvious boost. At present, the price rise is mainly due to the upstream relatively optimistic about the future, has been in a stable price shipment. " Fan Qingqing analyzed the interface news.
Still stuck in the quagmire of losses in the first quarter
Although commodity pig prices have continued to rise since the beginning of this year, taking into account the changes in breeding costs and the enterprise's own business strategy, even with the current price of nearly 15 yuan / kg, it is still near the cost line of major pig farming enterprises. the performance end is still under great pressure.
"at present, the cost line of major aquaculture enterprises is about 14.5 yuan / kg to 15.5 yuan / kg, but there are differences in cost control among enterprises, and micro-profits and micro-losses co-exist." Fan Qingqing told the interface news.
In this context, a number of listed pig companies are still at a loss in the first quarter of this year. Among them, Muyuan shares, Wen's shares, New Hope three head listed pig enterprises in the first quarter losses are more than 1 billion yuan.
Take Muyuan shares as an example, in the first quarter of 2024, the company achieved an operating income of 26.272 billion yuan and a net profit loss of 2.379 billion yuan, which was further expanded compared with the same period in 2023.
In this regard, Muyuan shares said at the quarterly performance exchange meeting that due to the influence of winter epidemic and Spring Festival sales, the complete cost of pig breeding rose to 15.8 yuan / kg from January to February in 2024, and the March cost has dropped to 15.1 yuan / kg. In the future, with the improvement of the health level of pigs, the production indicators will also be gradually improved, and the breeding cost is expected to further reduce.
By contrast, Wen's net profit in the first quarter of this year was-1.236 billion yuan, compared with-2.749 billion yuan in the same period last year, reducing losses compared with the same period last year. The new hope is that the net profit in the first quarter of this year is-1.934 billion yuan, compared with-1.686 billion yuan in the same period last year.
Fan Qingqing said that from the demand side, through the tracking of the operating rate of slaughtering enterprises, the first quarter is still at a low level compared with the same period last year, coupled with rising temperatures, the pig consumption market is not expected to show signs of improvement. On the supply side, the output of sample companies is expected to increase by 7.7% in May, which will also put some pressure on pig market prices.
Although it is still difficult to get out of the quagmire of losses in the first quarter, a number of listed companies are optimistic about the market later this year, and pig prices for the whole year are expected to be better than last year.
Recently, Gao Ying, chief financial officer of Muyuan shares, said publicly that "the amount of losses disclosed in the annual report and the quarterly report is also large at the level of listed companies." But in fact, we have been through the most difficult period of time, the industry has been through the most difficult period of time. "
"cost control" becomes the focus of attention.
In the current situation of the overall downturn in the industry, "cost control" has become the focus of pig breeding listed companies.
Muyuan shares mentioned at the performance exchange meeting that the company hopes that the complete cost of breeding can be reduced to less than 14 yuan / kg in the third or fourth quarter of this year, with an annual average cost target of 14.5 yuan / kg. In the reduction plan, the decline in feed prices is expected to contribute about 0.3 yuan / kg, and the improvement in production management such as epidemic prevention and control is expected to have room for cost reduction of about 0.3 yuan / kg.
Wen's shares said in a conference call on the interpretation of the quarterly results that thanks to the remarkable effect of epidemic prevention and control, the superimposed decline in the price of feed raw materials and other factors, the company's pig-raising cost control was satisfactory in the first quarter. In March, the company basically broke even with a single pig, and 9 of the company's 16 pig-raising regional units have made a profit. "for a period of time in the future, the pig industry may be in a state of weak balance and low profit, and the company will pay more attention to cost control to ensure profitability as the primary consideration."
Dabei Nong also said in an investor relations activity recently that the loss of pig farming business in the first quarter was more than 50% lower than that of the same period last year, and the cost decreased significantly. The overall complete cost of pig breeding and fattening in the first quarter was about 15.1 yuan / kg, and the cost still has a downward trend in the near future.
"affected by uncertain factors such as great differences in performance among the company's breeding platforms and pig diseases, the company's goal of complete pig fattening cost is to reach a level of less than 14.5 yuan / kg by the end of this year. Pig farming business steady and optimized development, not for scale, but for efficiency, the core is to practice internal skills, reduce costs and increase efficiency. " Dabei Nong said.
New Hope said on the Interactive easy platform that the cost of the company's normal operating field line has dropped from 17.4 yuan / kg in the first quarter of 23 to 15.8 yuan / kg in the fourth quarter. It is expected that the cost of fattening pigs in the operation line will be reduced to 14.2-14.3 yuan / kg in December this year.
Chen Xingyi, vice president of New Hope, said at the analyst meeting that after the second quarter, the improvement in the entire production and operation will be fully reflected. At present, the company as a whole has turned to break even in April, which is a very good sign, especially the conversion cost of the company's reserve sows, and there is still room for a rapid decline in the future.