Editor's note: China's economy is off to a good start in 2024, with GDP growth exceeding expectations of 5.3% in the first quarter. As of April 30, in addition to the postponement of the disclosure of individual listed companies, 5,346 A-share companies have disclosed their first quarter reports for 2024, of which 4,054 have achieved profitability in the first quarter. Tuyere Finance selects this year's hot industries and sectors for analysis and interpretation, looks back at the first quarter, looks forward to the first half of the year, and grasps the trend of China's economic development in 2024.
Financial reporter Wang Hao
This year's No. 1 central document pointed out: "To promote Chinese-style modernization, we must unremittingly consolidate the foundation of agriculture and promote the comprehensive revitalization of the countryside." ”
Listed companies are the micro foundation for high-quality economic development and an important force in promoting agricultural modernization. Shandong's total agricultural output value ranks first in the country, with more than 10,000 agricultural product processing enterprises on the scale, and it is the only province with more than 10,000 in the country.
The financial reporter found that there are about 28 agriculture-related A-share listed companies in Shandong, distributed in agricultural and sideline food processing, seed industry, agrochemical, animal husbandry and aquaculture, agricultural machinery and other tracks, ranking first in the country. In the first quarter of this year, the operating income of 28 enterprises totaled 28.898 billion yuan, a year-on-year decrease of 296 million yuan, and the net profit attributable to the parent company was 2.051 billion yuan, an increase of 20 million yuan year-on-year. Among them, 22 companies have achieved a "good start".
In the modern agricultural scene, agricultural drones fly to prevent plant protection (Photo courtesy of Qingdao Municipal Bureau of Agriculture and Rural Affairs)
outstanding achievement
Nearly 8 percent of A-share agriculture-related enterprises have achieved a "good start"
Looking at the quarterly reports of 28 companies, it can be described as two days of ice and fire.
Let's start with the big picture. 22 companies achieved profitability, and nearly 8 percent of enterprises achieved a "good start". In addition, 12 companies saw their net profits decline and 16 companies rose. However, the total net profit of 28 companies was 2.051 billion yuan, a slight increase of 0.98% year-on-year. In addition, according to Find's public data, overall, the total net profit attributable to the parent company of 311 A-share Lu enterprises in the first quarter of this year was 45.595 billion yuan, an increase of 13.22% from 40.270 billion yuan in the first quarter of last year. That is to say, in the overall market of listed Lu enterprises, the performance growth of agricultural enterprises is significantly lower than the average value, and the sense of presence is low.
In addition, the earning capacity of agricultural-related enterprises also needs to be improved. The reporter combed and found that the operating income of 28 enterprises in the first quarter totaled 28.898 billion yuan, the highest fertilizer manufacturing enterprise Hualu Hengsheng was 7.978 billion yuan, and the lowest *ST Dongyang was only 67 million yuan, which was a huge difference. At the same time, zooming in to the whole year, in 2023, among the 28 companies, only Hualu Hengsheng, Longda Gourmet and Runfeng Co., Ltd. will have a revenue of more than 10 billion yuan, and only Hualu Hengsheng will have a net profit of more than 1 billion yuan, which will be 3.576 billion yuan. Longda Cuisine, which ranked second in terms of revenue, had a revenue of 13.318 billion yuan and a net profit attributable to the parent company of -1.538 billion yuan.
Let's look at the sub-industries. First of all, the agricultural and sideline food processing industry, this industry Shandong has a total of 12, is the province with the most A-share listed similar enterprises in all provinces of the country, and at the same time in all agriculture-related Lu shares are also the largest number, accounting for more than forty percent, the main processing products are also very rich, involving meat products, pet food, prefabricated dishes, condiments and many other subdivisions.
On the whole, 10 are profitable, 2 are loss-making, and the fundamentals are relatively stable. Among them, Chunxue Food, which is engaged in the research and development, production, processing and sales of white feather chicken and chicken food, was slightly unexpected, and its net profit decreased from 8.4301 million yuan in the same period last year to -5.9753 million yuan, a year-on-year decrease of 170.88%, which continued the downward trend in 2023 and further expanded. As for the reasons for the decline in performance, the company said that it was mainly affected by the supply and demand relationship in the first quarter, the sluggish consumption and the long-term low pork prices, the sales price of fresh chicken products decreased significantly year-on-year, and the management expenses increased year-on-year.
In fact, in recent years, the aquaculture industry has continued to slump, and it has been a problem that enterprises in the industrial chain of Shandong, a major breeding province, must face. Not only Chunxue Food, but also Delisi, a meat product processing company, and Bunge Technology, a pig feed R&D, production and sales company, also experienced a decline in performance in the first quarter, with a decrease of 39.45% and 13.09% respectively. In terms of the breeding sector, Minhe shares, Xiantan shares, Yisheng shares and other three old Lu stocks in the field of high-grade chicken breeding, the performance also declined collectively, and the net profit in the first quarter fell by 161.39%, 92.37% and 65.16% respectively.
bright spot
Traditional industries rely on R&D and innovation to "counterattack" pet food
The reporter noticed that in the past three years, from 4 in 2021, to 3 in 2022, and then to only 1 in 2023, the number of listed agriculture-related enterprises in Shandong has shown a decreasing state. In fact, the problems faced by listed agriculture-related enterprises are also the epitome of the development of the traditional agricultural industry in the mainland after entering a new stage of high-quality development driven by new quality productivity. With the continuous advancement of agricultural modernization, it has become an inevitable trend for traditional agriculture-related enterprises to seek new momentum for development.
For example, in the face of the unfavorable factors of large losses in the traditional sector business due to the continuous decline in pig sales and pork market prices, Longda Gourmet achieved a rebound in the first quarter after experiencing a decline in performance last year. Its operating income in the first quarter was 2.523 billion yuan, although it decreased by 27.43% over the same period last year, the net profit attributable to the parent company reached 30.35 million yuan, a year-on-year increase of 43.24%, and the profitability level increased significantly.
Opening up a new track of the industry with research and development has become the key to the "counterattack" of Longda cuisine. The reporter noted that although the net profit of the enterprise will decline sharply in 2023, the R&D investment will increase instead of decreasing, reaching 9.6177 million yuan, the highest in the past three years. The company said that in 2024, it will continue to promote the "one body, two wings" strategy with food as the main body and breeding and slaughtering as the two wings. Among them, the food sector will be the most important development direction of the company, which will integrate its own R&D advantages, take the initiative to develop new products, and continue to cultivate growth momentum according to industry development trends and market opportunities. For example, for large customers, the company will have 10-20 new products being tested every week.
Another highlight is the pets. In 2023, the only listed agriculture-related enterprise in the A-share market, Ganbao Pet, comes from this track, and the company is mainly engaged in the research and development, production and sales of pet food. Pet food, that is, pet feed, obviously has stronger new consumption attributes than feed in traditional poultry breeding scenarios such as pigs, cattle, sheep and chickens. According to the "2023 China Pet Industry White Paper", the scale of the mainland urban pet (dog and cat) consumer market will reach 279.3 billion yuan in 2023. The compound growth rate from 2012 to 2023 is 21.2%. This also means that pet food has a stronger growth driver.
At the level of listed companies, there are currently three pet-related listed companies in Shandong and Zhejiang. Among them, in the pet food track, Shandong is in a leading position, with three listed companies: Zhongpet Shares, Ganbao Pets, and Luce Shares. It is worth noting that the net profit attributable to the parent company of these three companies in the first quarter all increased, totaling 219 million yuan, an increase of 92.11% over the same period last year, far exceeding the average level of A-share Shandong enterprises and agriculture-related enterprises.
future
The integration of policy elements empowers the emerging agricultural industry to accelerate its rise
The mainland is a big agricultural country, but it is not yet an agricultural power, and there is still a considerable gap between the level of agricultural modernization and that of developed countries. Specific to Shandong, there are more than 10,000 agricultural product processing enterprises on the scale, although compared with all parts of the country, Shandong currently has a lot of listed agriculture-related enterprises, but the space is still huge. At the same time, with the wide application of molecular breeding, digital agriculture and other technologies, traditional agriculture has ushered in an unprecedented new outlet.
During this May Day holiday, Zhu Meinan, general manager of Qingdao Yigrain Millet Agricultural Technology Co., Ltd., ran in the field, and worked with the drone pilot team to carry out plant protection flight defense operations, and at the same time supervised the quality of the operation through the company's self-developed big data cloud platform to ensure the healthy growth of wheat in the critical period of yield formation. "Compared with the traditional manual spraying mode, drone operation has greatly improved the operation efficiency, and the business volume and operation scale of our enterprise are also increasing. He told reporters that the use of agricultural drones for plant protection in farmland is now a "common thing", and it is moving towards diversified application scenarios such as lifting seedlings, fruits, building materials, and photovoltaic panels. This year, Shandong Province has also launched a new plant protection UAV operation standard method, to further standardize the operation, with the advancement of standards, the requirements for UAVs and pilots will continue to increase, which is like them for science and technology enterprises, innovation has a more perfect policy driven, I believe will usher in a better development space.
Some analysts believe that with the joint issuance of the Ministry of Industry and Information Technology and other four departments, the first year of low-altitude economic and industrial development will be opened, and the low-altitude field of agriculture is promising. In the field of agriculture, low-altitude drones and other technologies can be used for farmland irrigation, plant protection spraying and other operations, and can also be applied to resource monitoring scenarios such as forest fire prevention and environmental monitoring. There are many application scenarios of agricultural low-altitude economy, and the market space is broad.
In addition, aiming at the "seed industry chip", a large number of seed industry enterprises with high technology content are accelerating their growth through the integration and empowerment of policy elements. In Qingdao, we will strengthen direct financial incentives and subsidies. Establish a reserve of high-quality seed industry enterprises in Qingdao including 83 enterprises, select leading enterprises, advantageous enterprises and characteristic enterprises from them, build a seed industry enterprise formation, classify policies, and accurately support excellence. Innovative financial equity investment. It is the first in the country to create a seed industry "appropriation to investment" project, set up a financial equity investment fund in the field of seed industry "seed gold", with an initial investment of 30 million yuan to support the scientific and technological innovation of Qingdao's advantageous seed industry enterprises, driving social investment of 700 million yuan, and the total valuation scale of the invested enterprises reached 16 billion yuan.