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As of January 9, 12 pig breeding companies disclosed their 2023 sales briefings, with a total of 128 million pigs slaughtered. The three giants of Muyuan shares, Wen's shares, and New Hope's pig slaughter have hit a record high, specifically, Muyuan shares topped the list with 63.816 million slaughter; followed by Wen's shares, with 26,262,200 pigs slaughtered, an increase of 8,353,600 over last year; New Hope ranked third with 17,682,400 heads.
However, despite the large increase in slaughter, due to the sluggish pig price in 2023, the average sales price and income of listed pig enterprises have also been affected. Among the three major pig giants, only Wen's pig sales revenue in 2023 will increase by 12.67% year-on-year to 46.256 billion yuan. Muyuan's pig sales revenue in 2023 will be 108.217 billion yuan, a year-on-year decrease of 9.64%. New Hope's live pig sales revenue in 2023 will be 26.905 billion yuan, basically the same as the same period last year.
At present, China's pig production capacity is still in a state of surplus. Due to the rapid development of the pig industry in recent years, the pig production capacity has exceeded the market demand, resulting in farmers facing sales problems and price decline pressure, excess pig production capacity has also brought environmental pollution and waste of resources to the pig industry. Therefore, active decentralization has become a necessity for some enterprises, and it is urgent.
-- The scale of China's pig herd and slaughter
As a large agricultural country with a long history of pig breeding, pig production is an important part of agriculture. From 2015 to 2018, the annual slaughter of pigs was about 700 million heads, affected by the African swine fever epidemic, the "pig cycle" and the superposition of factors such as the ban on breeding in some areas, the number of pigs in the mainland in 2019 and the number of pigs slaughtered decreased to a large extent, according to the data of the Ministry of Agriculture and Rural Affairs, in 2019, the pig herd was 310.41 million heads, and 544.19 million heads were slaughtered. In 2021, the national pig inventory will be 449.22 million, a year-on-year increase of 10.51%; 671.28 million heads were slaughtered, a year-on-year increase of 27.37%. In 2022, as of the end of the first half of the year, China's pig inventory and slaughter scale were both 430.57 million heads.
-- Ranking of pig breeding enterprises slaughtered
From the perspective of pig slaughter, in 2021, China's 13 listed pig breeding companies, including Muyuan Co., Ltd., Zhengbang Technology, Wen's Co., Ltd., New Hope and Dabeinong, are in the top five, with 40.263 million pigs, 14.927 million heads, 13.217 million heads, 9.800 million heads and 4.308 million heads respectively.
From the perspective of the growth rate of pig slaughter, Muyuan shares, Dabeinong, Aonong Biotechnology, Superstar Agriculture and Animal Husbandry, and Luoniushan all increased by more than 100% year-on-year, with year-on-year increases of 122.3%, 132.8%, 141.1%, 192.1%, and 156.2% respectively.
-- Comparison of business performance of listed companies
From the perspective of operating income, in the first three quarters of 2022, among the listed companies in the mainland pig breeding industry, New Hope's operating income ranked first, with an operating income of 100.419 billion yuan; The operating income of Muyuan shares and Wen's shares followed with 80.774 billion yuan and 55.874 billion yuan respectively.
From the perspective of net profit, in the first three quarters of 2022, Muyuan shares, Tianbang Food, and Wen's shares are among the top three in the industry, with net profits of 1.825 billion yuan, 1.002 billion yuan, and 880 million yuan respectively.
Chen Jiezheng, a researcher of agricultural products at Galaxy Futures, believes that in the de-stocking structure, the reduction of multiplication is mainly in retail investors, and from the perspective of the speed of de-escalation, the decline from the beginning of 2023 to the end of the year has basically reached about 5%, and there is still a possibility of further decline in the inventory of fertile sows before and after the Spring Festival, and it is expected that the number of pigs slaughtered will decline after the third to fourth quarter of 2024, and the pig price may usher in a relatively considerable rise.
Guotai Junan released a research report saying that in 2023, pig prices will be sluggish, the industry will continue to reduce capacity, the direction of the cycle in 2024 will become clearer, and the direction of prosperity will be more important than the short-term price rhythm.
Prospective Economist APP Information Group
For more research and analysis of this industry, please refer to the "Market Prospect and Investment Strategic Planning Analysis Report of China's Pig Breeding Industry" by the Prospective Industry Research Institute.
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