“African swine fever has not passed, and the impact of pig cycle is also great.”
When talking about the current market pattern, New Hope Liuhe Co.Ltd(000876) Group Chairman Liu Yonghao told the 21st Century Business Herald reporter. Under the complicated internal and external situation, New Hope Liuhe Co.Ltd(000876) group holds a high-level strategy discussion every two months to gradually clarify its self positioning.
In fact, Liu Yonghao’s sense of urgency comes from the objectively existing and further increasing business pressure.
The performance forecast shows that last year, New Hope Liuhe Co.Ltd(000876) net loss ranged from 8.6 billion to 9.6 billion yuan, a year-on-year decrease of 273.94% – 294.17%. The company is the listed entity of New Hope Liuhe Co.Ltd(000876) group in the agricultural sector.
The main reason comes from the large loss of pig breeding business. In that year, the price of pigs decreased significantly compared with the same period last year (the average sales price of commercial pigs decreased by about 42% year-on-year), the price of feed raw materials increased continuously, and the cost of pig breeding increased significantly year-on-year.
New Hope Liuhe Co.Ltd(000876) is just a corner of the loss. It is estimated that there will be a loss of RMB 15.78 billion to RMB 18.21 billion in 2021.
According to the most conservative estimation, the losses of the three enterprises reached 40.137 billion yuan.
Therefore, a difficult self-help movement is under way.
bottom
“Breeding losses will increase.”
This is from official judgment. According to China Central Television News, Chen Guanghua, deputy director of the animal husbandry and Veterinary Bureau of the Ministry of agriculture and rural areas, said at a recent press conference that 449 million pigs would be listed in the next six months, that is, from January to June this year. Based on this calculation, the pork market supply must be at a high level in the first half of this year. The downward trend of pig prices will continue for some time. In March and April, pig prices may fall to the bottom of about 12 yuan per kilogram.
On March 15, the data of China pig breeding network showed that the price of three yuan outside the pig on that day was 12.15 yuan / kg, down 0.08 yuan per kg; The three yuan price of pigs was 11.98 yuan / kg, down 0.07 yuan per kg; The price of raw and miscellaneous pigs was 11.64 yuan / kg, down 0.13 yuan per kg. The ratio of pig to grain was 4.29:1.
On the previous day, the National Bureau of statistics released the market price monitoring of 50 important means of production in 9 categories in the national circulation field. It showed that in early March 2022, compared with late February, the quotation of live pigs (external three yuan) was 12.3 yuan per kilogram, a month on month decrease of 1.6%.
Costs continue to rise.
Since the fourth quarter of last year, the global grain prices have increased significantly, and the prices of energy raw materials and protein raw materials in China have increased significantly. Especially since the international geopolitical conflict in late February, the global feed raw material prices have increased significantly.
In addition, the high temperature and drought in many main soybean producing areas in South America this year destroyed the per unit yield potential of soybean crops. Argentina’s Rosario Grain Exchange on Thursday lowered Argentina’s soybean production forecast for 2021 / 22 from 40.5 million tons to 40 million tons. Conab, a commodity supply company under the Brazilian Ministry of agriculture, lowered its forecast of Brazilian soybean production from 125471 million tons to 122.77 million tons on Thursday.
Zhuo Chuang information data show that as of March 10, the average price of corn in the Northeast market was 263813 yuan / ton, up 40.63 yuan / ton or 1.56% from the same period last week; As of March 10, the average spot price of soybean meal was 4930 yuan / ton, a sharp increase of 290.83 yuan / ton or 6.26% over the same period last week.
In addition, due to the high absolute price of feed raw materials, the financing interest of feed procurement will also increase compared with that before, and the marginal cost of pig breeding will also increase.
This is a kind of torture for the large-scale pig enterprises that are difficult to turn around.
But the head pig enterprises still seem to be within the safe range.
On March 11, at the investor exchange activity, Wens Foodstuff Group Co.Ltd(300498) said that the probability of bankruptcy of large pig enterprises was small.
\u3000\u3000 “No matter how low the pig price falls, the pigs in stock at any growth stage can be sold and realized at any time. Normally, as long as they do not use a lot of capital leverage, the probability of bankruptcy is small. At the same time, large pig enterprises have more financing channels and strong pressure resistance. When the capital is extremely difficult, they can also sell piglets, pigs, sows and other assets, Increase the return of funds, reduce the capital expenditure brought by the consumption of feed raw materials, and solve the urgent need. ” Wens Foodstuff Group Co.Ltd(300498) executives said.
However, he also said that the above-mentioned methods have a great impact on the speed of enterprise capacity expansion. It takes a long time for sows to recover, which is difficult, and even leads to the shrinkage of market scale.
“adjustment”
Facing the difficult cycle, the giants are accelerating self-adjustment.
Wens Foodstuff Group Co.Ltd(300498) the good news comes from the decline in pig breeding costs. According to its disclosure, the comprehensive cost in January was less than 9 yuan / kg. The whole is in line with the preliminary objectives.
Jiangxi Zhengbang Technology Co.Ltd(002157) chose to sell its feed business in Southwest China to recover 2-2.5 billion yuan.
\u3000\u3000 “Pig breeding business has become the most core business. However, affected by the decline in the average selling price of pigs, the elimination of inefficient sows and the elimination of inferior production capacity, it has also undertaken large losses under the strategic adjustment and Reform in addition to the normal operating losses. It will continue to cultivate pig breeding, strengthen pig breeding, fattening technology and process control, and ensure normal production and operation in extreme environments. ” Jiangxi Zhengbang Technology Co.Ltd(002157) said in the announcement.
New Hope Liuhe Co.Ltd(000876) also launched a new round of fixed increase plan of no more than 4.5 billion yuan to supplement cash flow. It also adjusted the cost in four aspects: cost, dead Amoy, feed and seedling.
Last year, the cost of New Hope Liuhe Co.Ltd(000876) seedlings was 18 yuan, which is expected to drop to 16 yuan in the middle of this year; The feed is expected to be around 7.5 yuan from 7.9 yuan at the end of the year to the middle of the year, and there is room for 0.1-0.2 yuan for veterinary medicine and vaccine; The foster care fee remains basically stable, and there is still room for a decline of 0.2-0.3 yuan; In terms of dead Amoy management, there is also room for a few cents to fall through the investment in hardware transformation.
“Feed industry is the cornerstone business of New Hope Liuhe Co.Ltd(000876) core, and pig raising is the growth business. The overall operation is sustainable.” On March 2, Zhang Minggui, President of New Hope Liuhe Co.Ltd(000876) said at the media exchange meeting.
Liu Yonghao also suggested in the relevant proposal that pork consumption should be encouraged, the R & D and innovation of pork processed products should be guided and supported, the pork consumption scene should be widened, and the consumption upgrading of pork market should be promoted.
At the same time, he also suggested that we should refine and improve the regulation policies for pork collection, release, storage, import and export, strengthen the management of market expectations, and give more effective play to the role of policy regulation. The upstream and downstream food breeding institutions should be encouraged to improve their ability to trace the source of food and improve the information security of slaughtering enterprises through the integration of raw material and information.
For key cash flows, Liu Yonghao suggested increasing financial policy support for breeding enterprises, guiding rating agencies to make reasonable and objective judgments, and improving financial risk hedging tools.
\u3000\u3000 “It is suggested that policy banks and state-owned banks play a leading and exemplary role in financial support, renew loans to enterprises stably in the low ebb period, provide medium and long-term loan support with low interest rate and can pass through the cycle, and give a certain grace period to resume production, so as not to withdraw loans or cut off loans due to phased difficulties. It is suggested that relevant departments improve the pig price insurance system and give subsidies to help implement it; improve the long-term loan.” And futures trading system to provide richer risk hedging tools for entity production enterprises. ” Liu Yonghao said.
Wens Foodstuff Group Co.Ltd(300498) said it was more cautious about the hedging business of pig futures. Futures talents and teams have been reserved, but the actual number of hedging operations is not much at present.
The key to solving the problem of pig enterprises is the return of pig prices. In this regard, enterprises seem to have made plans for a long-term war.
“In the first half of this year, the overall market pressure will still be greater. It may be a better pattern in the second half of this year than in the first half of this year, but it is not particularly optimistic when it is leveled all year round.” Zhang Minggui said.
Wens Foodstuff Group Co.Ltd(300498) also expressed optimistic estimation that pig prices may enter the upward channel of the next cycle after the third quarter of 2022; It is pessimistic to estimate that 2022 is still at the social average breakeven line, and it may take 2023 to enter the upward channel of the next cycle.
On March 15, New Hope Liuhe Co.Ltd(000876) closed at 14.27 yuan, down 6.24% Wens Foodstuff Group Co.Ltd(300498) closed at 18.78 yuan, down 4.23% Jiangxi Zhengbang Technology Co.Ltd(002157) closed at 5.82 yuan, down 4.75%.
In the peak period, the share prices of the three companies reached 42.2 yuan, 34.74 yuan and 25.26 yuan respectively.
