On January 6, New Hope Liuhe Co.Ltd(000876) announced that it planned to issue no more than 368 million non-public shares to Nanfang hope, the largest shareholder, with a raised capital of no more than 4.5 billion yuan and an issue price of 12.24 yuan / share. After deducting the issuance expenses, it was used to repay bank debts.
In addition, New Hope Liuhe Co.Ltd(000876) announced the early termination of repurchase because the company has encountered phased challenges and difficulties since 2021. In order to ensure the stable operation and healthy development of the company, the company gives priority to investing funds in the daily operation of the company in combination with capital needs. Since the repurchase was launched in January 2021 and nearly expired in early January 2022, early termination is considered to be conducive to solving the compliance problem of this fixed increase.
fixed increase is conducive to improving the company’s capital structure and operating performance
Since 2021, the drastic fluctuation of pig cycle has had a significant impact on the pig breeding industry. According to the data of East Money Information Co.Ltd(300059) choice, in the first three quarters of 2021, almost all the companies in the A-share pig breeding sector experienced a decline in net profit, and the net profit attributable to the parent of most enterprises suffered losses. New Hope Liuhe Co.Ltd(000876) believes that the pig breeding industry as a whole will still be at the bottom of the cycle in 2022. After the Spring Festival, there will be an obvious downward trend in pig prices, and then there will be a reversal of the trend and turn into the upward range.
New Hope Liuhe Co.Ltd(000876) the fixed increase launched this time is considered to demonstrate the confidence of major shareholders in the company to cross the bottom of the cycle. The relevant person in charge of the company said that this fixed increase will have a positive impact on the improvement of the company’s capital structure and operating performance. The raised funds will help to optimize the company’s capital structure, improve the cash flow situation and enhance the company’s anti risk ability at the bottom of the pig cycle. At the same time, it helps to enhance the long-term development strength of the company.
As a leading enterprise in the industry, New Hope Liuhe Co.Ltd(000876) senior management team maintains firm confidence in the long-term development of the company. LAN Jia, Secretary of the board of directors and chief strategic investment officer, has publicly stated that from May 8 to November 1, 2021, the management team and core backbone have increased their holdings of about 19.7 million shares of the company’s shares through contractual funds, with a total amount of 256 million yuan.
New Hope Liuhe Co.Ltd(000876) said that in 2022, the company will maintain the existing capacity scale, practice its internal skills, improve production efficiency and reduce production costs, and will not make too much investment in new capacity. However, in terms of output, especially the slaughter volume of pigs, there will be a significant increase in a certain range. However, this growth is more based on the existing production capacity. By improving the production efficiency, the production full load rate, sow production performance, fat pig weight gain efficiency and other indicators are improved. This increase in output also helps to reduce the allocation of various asset inputs and reduce the company’s breeding costs.
the positive trend of the industry will not be affected by short-term price fluctuations
From the perspective of the industry, since the pig price in this round of pig cycle has fallen sharply from the high level, when the pig price will usher in the inflection point, when the bottom of the cycle will appear, and when the performance of listed companies will be improved, these problems have attracted the continuous attention of the market. Analysts interviewed by the Securities Daily generally believe that pig prices will fall in 2022 and are expected to stabilize and recover in the second half of the year, while the development prospect of pig breeding industry is still worth looking forward to.
Wang Meiting, researcher of Bank Of China Limited(601988) Research Institute, said: “At present, the number of pigs on hand and the number of fertile sows exceed the historical average by more than 5%. It is expected that pigs will be sold intensively in the next two quarters, and the market supply is relatively sufficient. Therefore, although there are factors such as government collection and storage, seasonal pork demand rise and so on, the market price has rebounded on the whole, but it remains low. We expect that the pork price will remain low in the first and second quarters of 2022 After the second quarter, due to the recent correction of the number of fertile sows and the number of pigs on hand, it is expected that the number of pigs on hand will gradually decline and the pork supply will shrink relatively. The recent low pig food ratio and pig loss will also inhibit retail investors from increasing the scale of pig breeding. Therefore, pork prices are likely to rise steadily after the second quarter. ” She believes that although the recent pork price is low and the pig industry has suffered general losses, the “industry development is still good”.
Wang Meiting further analyzed to the reporter of Securities Daily: “In the past two rounds of pig cycles, modern farms have made huge profits, and their good epidemic prevention level makes them less affected by African swine fever. Recently, due to the expectation that the cycle may come to the link of price rise, the industry leaders not only have not compressed pigs, but also the stock is expanding against the trend. It is expected that the whole industry will make good profits in the future The trend will not be affected by short-term price fluctuations. In the future, the further concentration of the industry will be the general trend. The trend of pig breeding enterprises to improve their voice and profit level through financial markets and upstream and downstream cooperation will not change, and the industry will increasingly move towards the layout of upstream and downstream pork deep processing and breeding. ”
Bai Wenxi, chief economist of IPG China, believes that China’s pig price trend is expected to stabilize and pick up in the second quarter or the second half of 2022. He told the reporter of Securities Daily: “Under the influence of pig prices, the future industrial concentration and intensification of the pig breeding industry will accelerate, and the speed of vertical integration of the industrial chain will also accelerate. In addition to the layout and extension of enterprises themselves to the upstream and downstream of the industrial chain, the strategic cooperation and alliance between upstream and downstream enterprises is also one of the important ways of vertical integration, such as the recent cooperation between muyuan and Shuanghui That’s it. Enterprises in the industry and industrial chain will usher in the opportunity of integration and integration, so as to promote fundamental changes in the industry pattern. ”
Yuan Shuai, Deputy Secretary General of China Rural Revitalization and Construction Commission, told the Securities Daily that China’s pork imports are expected to continue to decrease in 2022. During the 14th Five Year Plan period, China’s intensive, standardized, automated and intelligent production and operation of the whole industrial chain of breeding, slaughtering, processing and cold chain logistics will reach a new level.
According to the research report released by Citic Securities Company Limited(600030) , in the short term, the rebound in pig prices has ended. It is expected that pig prices will continue to weaken in the future. The industry has entered the second round of capacity removal, and the inflection point of the cycle is expected to appear in mid-2022. At the level of listed companies, with the gradual clearing of purchased piglets and sows in the early stage and the optimization of feed formula, the worst time point has passed, and it is expected that the breeding cost will be significantly improved in 2022.
(Securities Daily)
