Text / Yangcheng Evening News reporter Ding Ling

　　Under the "pig cycle", the pig breeding sector continued to suffer deep losses, but driven by the rise in the price of raw materials, domestic feed prices hit a record high, which made Haid Group (002311), which focuses on raising pigs and selling feed on the other, very "tangled".

　　Two pieces of business, two days of ice and fire

　　On April 12, Haid Group released its 2021 annual report and 2022 first quarter report.

A reporter from the Yangcheng Evening News found that in 2021, Haid Group will be in a state of "increasing revenue without increasing profits".

Among them, the operating income of the pig breeding business achieved a year-on-year increase of 25.08%, but the loss was nearly 900 million yuan, a year-on-year decline of 238.09%, which dragged down the company's overall profitability; while excluding other businesses of pig breeding, it achieved both operating income and net profit.

　　According to public information, the main businesses of Haid Group include animal seedlings, feed, animal protection, and pig breeding.

Among them, feed sales are the most important business, accounting for more than 80% of the company's total revenue; breeding business accounts for about 10% of the company's total revenue.

　　The annual report shows that in 2021, the company will achieve operating income of 85.999 billion yuan, a year-on-year increase of 42.56%; the net profit attributable to shareholders of the listed company will be 1.596 billion yuan, a year-on-year decrease of 36.73%; of which the pig breeding sector will achieve operating income of about 4.642 billion yuan, a year-on-year increase. An increase of 25.08%; the pig breeding business achieved a net profit of -896 million yuan attributable to shareholders of the listed company, a year-on-year decrease of 238.09%; excluding other businesses of pig breeding, the company achieved an operating income of 81.357 billion yuan, a year-on-year increase of 43.71%; realized attributable to the listing The net profit of the company's shareholders was 2.492 billion yuan, a year-on-year increase of 32.97%.

　　The pig breeding business and the feed business can be described as "ice and fire".

　　In 2021, the prices of poultry meat and pork will continue to be sluggish. Livestock and poultry farming will suffer from the decline in the price of terminal meat products and the rising cost of raw materials, resulting in substantial losses in farming.

　　In terms of pig breeding business, Haid Group sold about 2 million pigs in the whole year, and achieved an operating income of about 4.642 billion yuan, a year-on-year increase of 25.08%.

During the reporting period, affected by the sharp fluctuations in the prices of piglets and meat pigs, the pig breeding business suffered an annual loss of RMB 896 million.

　　Let's look at the feed business. The main raw materials of Haid Group's feed business are corn, soybean meal, etc. The cost of materials in this business accounts for more than 95% of the total cost all year round. The price of bulk agricultural products directly affects the company's operating costs.

　　Haid Group said that the price of corn will continue to rise to a high level in 2020 and further increase; the price of soybean meal has risen to a relatively high level in history compared with the beginning of the year, and oscillated at a relatively high level throughout the year.

Driven by the rising prices of raw grains, domestic feed prices hit a record high.

　　The annual report data shows that Haid Group's feed sales business is booming, with annual revenue of 69.826 billion yuan, a year-on-year increase of 43.19%, and a gross profit margin of 9.1%.

　　Still in deep loss cycle in the first quarter

　　It is worth mentioning that in the first quarter of this year, the situation of the pig breeding business has not improved.

According to the first quarter report of this year, Haid Group achieved revenue of 19.953 billion yuan in the first quarter of this year, a year-on-year increase of 26.98%; net profit attributable to shareholders of listed companies was 201 million yuan, a year-on-year decrease of 71.62%.

Among them, the operating income of the pig breeding sector was 1.374 billion yuan, a year-on-year decrease of 1.56%, and the number of live pig breeding was about 830,000 heads. It was -302 million yuan, down 236.07% year-on-year.

　　Haid Group also stated that pig farming has been in a period of deep loss in the first quarter of this year.

　　Only with a rise in pork prices can Haid Group's breeding business be able to turn losses around.

However, institutions have given different views on the follow-up pork price trend: Guosen Securities’ research report on March 14 believed that “this round of pig cycle has a long duration and a particularly large amplitude, and the price of live pigs has not yet bottomed out”; Pacific Securities in April The research report on the 4th believes that "the reversal of the pig cycle is imminent, and the rating for the pig industry is maintained."

　　However, the inflection point of pig breeding has not yet come, and the stock price of Haid Group has also fallen endlessly.

Affected by the performance, the stock price of Haid Group has fluctuated downward since the second half of last year.

This year, the company's performance continues to be under pressure, and factors such as the overall decline in the broader market are superimposed. As of the close of trading on April 13, the stock price has fallen by 20.67% year-to-date.

　　News link

　　Under the huge loss, the head pig enterprises actively carry out self-rescue

　　At present, leading pig companies including Wen's Shares (300498), New Hope (000876), Muyuan Shares (002714), and Zhengbang Technology (002157) have not disclosed their 2021 annual reports and 2022 first quarter reports, but according to previous announcements According to the 2021 annual performance forecast, the company's performance is under obvious pressure under the "pig cycle", and the operating pressure is further increased.

　　The performance forecast shows that the net loss of New Hope in 2021 will be in the range of 8.6 billion to 9.6 billion yuan, a year-on-year decrease of 273.94%-294.17%. The company is the main listed entity of New Hope Group in the agricultural sector.

The main reason for the loss was the substantial loss in the pig breeding business.

In 2021, the price of live pigs will drop significantly compared with the same period of last year (the average sales price of commercial pigs will drop by about 42% year-on-year), the price of feed raw materials will continue to rise, and the cost of live pig breeding will increase significantly year-on-year.

　　In 2021, Zhengbang Technology is expected to lose 18.2 billion to 19.7 billion yuan, turning from profit to loss.

In this regard, Zhengbang Technology said that the main reason for the change in performance was that during the reporting period, the company sold 14.9267 million live pigs, a year-on-year increase of 56.14%.

Due to the decline in the domestic live pig market price, the company's average sales price per head was 16.6 yuan/kg, a year-on-year decrease of 16.1 yuan/kg, and the single head income fell by 1,653 yuan. The increase in sales and the decrease in sales price affected the profit of 8.873 billion yuan.

The company has a single industry, and its profit contribution is mainly from the pig breeding business. Compared with diversified companies, it is more affected by the pig cycle.

It is worth mentioning that Wen's shares, which raise pigs and chickens, also suffered a substantial loss, with a pre-loss of 13.337 billion yuan.

　　Under the pressure of performance, the top pig companies have launched self-help.

Wen's shares disclosed that the cost of pig breeding has decreased. The comprehensive cost in January was less than 9 yuan/catties, which was in line with the previous target.

　　Zhengbang Technology chose to sell its feed business in the southwest region to withdraw 2 billion to 2.5 billion yuan of funds.

According to the announcement, the pig breeding business has become the core business.

However, affected by the decline in the average selling price of live pigs, the elimination of low-efficiency sows, and the removal of low-performing production capacity, the company has also incurred large losses under the strategic adjustment and reform in addition to the normal operating losses.

We will continue to deepen pig breeding, strengthen pig breeding, fattening technology and process control to ensure normal production and operation in extreme environments.

　　New Hope has also launched a new round of fixed increase of no more than 4.5 billion yuan to supplement cash flow.

In addition, cost adjustments were also made in the four major areas of expenses, dead scouring, feed, and seedlings.

(Ding Ling)