The late payment of commercial bills, suspected financial fraud, the continuous downturn of pig prices, the transformation from profit to loss in the third quarter, domestic and foreign troubles made Muyuan Foods Co.Ltd(002714) (002714. SZ), known as "Zhumao", difficult in the second half of the year.
The rapid expansion has brought Muyuan Foods Co.Ltd(002714) a fast-growing number of pigs, but the huge investment and the depressed pig price since this year have limited Muyuan Foods Co.Ltd(002714) 's profit to a certain extent.
This year, the share price of Muyuan Foods Co.Ltd(002714) seems to be on a roller coaster. In February, Muyuan Foods Co.Ltd(002714) once stood at a high point of 92.53 yuan and bottomed to 39.01 yuan in July. As of the closing on December 31, Muyuan Foods Co.Ltd(002714) was reported at 53.36 yuan / share.
31 subsidiaries' acceptances overdue
On December 2, the list of commercial bills continuously overdue as of November 30, 2021 disclosed by Shanghai Stock Exchange showed that the commercial bills accepted by 31 companies directly or indirectly controlled by Muyuan Foods Co.Ltd(002714) continued to be overdue. At that time, Muyuan Foods Co.Ltd(002714) explained in the announcement that the company did not receive effective prompt payment applications from some holders in time, or the clearing method selected by the holders did not meet the bank's requirements.
On December 15, China integrity international issued a rating announcement, adjusting the rating outlook of Muyuan Foods Co.Ltd(002714) from stable to negative.
In fact, the doubts of the outside world are not only about the overdue commercial bills, but also the financial pressure caused by the continuous rise of the company's debt.
In the past two years, due to the rapid expansion, Muyuan Foods Co.Ltd(002714) investment scale is large and the debt continues to rise. By the end of September 2021, the company's total debt has increased to 65.826 billion yuan, including 34.291 billion yuan of short-term debt and 9.95 billion yuan of monetary capital, facing certain capital pressure.
In addition, there are some uncertain factors being worried by the market. Muyuan Foods Co.Ltd(002714) is still waiting for an unapproved fixed increase plan. In October this year, the company plans to raise no more than 6 billion yuan from the controlling shareholder muyuan group, which will be used to supplement working capital after deducting the issuance expenses.
On December 22 soon after, Muyuan Foods Co.Ltd(002714) said at the fifth extraordinary general meeting of shareholders in 2021 that according to the current capital plan arrangement, the company has no debt repayment risk. Muyuan Foods Co.Ltd(002714) also said that after the commercial ticket incident, the company took a variety of measures to quickly solve the problem, standardize business operations and improve personnel ability. At present, the company's business with major cooperative banks is progressing smoothly, and there is no loan withdrawal and loan interruption.
behind the industry leading profit
Since 2021, due to the increase of pig slaughter and other factors, pig prices have remained depressed. According to the data of zhuyitong, the national average price of pigs has continued to decline since January this year. The pig price in the second quarter was lower than that in the first quarter, and the pig price in the third quarter was lower than that in the second quarter. After entering the fourth quarter, the pig price rose slightly, but it has been maintained below 20 yuan.
However, in this case, the net profit of Muyuan Foods Co.Ltd(002714) in the first half of this year was 11.2 billion yuan. Compared with other pig enterprises, Muyuan Foods Co.Ltd(002714) has a very considerable profit. New Hope Liuhe Co.Ltd(000876) lost 3.4 billion yuan in the first half of the year, Wens Foodstuff Group Co.Ltd(300498) lost 2.5 billion yuan, Jiangxi Zhengbang Technology Co.Ltd(002157) lost 1.4 billion yuan, Jiangsu Lihua Animal Husbandry Co.Ltd(300761) lost 300 million yuan, and Zhejiang Huatong Meat Products Co.Ltd(002840) only made 150 million yuan.
At that time, in the face of extremely high net profit, Muyuan Foods Co.Ltd(002714) was once referred to as financial fraud by a network big v. Moreover, Muyuan Foods Co.Ltd(002714) is more unusual. Usually, when the pig price drops rapidly, the pig enterprise accounting provides a certain impairment, but Muyuan Foods Co.Ltd(002714) does not. In addition, the number of Listed Companies in Africa has doubled under the background of 714} in 2018.
In this regard, Feng Yonghui, an analyst at China pig early warning network, told the first financial reporter that the mode selected by Muyuan Foods Co.Ltd(002714) is "self breeding and self raising". The whole industrial system related to pig raising is self built and does not have in-depth cooperation with the outside world. "Pigs are their own, and the talent team is trained by themselves. All pig farms are built with their own money, not with the cooperation of farmers."
He believes that compared with the asset light mode of "company plus farmers" adopted by some enterprises, Muyuan Foods Co.Ltd(002714) 's "self breeding" mode has more advantages in resisting force majeure factors such as classical swine fever and pig cycle.
Feng Yonghui further explained: "The advantages of the 'company plus farmers' model are asset light and rapid expansion. However, the disadvantage of this model is that when African Swine Fever comes, the share to farmers is high, resulting in uncontrollable company costs. In addition, pigs are not in their own pig farm or in their own technical personnel system, so the company can't decide what level of pigs to develop."
rapid expansion brings cost pressure
In recent years, Muyuan Foods Co.Ltd(002714) is expanding at a high speed. According to the semi annual report of 2021, as of the first half of 2021, the company has established 230 breeding subsidiaries, 11 pig breeding seed companies and 20 slaughtering subsidiaries in China.
Let's look at the growth rate of pig slaughter. The announcement shows that the slaughter volume of pigs in Muyuan Foods Co.Ltd(002714) in 2019 and 2020 will be 10.25 million and 18.11 million respectively. In November this year, the company has sold 35 million pigs.
According to Feng Yonghui's analysis, Muyuan Foods Co.Ltd(002714) has invested heavily in the expansion of industrial scale in recent years. "Unlike the production of industrial products, the pig industry can produce as long as all plants, equipment, machines and raw materials are bought back in advance. The follow-up is nothing more than to improve the production time and the supply of raw materials. However, with the increase of production, the pig industry will need more and more land occupation, feed, biological treatment and epidemic prevention costs."
It can be seen that with the increase of Muyuan Foods Co.Ltd(002714) pig slaughter, the input cost is also increasing.
So, when will the next round of pig cycle that pig enterprises, including Muyuan Foods Co.Ltd(002714) , are waiting for?
Some people in the industry believe that the stock of fertile sows peaked in June this year, about 10% higher than the normal level, and the growth rate of supply will continue until April and may next year, which is also the off-season of consumption. Therefore, the pig price in April and may next year may be lower than that in October this year, and then it will enter a new round of upward pig cycle.
Kaiyuan Securities pointed out in a research report: "We believe that the pig price is expected to fall below the industry cost line again in January 2022, so the industry will fall into a loss again, and the disadvantageous production capacity will show obvious signs of acceleration in this stage. From June to July 2022, it is expected that the industry production capacity will be more than 15% higher than the high level from May to June 2021, supporting the emergence of a new round of pig cycle price reversal."
(First Finance)
