After the “Zhumao” Muyuan Foods Co.Ltd(002714) is expected to drop by 70%, another pig enterprise is expected to fall into deep losses.
According to the latest performance forecast of Wens Foodstuff Group Co.Ltd(300498) (300498), the company is expected to lose 13-13.8 billion yuan in 2021, compared with 7.426 billion yuan in the same period of last year.
According to the relevant provisions and requirements of the accounting standards for business enterprises, the amortization of equity incentive expenses last year was about 500 million yuan. In addition, about 2.5 billion yuan of impairment provision was preliminarily made for the current consumable biological assets and productive biological assets. At the same time, the company increased financing in response to the downturn of the industry, and the financial expenses increased significantly year-on-year.
In the first three quarters of last year, Wens Foodstuff Group Co.Ltd(300498) had a net profit loss of 9.7 billion yuan, of which the loss in the third quarter was as high as 7 billion yuan. Combined with the performance forecast, the loss in the fourth quarter of last year may be narrowed month on month.
In terms of the main business of , last year Wens Foodstuff Group Co.Ltd(300498) sold 13.2174 million pigs (including hairy pigs and fresh products), and the average sales price of hairy pigs was 17.39 yuan / kg, a year-on-year decrease of 48.18%.
Specifically, due to the sharp decline in the price of live pigs, the continuous rise in the price of feed raw materials, the fattening of some purchased pig seedlings and the continuous promotion of pig breeding optimization, the profit of Wens Foodstuff Group Co.Ltd(300498) pig breeding business decreased significantly year-on-year, resulting in deep losses. Wens Foodstuff Group Co.Ltd(300498) said that the company will continue to promote the work of consolidating the foundation of pig business, improve the biosafety prevention and control system, continuously improve the quality of sows on hand, improve the listing rate of pigs and reduce the cost of pig breeding.
In contrast, the overall situation of the poultry market has improved. Last year, the Wens Foodstuff Group Co.Ltd(300498) poultry business remained profitable as a whole.
Last year Wens Foodstuff Group Co.Ltd(300498) sold 1.101 billion broilers (including wool chicken, fresh products and cooked food), with a year-on-year increase of 4.76%, and sold meat ducks with a year-on-year increase of 1.85%. The production performance of the company’s poultry industry maintained the company’s historical high level for many consecutive months, but the breeding cost was raised due to the continuous rise of feed raw material prices, but the company’s poultry business was profitable as a whole.
Wens Foodstuff Group Co.Ltd(300498) has made plans for the increment of pigs and chickens in 2022.
In a recent institutional survey, Wens Foodstuff Group Co.Ltd(300498) executives said that in terms of pigs, the company’s initial plan for the sale of pigs (including hairy pigs and fresh products) in 2022 is 18-20 million, and about 8-10 million more in 2023. The company will also comprehensively consider the future market changes and appropriately adjust the listing plan. In addition, for broilers, the company expects to maintain an annual growth rate of about 5% in the next few years. Among them, the scale of wool chicken is relatively stable, and the future growth is mainly to increase the output of varieties suitable for slaughter.
At present, the Wens Foodstuff Group Co.Ltd(300498) breeding cost decreases month by month. With the clearing of purchased pig seedlings at a high price in the early stage, the breeding cost of the company gradually returns to normal. The company’s full cost target for pig breeding in 2022 is 7.8 yuan / kg.
For the prevention of African swine fever, Wens Foodstuff Group Co.Ltd(300498) pig business mainly adopts the business models of “company + farmers (or family farms)” and “company + modern breeding community + farmers”. A strict biosafety prevention and control system has been established from hardware and software, the overall epidemic prevention level has been significantly improved, and the epidemic prevention ability and effect of the company have been greatly improved.
Recently, the national development and Reform Commission monitored that the specific price of pig grain has entered the three-level early warning range of excessive decline. In addition, the data show that the stock of fertile sows has continued to decline since July last year. But Wens Foodstuff Group Co.Ltd(300498) is not optimistic about whether the pig industry has hit the bottom.
According to the company’s executives, the sharp decline in pig prices in the early stage led to the partial deregulation of the industry’s production capacity, but the duration was short. Despite the recent rise in pig prices, according to the national breeding sow stock data released by the Ministry of agriculture and rural areas, the current stock is still higher than the normal level. It is expected that the deregulation of pig production capacity will continue and may run at the bottom for some time. In contrast, the company remains relatively optimistic about the chicken price in 2022. Considering the large amount of capacity removal in the industry in the early stage, it is expected that the chicken industry is expected to maintain normal and reasonable income.
According to the market performance of , since the bottom of July 21 last year, Wens Foodstuff Group Co.Ltd(300498) share price has rebounded by about 48% and closed at 19.28 yuan / share; The pork concept sector rose about 30% over the same period.
Dongguan Securities pointed out that looking forward to 2022, if the production capacity of breeding sows continues to be reduced, combined with the fact that pigs lag the production capacity of breeding sows for 10 months, the industry is expected to usher in an inflection point around the third quarter. Considering that the peak consumption season in the fourth quarter of 2021 makes the pig price rebound to a certain extent, or affects the length of the pig cycle to a certain extent. If the follow-up pig price drops, the loss range of pig breeding companies will further increase, or accelerate the bottoming process of pig cycle. In the follow-up, we should continue to pay attention to the important data such as the stock of fertile sows and the performance of pig enterprises, and look for appropriate layout opportunities.
