In 2021, pig prices continued to drop, and the "big three" of pig breeding could not escape the loss situation.
According to the newly disclosed performance forecast, Wens Foodstuff Group Co.Ltd(300498) , Jiangxi Zhengbang Technology Co.Ltd(002157) , Tech-Bank Food Co.Ltd(002124) suffered a total loss of 34.5-37.5 billion yuan last year. Based on the maximum loss range, the average daily loss of the "big three" exceeded 100 million yuan.
As a leader in the industry, Muyuan Foods Co.Ltd(002714) although it has not made a loss in advance, it is expected that the net profit will decline by more than 70% in 2021, and only a loss of 1.5-3 billion yuan is expected in the second half of 2021.
Does the loss and performance decline of leading enterprises mean that the reversal is coming? One phenomenon is that the "smart money" in the market has increased its position against the trend in the fourth quarter of last year.
the "big three" suffered a maximum loss of 37.5 billion yuan last year
On January 28, Jiangxi Zhengbang Technology Co.Ltd(002157) disclosed the performance forecast for 2021. The company expected a net profit loss of 18.2 billion yuan to 19.7 billion yuan, a decrease of 416.84% to 442.96% over the same period of the previous year.
According to the disclosure, during the reporting period, Jiangxi Zhengbang Technology Co.Ltd(002157) carried out strategic transformation, disposed of the inefficient sows purchased at high prices in the early stage, and further optimized the population. In total, about 2.2 million sows and backup sows were killed, with a loss of 6.2-6.8 billion yuan. In addition, the total losses of prepaid rent, return compensation and materials of the leased field are about 1.5 billion yuan, and about 1.2 billion yuan is withdrawn.
Previously, a number of peer companies have also issued pre loss announcements.
Wens Foodstuff Group Co.Ltd(300498) the notice said that the company's net profit attributable to the parent company is expected to lose 13 to 13.8 billion yuan. The year-on-year decline was as high as 275.06% to 285.84%. This is also the first loss of Wens Foodstuff Group Co.Ltd(300498) since its listing.
Tech-Bank Food Co.Ltd(002124) the loss is expected to be 3.5 to 4 billion yuan, a year-on-year decrease of more than 200%.
The above three enterprises have a total loss of about 34.5-37.5 billion yuan. Based on the maximum loss range, the average daily loss of the three enterprises exceeds 100 million yuan.
For the huge advance loss, the above companies attributed it to the sharp decline in pig prices. Among them, Tech-Bank Food Co.Ltd(002124) said that with the recovery of pig production capacity and surplus in China, pig prices showed a rapid downward trend in 2021. In 2021, the number of pigs sold by the company increased by 39% year-on-year, but the average sales price of commercial fat pigs decreased by 64% year-on-year.
In addition, according to the disclosure of Wens Foodstuff Group Co.Ltd(300498) , it sold 13.2174 million pigs (including hairy pigs and fresh products) in 2021, according to the loss and sales volume disclosed by the company, the loss apportioned to each pig was about 1000 yuan.
It also said that the continuous rise in the price of feed raw materials, the fattening of some pig seedlings purchased by the company and the continuous promotion of pig breeding optimization have pushed up the cost of raising pigs.
Although the "pig grass" Muyuan Foods Co.Ltd(002714) which has been considered as the lowest breeding cost and the most resistant to decline has not suffered a loss in advance, it is expected that the net profit will decline by more than 70% in 2021, about 7 billion yuan to 8.5 billion yuan. According to the previous financial report, it is expected to lose 1.5-3 billion yuan in the second half of 2021.
Muyuan Foods Co.Ltd(002714) also said that the risk of changes in pig market price is the systematic risk of the whole pig production industry, which is an objective and uncontrollable external risk for any pig producer.
In addition, animal disease is the main risk faced by the development of animal husbandry industry, especially the outbreak of African swine fever since August 2018, which may have a significant impact on the company's operating performance.
is the industry recovering soon?
Does the loss and performance decline of leading enterprises mean that the reversal is coming? Has the price of pork fallen to the bottom?
one phenomenon is that the "smart money" in the market has increased its position against the trend in the fourth quarter of last year.
As of the fourth quarter of 2021, the total number of funds with heavy positions was 498.8}, an increase of 2948.8% over the previous quarter of 2021, showing that the total number of funds with heavy positions was 3001.2} in the fourth quarter of 2021.
In terms of share price, since the fourth quarter of last year, Wens Foodstuff Group Co.Ltd(300498) has been in an upward trend, and the share price increased by more than 30% in the fourth quarter of last year.
As another example, Muyuan Foods Co.Ltd(002714) , as of December 31, 2021, a total of 138 funds held Muyuan Foods Co.Ltd(002714) among the top ten heavy positions, with a total of 153 million shares, an increase of 4.86% over the previous quarter. The company's share price rose slightly by 2.81% in the fourth quarter of last year.
In terms of pig prices, after the rebound in the fourth quarter of last year, the pig spot market reversed the normal of "rising every festival" in January this year, and its price fell from 16.45 yuan / kg at the beginning of the month to 13.99 yuan / kg on January 28, a decrease of nearly 15%.
On the futures market, since January, 2203, the main pig contract, has fallen by 7.1% and closed at 13425 yuan.
Wens Foodstuff Group Co.Ltd(300498) said in a recent exchange with institutional investors that according to the experience of previous years, pork consumption is generally off-season after the Spring Festival, which does not rule out the possibility of continuous decline in pig prices. It is optimistically estimated that the pig price may enter the upward channel of the next cycle after the second half of 2022; It is pessimistic to estimate that 2022 is still in the position of social average profit and loss balance line, and the next cycle may not start until 2023.
According to The Pacific Securities Co.Ltd(601099) securities, the current performance forecast is in an intensive release period, and a number of Listed Companies in the aquaculture sector have issued announcements of significant performance reduction or loss advance. The performance changes of breeding listed companies are basically in line with expectations. The current focus should also focus on the judgment of the speed of capacity removal and the reversal time point of the new cycle.
