as a giant of pork products, the report card of Henan Shuanghui Investment & Development Co.Ltd(000895) 2021 is not satisfactory
On March 28, Henan Shuanghui Investment & Development Co.Ltd(000895) released the annual report of 2021. The financial report shows that during the reporting period, Henan Shuanghui Investment & Development Co.Ltd(000895) achieved an operating revenue of about 66.682 billion yuan, a year-on-year decrease (after adjustment) of 9.72%; The net profit attributable to the parent company was about 4.866 billion yuan, a year-on-year decrease (after adjustment) of 22.21% Henan Shuanghui Investment & Development Co.Ltd(000895) explained in the financial report that the decline in revenue was mainly affected by the decline in pig prices and meat prices; The decline in net profit was caused by the company’s deviation in controlling the rhythm of frozen products due to the higher than expected fluctuation of pig market in 2021.
It is worth mentioning that on the same day when the financial report was released, Shuanghui again fell into the problem of food safety. Due to the topic of “online shopping for spoiled ham sausage to deal with being attacked by customer service”, Shuanghui triggered a heated discussion on the microblog. In this regard, some netizens joked that “now you have to graduate from a famous school to eat a ham sausage”, and some netizens said that “Shuanghui will never buy it again”.
In view of the reasons for the decline of Henan Shuanghui Investment & Development Co.Ltd(000895) , improvement measures and successive food safety problems of the company, the reporter of international finance called Henan Shuanghui Investment & Development Co.Ltd(000895) on the afternoon of March 29, but no one answered the phone.
pork price drop or drag on income
As a leading enterprise in China’s meat industry, Henan Shuanghui Investment & Development Co.Ltd(000895) business mainly focuses on the slaughtering industry and meat processing industry, and involves the feed industry and breeding industry in the upstream of the meat industry chain, as well as the packaging industry and Commerce in the downstream, supporting the development of foreign trade, etc.
In terms of business sales, in 2021, the total external sales volume of Henan Shuanghui Investment & Development Co.Ltd(000895) meat products (including poultry products) reached 3.3 million tons, with a year-on-year increase of 8.3%, of which the sales volume of fresh products was 1.6325 million tons, with a year-on-year increase of 18.24%; The sales volume of packaged meat products was 1.5576 million tons, a year-on-year decrease of 1.85%; The sales volume of poultry products was 111500 tons, up 37.32% year-on-year.
Although Henan Shuanghui Investment & Development Co.Ltd(000895) ‘s business sales volume mainly increased, its main businesses decreased in terms of business revenue. The financial report shows that in 2021, the revenue of Henan Shuanghui Investment & Development Co.Ltd(000895) slaughtering business was about 39.073 billion yuan, a decrease of 19.05% over the same period of last year, accounting for 58.6% of Henan Shuanghui Investment & Development Co.Ltd(000895) operating revenue; The operating revenue of meat products business was about 27.351 billion yuan, a decrease of 2.66% over the same period of last year, accounting for 41.01% of the company’s operating revenue; The revenue from other businesses was about 6.307 billion yuan, a year-on-year increase of 21.31%, accounting for 9.46% of the company’s operating revenue; In addition, the company’s internal industry offset 6.049 billion yuan, accounting for – 9.07% of the company’s operating revenue.
The reporter noted that Henan Shuanghui Investment & Development Co.Ltd(000895) last year’s operating cost was 56.445 billion yuan, a decrease of 9.15% over the same period last year, but it was still lower than the decrease of 9.72% of operating income, and its gross profit margin decreased to about 15.35% from 17.26% in the same period last year.
Henan Shuanghui Investment & Development Co.Ltd(000895) said in the financial report that due to the decline of pig price and other factors, the price of purchased pigs decreased by 43.9% year-on-year, and the cost of raw materials for fresh products and packaged meat products decreased significantly, affecting the overall operating cost to decrease by 19.3 billion yuan year-on-year, accounting for 31% of the operating cost in the same period; However, also affected by the decline in pig prices, the sales price of the company’s fresh products also fell by more than 30% year-on-year, affecting its operating revenue to fall by 16.5 billion yuan year-on-year, accounting for 22% of the revenue in the same period.
relapse into food safety issues
It is worth noting that not only did the performance fall short of expectations, but Henan Shuanghui Investment & Development Co.Ltd(000895) successively fell into food safety problems in the past half month.
On March 14, Henan Shuanghui Investment & Development Co.Ltd(000895) once made a hot search on Weibo due to chaos in the production workshop. At that time, the reporter of Jiangxi TV’s “Urban Scene” column found in an unannounced interview that there were not only problems in the Nanchang Shuanghui production workshop, such as the direct bagging and warehousing of pork chops on the ground and wiping pork with muddy water towels, but also the damage of the air shower system in the production and disinfection workshop, the provision of smelly and dirty protective clothing for staff, and the failure of many employees to disinfect according to the operation process.
On March 15, Henan Shuanghui Investment & Development Co.Ltd(000895) issued a statement of apology, saying that the company had suspended the relevant responsible person on March 15, and would fully cooperate with the market supervision department of Jiangxi Province in investigation, verification and disposal, and sampled two products for inspection; And trace the source of the “frozen pig inch bone a” batch of products dropped in the video. At present, all 310kg products have been sealed and controlled; At the same time, the work clothes of all employees of Nanchang Shuanghui shall be fully cleaned and disinfected; The food safety training and assessment of employees shall be strengthened, especially the systematic training for new employees this year.
In addition, Henan Shuanghui Investment & Development Co.Ltd(000895) also said in the apology statement that in the next step, the company will further strengthen production management, ensure product quality and constantly improve the self inspection system. However, the time is less than half a month, and Shuanghui is on the hot search again due to food safety problems.
According to Zhongxin Jingwei, recently, a consumer in Heilongjiang ate a deteriorated foreign body when eating Shuanghui chicken ham sausage purchased online, and then asked the customer service for compensation and refund. Because he was not satisfied with the customer service’s handling method of “only one compensation”, he received the whole compensation after the intervention of the platform. However, the customer service sent a private letter to the consumer the next day, calling it “two faced and three universities”.
In this regard, Shuanghui said that the company has verified that the store involved is not a direct store of Shuanghui, and Shuanghui has asked the store to close down for rectification. As for the deterioration reason, product batch and origin of relevant products, the company is still unclear and is still under investigation.
In the view of Zhu danpeng, an analyst of the food industry, Henan Shuanghui Investment & Development Co.Ltd(000895) the biggest problem is that it does not put food safety first. Its KPI mainly focuses on revenue and profit. Under such corporate culture and concept, it is difficult to cure the problem of food safety.
It is also expected that the performance of Shuanghui (2021) is not ideal, because there is a lot of room for improvement in the company’s business philosophy, industrial chain integrity, (operational) system process and food safety. For Shuanghui, 2022 may be a great challenge. Zhu danpeng said, however, with the integration of Shuanghui with other branches, there may be no small changes in its professional division of labor, and with the increase of national penalties for food safety, food safety problems should also be improved.
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