Interface News Reporter | Yin Jingfei
As an agricultural and animal husbandry giant with a market value of more than 100 billion yuan, Wen's shares (300498. SZ) disclosed its 2023 annual report and 2024 first quarter report on April 28. In 2023, when the aquaculture industry is cold, its performance will also encounter a cold winter. The company will lose nearly 6.4 billion yuan in 2023, turning into a loss year-on-year. However, with the recovery of the industry, its loss will narrow significantly in the first quarter of 2024.
In 2023, the breeding track will be cold
According to the announcement, Wen's revenue in 2023 will reach 89.902 billion yuan, a year-on-year increase of 7.40%, and the net profit loss will be 6.39 billion yuan, and the net profit attributable to the parent company in the same period last year will be 5.289 billion yuan.
The company's operating income in the first quarter of 2024 was 21.842 billion yuan, a year-on-year increase of 9.37%, and the net loss was 1.236 billion yuan, compared with a large loss of 2.749 billion yuan in the same period last year.
In 2023, the company will sell 1.183 billion broilers (including hairy chickens, fresh products and cooked food), a year-on-year increase of 9.51%, accounting for 9.1% of the total number of broilers (including white feather, yellow feather and small white feather broilers) slaughtered in the country, and 26.2622 million pigs (including hairy pigs and fresh products) will be sold, a year-on-year increase of 46.65%, accounting for 3.6% of the total number of pigs slaughtered in the country.
Behind this is a significant increase in the supply of agricultural and animal husbandry products in 2023.
According to data from the International Animal Husbandry Network, in 2023, 16.82 billion poultry will be slaughtered across the country, an increase of 690 million birds or 4.2% over the previous year, and poultry meat output will be 25.63 million tons, an increase of 1.2 million tons, an increase of 4.9%.
Pig slaughter continues to grow. According to the National Bureau of Statistics, 726.62 million pigs will be slaughtered in 2023, an increase of 26.68 million or 3.8% over the previous year, and pork production will be 57.94 million tons, an increase of 2.53 million tons or 4.6% over the previous year, the highest level since 2015.
Against the backdrop of insufficient consumption, the prices of agricultural and animal husbandry products have plummeted. To add insult to injury, affected by factors such as international environmental turmoil and the decline in raw material output, the price of feed raw materials has risen sharply in recent years, and the comprehensive cost of pig breeding has further increased significantly. According to the tracking data of Everbright Securities Research Institute, the spot prices of corn and soybean meal in 2023 will increase by 64% and 44% respectively compared with 2017.
Wen's shares said that the overall level of producer prices of agricultural products in the country decreased by 2.3% from the previous year. In terms of categories, the price of animal husbandry products decreased by 8.3 percent over the previous year, and the price of live pigs continued to run at a low level, and the price of live pigs decreased by 14.0 percent year-on-year.
From May 2023 onwards, meat and poultry prices began to fall sharply. According to the calculation of the price tracking data of yellow feather chickens and white feather chickens by Everbright Securities Research Institute, the average prices of yellow feather chickens in 2023 will be 14.50%, 13.86% and 14.55% lower than that in 2022, respectively, and the average price of white feather chickens will be 2.40% lower than that in 2022.
The breeding track is cold, and the listed companies in this track are not having a good time.
Pig Enterprise Muyuan Co., Ltd. (002714. SZ) in 2023, the company will achieve operating income of 110.861 billion yuan, a decrease of 11% from the same period of the previous year, and a net profit loss of 4.168 billion yuan, a year-on-year decrease of 128%.
Pig Enterprise New Wufeng (600975. SH) will achieve revenue of 5.632 billion yuan in 2023, an increase of 12.52% year-on-year, and a net profit loss attributable to the parent company of 1.203 billion yuan.
At the same time as pig enterprises are losing money, the performance of listed companies in broiler breeding will also be cold in 2023. Among the 8 listed companies in broiler breeding, 5 are in a loss-making state.
For example, Lihua shares (300761. SZ) will have an operating income of 15.354 billion yuan in 2023, a year-on-year increase of 6.28%, and a net profit loss attributable to the parent company of 437 million yuan due to the drag of the market conditions of its main products.
Minhe Co., Ltd. (002234. SZ) will have an operating income of about 2.074 billion yuan in 2023, an increase of 28.96% year-on-year, and a net profit loss attributable to shareholders of listed companies of about 386 million yuan.
The aquaculture industry will pick up in 2024
Will the days of agricultural and animal husbandry enterprises pick up in 2024?
In terms of industry, the supply and demand of the industry may improve in 2024, and the market price may be better than that of the previous year.
Market participants pointed out that from the calculation of the eggs laid by the parent breeders, to the breeding of commercial broilers, yellow feather broilers generally take 80 days to 120 days, white feather broilers generally need 63-69 days, so according to the end of the last year the parent breeder stock change trend can be roughly speculated the next year of commercial broiler slaughter trend. According to the statistics of the Poultry Branch of the China Animal Husbandry Association, the number of parent breeders of yellow feather chickens has continued to decline since 2020, and will drop to the lowest point in the past four years in 2023, with a year-on-year decrease of 6.96% in 2023. The number of parent breeders of yellow feather chickens continues to decline, and the supply of yellow feather broilers may decline. In addition, with the recovery of the mainland's economy and consumption in 2024, the supply and demand of yellow-feathered broilers may improve in 2024, and the market price may recover.
From the calculation of the pregnancy of the parent generation pigs, to the breeding of commercial pigs, the feeding process generally takes 9-10 months, and the change trend of the number of breeding sows from April of that year can roughly understand the change trend of the number of pigs slaughtered in the following year. According to the data released by the Ministry of Agriculture and Rural Affairs at the end of the period, the number of fertile sows will gradually decline from April 2023, and the number of fertile sows will decrease by 1.81% month-on-month and 6.87% year-on-year by January 2024, showing an accelerated downward trend, and it is expected that the overall supply of the pig industry will decline in 2024, and the market may gradually improve.
Pig Qi Luo Niu Mountain(000735. SZ) has also turned around in the first quarter of 2024.
In the first quarter of 2024, Luoniushan achieved operating income of 1.008 billion yuan, a year-on-year decrease of 27.35%. net profit attributable to shareholders of listed companies was 110 million yuan, a year-on-year increase of 128.81%. net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses was 129 million yuan, a year-on-year increase of 273.58%. However, Luo Niushan said in the announcement that one of the reasons for the profit was to recover part of the equity disposal funds of rural credit financial institutions and reverse the corresponding credit impairment losses, involving an amount of 64.45 million yuan.
Lihua's performance in the first quarter of 2024 has turned around.
On April 22, 2024, Lihua Co., Ltd. (300761. SZ) announced its results for the first quarter of 2024. The company achieved operating income of 3.662 billion yuan, a year-on-year increase of 7.34%, a net profit attributable to the parent company of 80.03 million yuan, a year-on-year turnaround, a net cash flow generated by operating activities of 218 million yuan, a year-on-year positive, and an asset-liability ratio of 43.93%, an increase of 3.15 percentage points year-on-year.