The performance of feed industry leader Guangdong Haid Group Co.Limited(002311) ( Guangdong Haid Group Co.Limited(002311) . SZ) declined due to pig breeding.
On the evening of April 11, Guangdong Haid Group Co.Limited(002311) released the annual report of 2021, during which the company realized an operating revenue of 85.999 billion yuan, an increase of 42.56% year-on-year; The net profit attributable to shareholders of listed companies was 1.596 billion yuan, a year-on-year decrease of 36.73%. The company plans to pay 1.5 yuan for every 10 shares.
Affected by the pig cycle, Guangdong Haid Group Co.Limited(002311) 2021 saw both the volume and price of feed business rise, but the cost was under pressure, and the breeding business suffered a huge loss of 896 million yuan. The above situation did not improve significantly in the first quarter of this year.
In the months before and after the Guangdong Haid Group Co.Limited(002311) share price hit a new high since its listing, Liu Yanchun, a well-known fund manager, increased his positions greatly. Recently, the company’s share price was at a new low since July 2020, and Liu Yanchun had a high probability of being “caught”.
2021 pig feed business has a high prosperity
Guangdong Haid Group Co.Limited(002311) main businesses include animal seedlings, feed, animal protection and pig breeding. Among them, feed sales is the most important business, accounting for more than 80% of the company’s total revenue throughout the year; Aquaculture business accounts for about 10% of the company’s total revenue.
The feed industry will lag behind the cycle of the breeding industry. The prosperity of the breeding industry directly affects the farmers’ choice of feed product quality, the enthusiasm of feed feeding, the sensitivity of feed product price and so on. Therefore, the cyclical factors of feed industry will offset each other and become a weak cyclical industry .
2021 is known as the “worst pig cycle in history”. The amount of pork breeding is far greater than consumer demand, the market is in a state of oversupply, and pork prices continue to decline. The feeding quantity has a direct impact on the breeding quality.
In the above context, Guangdong Haid Group Co.Limited(002311) has a high boom in feed sales business, with an annual revenue of 69.826 billion yuan, a year-on-year increase of 43.19%. However, the gross profit margin of the business decreased by 1.24% to 9.08% year-on-year.
Figure: Guangdong Haid Group Co.Limited(002311) 2021 business revenue
Guangdong Haid Group Co.Limited(002311) feed business mainly uses corn, soybean meal and other raw materials, and the material cost of this business accounts for more than 95% of the total cost all year round the price of bulk Shenzhen Agricultural Products Group Co.Ltd(000061) directly affects the operating cost of the company .
According to the statistics of the Ministry of rural agriculture, at the end of 2021, the average price of corn reached 2930 yuan / ton, an increase of 26.3% over last year’s average price, a record high; The average price of soybean meal reached 3790 yuan / ton, an increase of 14.2% over the average price of last year. The price rise of corn and soybean meal has also led to the rise of other Shenzhen Agricultural Products Group Co.Ltd(000061) prices. Wheat, sorghum, rice and cottonseed meal have increased to varying degrees.
Figure: Guangdong Haid Group Co.Limited(002311) feed industry cost composition
Guangdong Haid Group Co.Limited(002311) also said that corn prices will further increase on the basis of rising to a high level in 2020; Compared with the beginning of the year, the price of soybean meal rose to a relatively high level in history and remained at a relatively high level throughout the year. Driven by the rise in raw grain prices, China’s feed prices hit a record high.
The simultaneous rise of volume and price in the feed industry is the main driving force for the growth of Guangdong Haid Group Co.Limited(002311) performance. The company also said in its annual report that feed sales reached a new high and the market share was further improved.
“pig cycle” increased the feed business of Guangdong Haid Group Co.Limited(002311) but also collapsed the company’s breeding business .
In 2021, the prices of poultry and pork remained low, and livestock and poultry breeding was squeezed by the decline in the price of terminal meat products and the rise in the cost of raw materials, resulting in significant losses and difficulties in breeding.
In terms of pig breeding business, Guangdong Haid Group Co.Limited(002311) sold about 2 million pigs in the whole year, realizing an operating revenue of about 4.642 billion yuan, a year-on-year increase of 25.08%. Affected by the sharp fluctuations in the prices of piglets and pigs during the reporting period, pig breeding business lost 896 million yuan in the whole year .
this year’s production and sales are under further pressure
On the same day, Guangdong Haid Group Co.Limited(002311) disclosed the first quarterly report of 2022, and the overall business situation was more difficult.
In the first quarter of this year, Guangdong Haid Group Co.Limited(002311) achieved a revenue of 19.953 billion yuan, a year-on-year increase of 26.98%; The net profit attributable to the shareholders of the listed company was 201 million yuan, a year-on-year decrease of 71.62%.
In terms of business, the operating revenue of Guangdong Haid Group Co.Limited(002311) pig breeding sector was 1.374 billion yuan, a year-on-year decrease of 1.56%. About 830000 pigs were sold, and the breeding cost decreased significantly. However, due to the low price, the net profit attributable to the shareholders of the listed company was about – 302 million yuan.
Guangdong Haid Group Co.Limited(002311) also said that pig breeding has been in a deep loss cycle in the first quarter of this year .
Only when the price of pork picks up can Guangdong Haid Group Co.Limited(002311) breeding business turn around. However, for the follow-up pork price trend, the institution gave different views: Guosen Securities Co.Ltd(002736) 3 on March 14, the research report believed that “this round of pig cycle lasts for a long time, the amplitude is particularly large, and the pig price has not yet reached the bottom” The Pacific Securities Co.Ltd(601099) Securities Research Report on April 4 believed that “the pig cycle reversal is imminent, maintaining a positive rating for the pig industry”.
On the one hand, the overall feed sales remained stable this year.
The first quarterly report shows that excluding other businesses of pig breeding, Guangdong Haid Group Co.Limited(002311) achieved an operating revenue of 18.579 billion yuan, a year-on-year increase of 29.77%; The net profit attributable to the shareholders of the listed company was 503 million yuan, a year-on-year increase of 3.52%. The company achieved 4.19 million tons of feed sales (excluding internal breeding sales), a year-on-year increase of 22%, and the sales volume maintained a stable growth.
In terms of cost, Guangdong Haid Group Co.Limited(002311) said that the situation in Russia and Ukraine and the weather in South America in the first quarter of this year led to a sharp rise in global Shenzhen Agricultural Products Group Co.Ltd(000061) prices after the Spring Festival, feed costs rose sharply .
share price hit a new low, Liu Yanchun quilt
Affected by the performance, Guangdong Haid Group Co.Limited(002311) share price has fluctuated downward since the second half of 2021.
In 2022, the company’s performance continued to be under pressure, superimposed on the overall decline of the market and other factors, and the share price has fallen by 26.48% since the beginning of the year.
Figure: Guangdong Haid Group Co.Limited(002311) stock price trend
the two funds managed by Liu Yanchun, a well-known fund manager, have increased their positions for more than consecutive quarters Guangdong Haid Group Co.Limited(002311) . By the end of the first quarter of this year, Jingshun Great Wall emerging growth hybrid securities investment fund and Jingshun Great Wall Dingyi hybrid securities investment fund managed by Liu Yanchun held Guangdong Haid Group Co.Limited(002311) about 59 million shares, accounting for 3.55% of the total share capital of the company.
Guangdong Haid Group Co.Limited(002311) share price reached a new high since its listing in February 2021, while Liu Yanchun’s position increase occurred from the fourth quarter of 2020 to the third quarter of 2021, which was a few months before and after the share price reached a new high. Liu Yanchun did not adjust the company’s shares in the fourth quarter of 2021 and the first quarter of this year, but the company’s share price has recently reached a new low since July 2020.
In the first quarter of this year, there were multiple capital positions Guangdong Haid Group Co.Limited(002311) . Among them, Hong Kong Central Clearing Co., Ltd. (northbound capital) increased its positions for two consecutive quarters; The “rosefinch Fund – Shaanxi Coal Industry Company Limited(601225) – Shaanxi coal rosefinch new economy industry single asset management plan” under the well-known private placement rosefinch also increased its positions.
In addition, at the end of the first quarter of this year, the number of Guangdong Haid Group Co.Limited(002311) shareholders increased by 10.8% month on month to 22000.
