The response is, "Reduce internal competition and avoid poaching each other"! Four major pig farming giants swipe screen revenue | shares | pig farming
In order to reduce internal competition and promote civilized development, I propose: no poaching, no dismantling. If there is a breach of contract, double the countermeasures. Recently, pig farming giant Muyuan Group held an open day event in Nanyang, Henan. A picture of the "non poaching convention" has spread in the industry and sparked heated discussions.
Muyuan Group announced that it has jointly initiated initiatives with Wen, twins, and Zhengda to respect industry order, build commercial civilization, and sign a non poaching agreement. Muyuan Group stated that in the next step, it is expected to dismantle the fence, cooperate in production and research, collaborate internally and externally, truly achieve openness and sharing, jointly promote industry progress, and build a commercial civilization.
Related personnel: The initiative is genuine
According to media verification, personnel from Wen Group stated that the joint initiative was genuine, and the content of the images circulating online was also genuine. However, the specific background of the initiative is not yet clear. According to another media verification report, relevant personnel from Muyuan Group stated that this move is mainly an initiative to the industry, respect industry order, and build commercial civilization.
According to previous media reports, a participant revealed that as the largest pig farming enterprise, Muyuan was recruited by other companies from their teams to recruit many professional and technical talents, which led to the initiation of this convention.
▲ Muyuan Group official account
Public information shows that Muyuan was founded in 1992 and has been focusing on pig farming for 30 years. It has now formed a pork industry chain that integrates feed processing, pig breeding, pig farming, and slaughter processing. In 2022, it produced 61.2 million pigs, reaching a new high in output and becoming the world's largest pig farming enterprise.
On June 20th, the 18th Pig Festival Co creation and Sharing Forum of Muyuan Group's Open Day mainly discussed production management, feed nutrition, and enterprise management. Qin Yinglin, Chairman of Muyuan Group, gave a keynote report on "Future Trends in Feed Nutrition". He mentioned that in the cost space of 600 yuan/head in pig production, there is 37 yuan/head in the feed process, mainly achieved by reducing feed waste and improving feed utilization efficiency.
Pig companies generally suffered losses in the first quarter
From the perspective of revenue from listed pig companies, in the first quarter of this year, Chinese pig companies generally suffered losses, with a total net profit loss of 5.6 billion yuan for the three pig companies, Muyuan Group, Wenshi Group, and New Hope; In April, the sales data of pig companies continued to be sluggish, with revenue mostly decreasing month on month; In May, Muyuan Group, Tianbang Food, Shennong Group, Jinxinnong, and Jingji Zhinong recorded varying degrees of growth in revenue compared to the previous month, while New Hope, Wenshi Group, Dabei Agricultural Holdings, Dongrui Group, and Luoniushan saw a decrease in revenue compared to the previous month.
In addition, the overall sales price of live pigs has continued to decline. In May, the sales prices of live pigs by listed pig companies were mainly declining. The prices of live pigs by Jinxinnong, Tianbang Food, and Dongrui Group slightly increased compared to the previous month. The overall prices of live pigs by 11 pig companies ranged from 13.7 yuan/kg to 16.43 yuan/kg.
According to the May pig sales data released by listed pig companies, Muyuan Group ranked first in the industry with a pig sales volume of 5.764 million in May, while Wenshi Group and New Hope Group had a monthly pig sales volume of over one million, with 2.0936 million and 1.4425 million respectively.
Compared to April, there has been a divergence in the pace of Chinese listed pig companies going public. Among them, Tianbang Food and Jinxinnong had the highest month on month growth in their sales volume, reaching 44.75% and 35.96% respectively; Muyuan Group, Aonong Biotechnology, Shennong Group, Jingji Zhinong, and Luoniushan have also achieved varying degrees of increase in their listing volume compared to the previous month. Wen's shares, New Hope, Dabei Nong, and Dongrui shares recorded a month on month decline in pig sales.
Industry insiders have previously pointed out that due to the unique nature of pig farming, supply and demand are prone to changes, resulting in significant price fluctuations, leading to risks such as swine fever and other unexpected events, as well as fluctuations in feed and pork prices. These two major risks can easily lead to unstable income for pig farmers. With the gradual deepening of the scale of pig farming, it is extremely difficult for breeding enterprises to reproduce the situation of long-term rich profits, especially with small profits becoming the norm.
China Post Securities believes that the pig industry suffered significant losses in the first half of 2022, while it made significant profits in the second half, achieving a full year turnaround. However, in the first quarter of 2023, the industry experienced another significant loss. The industry is under significant financial pressure and is embarking on a new cycle of capacity reduction. From an investment perspective, the current pig farming sector has a bottoming out trend and high upward elasticity. On the one hand, the average market value of major listed companies is already at a historical low; On the other hand, the greater the reduction in production capacity, the higher the height of cycle reversal in the later stage. Leading large enterprises have high safety margins and prominent cost advantages, while small and high growth companies have greater flexibility.
Guojin Securities believes that against the backdrop of improving average production efficiency in the industry, the supply of pork in 2023 may exceed that of 2022, and the overall average price performance in 2023 may be lower than that of 2022. Therefore, reducing production capacity is likely to become the main theme of the pig farming industry this year. At present, the stock price of the pig farming sector is in the bottom range, with a prominent winning rate and good allocation opportunities. Suggest selecting targets from multiple dimensions such as the cost level of the enterprise, the elasticity of sales volume growth, the degree of sales volume realization, and valuation situation.
