After a short few trading days, pork concept stocks began to callback on February 11. As of the closing of the day, the pork sector closed at 3300.4 points, down 2.86%, of which Shandong Delisi Food Co.Ltd(002330) , Beijing Dabeinong Technology Group Co.Ltd(002385) fell by more than 7%, and more than 20 pork concept stocks such as Hunan Xiangjia Animal Husbandry Company Limited(002982) , Jiangxi Zhengbang Technology Co.Ltd(002157) , Tangrenshen Group Co.Ltd(002567) followed suit.
According to the data of China pig breeding network, since the high point of 16.49 yuan / kg in early January this year, the price of live pigs (external three yuan) has continued to fall. The latest quotation on February 11 was 12.91 yuan / kg, down 21.71% from the high point in January, down nearly 60% from the high of more than 30 yuan in February 2021.
In a typical cyclical industry, raising pigs is not a business that makes money forever. With the continuous bottoming of the pig market, the performance of most listed pig enterprises has entered a "comprehensive loss" state. According to the 2021 annual performance forecast successively released by major listed pig enterprises, except for Muyuan Foods Co.Ltd(002714) , the remaining enterprises are almost trapped in losses, with a total loss of more than 50 billion yuan.
performance "sad"
In late January, Wens Foodstuff Group Co.Ltd(300498) released the performance forecast for 2021. It predicted that the net profit attributable to shareholders of Listed Companies in 2021 would be - 13 billion to - 13.8 billion yuan, down 275.06% to 285.84% from 7.426 billion yuan in the same period last year.
For the reasons for the change of performance in 2021, Wens Foodstuff Group Co.Ltd(300498) explained that the price of pigs fell sharply during the reporting period. Due to 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, the profit of the company's pig breeding business decreased significantly year-on-year, resulting in deep losses.
In fact, the huge loss of Wens Foodstuff Group Co.Ltd(300498) is not without signs. 2019 is the beginning year of a new round of rising cycle of pig prices. Under the continuous influence of the African swine fever epidemic, the number of pigs sold in Wens Foodstuff Group Co.Ltd(300498) this year fell from 22.29 million in 2018 to 18.51 million. However, with a growth rate of more than 250%, the company still ranked first among the most profitable A-share listed pig enterprises in 2019 with a net profit of nearly 14 billion yuan, with an average daily profit of about 38.27 million yuan. This is also the best report card of "quality" since its listing.
However, Wens Foodstuff Group Co.Ltd(300498) did not last long at this peak. According to the company's financial report, the company's loss scale in the first three quarters of 2021 has swallowed up the annual net profit in 2020.
It is not only Wens Foodstuff Group Co.Ltd(300498) that turns profit into loss. The performance of Jiangxi Zhengbang Technology Co.Ltd(002157) with large pig raising scale in China is also very worrying. According to the latest performance forecast, the company's forecast loss in 2021 is as high as 18.2-19.7 billion yuan, with a record loss. Jiangxi Zhengbang Technology Co.Ltd(002157) in the pre loss announcement, it said that in 2021, it sold 14.9267 million pigs, a year-on-year increase of 56.14%. However, due to the decline in the market price of live pigs in China, the average sales price of the company per head was 16.6 yuan / kg, and the income per head decreased by 1653 yuan. The increase of sales volume combined with the decrease of sales price affected the profit of 8.873 billion yuan.
"Maotai in the pig" Muyuan Foods Co.Ltd(002714) also failed to survive. The performance forecast shows that in 2021, the company's revenue is expected to rise from 56.277 billion yuan in 2020 to 80 billion yuan, but the net profit is significantly reduced to 6.5 billion yuan - 8 billion yuan, compared with 30.375 billion yuan in the same period of last year. It is worth noting that, according to the financial report, the net profit of Muyuan Foods Co.Ltd(002714) in the first three quarters of 2021 decreased by 58.53% year-on-year to 8.704 billion yuan, including a loss of 822 million yuan in the third quarter, which is its first quarterly loss in recent three years. According to this calculation, the expected loss range in the fourth quarter is between 700 million yuan and 2.2 billion yuan.
"During the reporting period, the number of pigs sold by the company increased significantly compared with the same period last year. However, due to the gradual recovery of China's pig production capacity, the pig price in 2021 decreased significantly compared with the same period last year, resulting in a significant decrease in the company's operating performance in 2021 compared with the same period last year." In the performance forecast, Muyuan Foods Co.Ltd(002714) once explained the main reason for the decline in performance.
How much will the price of live pigs drop in China in 2021?
Take Muyuan Foods Co.Ltd(002714) as an example, in 2020, the sales volume of Muyuan Foods Co.Ltd(002714) pigs reached 18.115 million, the sales revenue reached 55.065 billion yuan, and the average sales price of commercial pigs was 30.4 yuan / kg. According to its recently disclosed live pig sales briefing in December 2021, the average sales price of commercial pigs has fallen to 14.75 yuan, of which it even fell below 12 yuan in September and October 2021. Wens Foodstuff Group Co.Ltd(300498) is no exception. In December 2021, the average sales price of hairy pigs was 16.21 yuan / kg, a decrease of 50.2% compared with the same period last year.
When can rebound?
So, is there any risk that pork prices will continue to decline?
\u3000\u3000 "In 2022, it is expected that the pig industry will continue to lose production capacity and the pig price will fluctuate to find the bottom. The contracts in March 22 and may 22 correspond to the number of fertile sows in May 21 and July 21 respectively. At that time, the number of fertile sows was at the peak stage of the current round of pig cycle. From the process of losing production capacity, by the end of 2021, the number of fertile sows in China was still higher than the normal level, which means that the number of fertile sows in October 2022 and In the previous period of time, China's pig slaughter volume still maintained an excess level, and it is difficult to see a trend turning point in pig prices. " A day ago, SDIC Anxin futures released a research report that the current round of pig cycle did not turn around.
Previously, Feng Yonghui, chief analyst of sozhu.com, said in an interview with reporters that from 2019 to 2020, the production expansion plans of pig raising enterprises can be described as "fierce", and the expansion rate has far exceeded the growth rate of the industry, "The continuous expansion of major pig enterprises will accelerate the downward trend of the cycle. I think the planning of enterprises should not be too radical. They should arrange and mediate production plans in a timely and rational manner. Now is the time for the industry to cool down, rather than encouraging everyone to expand wildly. After all, in the downward process of the cycle, enterprises will face a sharp decline in profits or a break in the capital chain." 。
According to the statement of Jiangxi Zhengbang Technology Co.Ltd(002157) in the performance forecast, the total number of sows in China decreased sharply from 2019 to 2020 due to the impact of the epidemic. In order to ensure supply and obtain profits, the company expanded rapidly by outsourcing high-priced sows. During the reporting period, thanks to the rapid increase of self-produced sows and the continuous decline of Chinese pig prices, the company carried out strategic transformation, From rapid development to high-quality development, it not only disposed of the inefficient sows purchased at a high price in the early stage, but also further optimized the population in order to improve the efficiency of sows, optimize resources, reduce costs and ensure capital safety. In total, the dead Amoy can breed about 2.2 million sows and reserve sows, with a loss of 6.2 billion yuan to 6.8 billion yuan.
\u3000\u3000 "Since last year, farms have gradually eliminated inefficient ternary sows and gradually replaced them with binary sows with high productivity efficiency. In addition, the decline of slaughter weight is also a measure to reduce costs and increase efficiency. At present, there are more pigs of 100kg-120kg in order to optimize the feed meat ratio. In addition, the compression of management cost and personnel cost is also one of the measures." According to Wang Yanan, a pig analyst at Zhuo Chuang information, the current market is still in a state of oversupply, and pig prices continue to decline. For slaughtering enterprises, the decline in pig prices means that the purchase cost of raw materials has fallen, which has a certain effect on lowering meat prices. In addition, the recent pork market is in the off-season of traditional consumption, which has no pulling effect on the pork market. Therefore, the short-term pork price may still be in the trend of shock and decline.
