The group pig company may go bankrupt in the second half of the year?

 　　In a typical cyclical industry, raising pigs is not an always profitable business
.
Q3R China Feed Industry Information Network-Based on feed, serving animal husbandry

　　On the evening of October 27th, Wen's Co.
, Ltd.
, the largest domestic farming company, released three quarterly reports
.
Data show that during the reporting period, its revenue decreased by 16% year-on-year to 46.
569 billion yuan, and its net profit also plummeted by 217.
71% to -9701 billion yuan
.
Among them, the third quarter revenue was 15.
939 billion yuan, down 18.
20% year-on-year, net profit fell 276.
21% year-on-year, and a huge loss of 7.
204 billion yuan.
This was the quarter with the largest loss since its listing in 2015
.
Q3R China Feed Industry Information Network-Based on feed, serving animal husbandry

　　It is not only Wen's shares that have turned from profit to loss.
The performance of the smaller Tang Renshen is also very worrying
.
On the evening of the same day, the latest financial report disclosed by Tang Renshen showed that in the first three quarters, the company achieved operating income of 16.
255 billion yuan, a year-on-year increase of 22.
5%, and a net loss of 398 million yuan, a year-on-year decrease of 156.
29%
.
Although the operating income in the third quarter increased slightly by 0.
88% to 5.
422 billion yuan, the net profit fell 573 million yuan
.
Q3R China Feed Industry Information Network-Based on feed, serving animal husbandry

　　"Compared with the same period last year, during the reporting period, the sales price of live pigs dropped sharply, combined with factors such as the increase in feed material prices and the impact of the epidemic, and the increase in the cost of pig breeding, resulting in losses in the pig industry.
.
.
" In fact, in the pork concept stocks Almost all of this sentence can be found in the original text of the third quarter performance forecast
.
Q3R China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Deep loss in the third quarterQ3R China Feed Industry Information Network-Based on feed, serving animal husbandry

　　2019 is the beginning of a new round of rising prices for live pigs.
Under the continuous influence of the African swine fever epidemic, the number of live pigs sold by Wen's shares dropped from 22.
29 million in 2018 to 18.
51 million.
However, the company is still relying on a growth rate of over 250%, and a net profit of nearly 14 billion yuan ranks first in the list of the most profitable A-share listed pig companies in 2019, with an average daily profit of about 38.
27 million yuan
.
This is also a report of the best "fineness" since its listing
.
Q3R China Feed Industry Information Network-Based on feed, serving animal husbandry

　　"Affected by the continuous decline in domestic live pig prices, the pig industry suffered a full loss in the third quarter, coupled with the continuous increase in the price of feed ingredients, the company's slaughter pigs included a large proportion of purchased seedlings for fattening pigs, disposal of low-efficiency breeding pigs and other factors.
With high pig raising costs, the company's pig breeding business experienced deep losses in the first three quarters
.
"Q3R China Feed Industry Information Network-Based on feed, serving animal husbandry

　　At present, Wen's, Muyuan, Zhengbang and New Hope are the four largest domestic pig raising companies
.
In mid-October, Tianbang, which is mainly engaged in the production and sales of feed, pigs, veterinary drugs and pesticides, is expected to lose 2.
7 billion to 2.
9 billion yuan in the first three quarters, and make a profit of 2.
824 billion yuan in the same period last year
.
Among them, the third quarter loss was 2.
05 billion yuan to 2.
25 billion yuan; New Hope also estimated a loss of 5.
995 billion yuan to 6.
395 billion yuan in the first three quarters, of which the pre-loss of 2.
58 billion yuan to 2.
98 billion yuan in the third quarter
.
Q3R China Feed Industry Information Network-Based on feed, serving animal husbandry

　　"Pig in Maotai" Muyuan shares also failed to take care of it alone
.
The financial report showed that its net profit attributable to the first three quarters fell 58.
53% year-on-year, from 20.
988 billion yuan in the same period in 2020 to 8.
704 billion yuan, of which a loss of 822 million yuan in the third quarter was its first single-quarter loss in the past three years
.
Q3R China Feed Industry Information Network-Based on feed, serving animal husbandry

　　When will it rebound?Q3R China Feed Industry Information Network-Based on feed, serving animal husbandry

　　So, is there a risk of continued downside in pork prices?Q3R China Feed Industry Information Network-Based on feed, serving animal husbandry

　　In fact, some industry insiders said in an interview with a reporter from the International Finance News that the expansion plans of various companies can be described as "fierce", and the expansion speed has far exceeded the growth rate of the industry.
The continuous expansion of enterprises will accelerate the downturn of the cycle
.
I think the current planning of enterprises should not be too radical.
They should arrange and adjust production plans in a timely and rational manner.
Now is the time for the industry to cool down instead of encouraging everyone to expand wildly.
In the downturn of the cycle, companies will face a substantial reduction in profits or a break in the capital chain
.
"Q3R China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Half a month ago, Guosen Securities predicted in its research report that from the current average slaughter weight and the subsequent increase in fat pig slaughter, it is difficult for pig prices to rebound significantly in the fourth quarter, and pressure on pig prices after the Spring Festival may be expected.
Even bigger, "In the next six months, large-scale group breeding companies may experience extremely tight cash flow or bankruptcy cases; cyclical fluctuations still depend on retail investors rather than group companies.
The continued low price of pigs is conducive to an early reversal of the cycle
.
"Q3R China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Pork prices rebound, the industry says it’s hard to say that the trend reversesQ3R China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Pork reserves are an important policy tool for ensuring supply and price stability in the live pig and pork markets
.
Since July this year, in order to cope with the rapid decline in the prices of live pigs and pork, the National Development and Reform Commission and relevant departments have carried out the central frozen pork reserve procurement and storage work, and guided all localities to carry out synchronously in order to stabilize market expectations
.
Q3R China Feed Industry Information Network-Based on feed, serving animal husbandry

　　On October 10th, the Ministry of Commerce, together with the National Development and Reform Commission, the Ministry of Finance and other departments, purchased and stored 30,000 tons of central reserve pork, and deployed them in 12 provinces
.
On October 28, the relevant person in charge of the Beijing Municipal Development and Reform Commission revealed that it planned to launch the second round of temporary reserve purchasing and storage in the near future
.
Chen Mengjie, chief strategy analyst of the Yuekai Securities Research Institute, told the "Securities Daily" reporter that the short-term purchasing and storage may be conducive to the stabilization and recovery of pig prices, but it is difficult to bring the inflection point of the pig cycle.
The change in the supply and demand structure is the decisive factor for pork prices
.
Judging from the current situation, the effect of purchasing and storage has appeared
.
According to data from the Ministry of Agriculture and Rural Affairs, since mid-October, the average pork price in the national agricultural product wholesale market has rebounded in stages, from 17.
53 yuan/kg on October 12 to 22.
53 yuan/kg on October 29, an increase of 28.
52%
.
Ms.
Li, who lives in Harbin, told reporters, “Previously, the special price of pork in supermarkets was about 5 to 7 yuan per catty, but the current price has risen to 13 yuan per catty.
Overall, the price is still not high
.
”Q3R China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Hualian Futures Researcher Jiang Qin told the Securities Daily reporter that in recent days, many places have started to store cured meats and enemas for the winter, and slaughter companies have started to increase slightly, and market demand has increased significantly
.
Although there is a seasonal trend in consumption, the fourth quarter still shows a situation where supply exceeds demand.
It is expected that there will be a high probability of maintaining an oversupply pattern in the first half of next year.
After 2022, there may be a second bottoming of pork prices
.
Shen Xinfeng, assistant general manager of the Northeast Securities Research Institute, said in an interview with a reporter from the Securities Daily that, combined with the clearing laws of past pig cycles, it is expected that the downward phase of this round of super pig cycle may continue for more than half a year
.
From the perspective of supply and demand, because pig companies have been profitable during the upward phase of the pig cycle, the capital safety pad is thick, and the ability to resist falls is relatively strong.
The cost pressure is not smoothly transmitted to the reproductive sows, and the current reproductive sows are eliminated.
Most of them are low-efficiency three-way multiplication, which in turn leads to passivation of the transmission of pig prices.
Therefore, although the number of reproductive sows has turned negative from July, it is still too early to say that the trend of pig prices is reversed.

.
Q3R China Feed Industry Information Network-Based on feed, serving animal husbandry