Event: the company released its semi-annual report for 2020, with operating income of 902 million (year-on-year-42.29%), net profit of 232 million (year-on-year-73.26%) and non-net profit of 234 million (year-on-year-73.04%).

In the second quarter, the company achieved revenue of 460 million (year-on-year-44.67%), net profit of 85.7705 million yuan (year-on-year-82.24%) and non-net profit of 84.5709 million yuan (year-on-year-82.44%).

The price of poultry chain fell sharply, and the performance was temporarily under pressure. In the first half of the year, the epidemic had an impact on white chicken consumption, the price of poultry chain rebounded after a deep fall, and the price of chicken seedlings once fell below 2 yuan per feather, and the company's profits were under pressure. The sales volume of 2020H1's commodity generation chicken seedlings is 1.6 billion yuan (compared with the same period last year), the average sales price is 3.22 yuan per feather (compared with the same period last year), the total cost is estimated to be about 2.0 yuan per feather, the profit per feather is about 1.2 yuan, and the profit contributed by the breeding business is estimated to be about 190 million. In the food sector, sales of chicken products were about 30,000 tons in the first half of the year, benefiting from lower purchasing costs of hairy chickens. Minhe Foods made a net profit of 23.06 million yuan, + 133% of the same period last year.

There has been a substantial increase in introduction, and the production capacity of the industry remains high. In 2019, the industry was highly prosperous, with 1.224 million sets of ancestral chickens updated throughout the year, + 64% year-on-year. A total of 473000 sets were introduced in China in the first half of 2020,-7% compared with the same period last year. Since last year, the increase in upstream production capacity has been gradually transmitted downwards. by the end of July, there were about 1.1 million sets of breeder chickens in the country, an increase of about 18% over the beginning of the year and about 37% over the same period last year. The association's parents kept about 15.7 million sets of breeder chickens in the same period as at the beginning of the year and the same period last year, and remained in a high range.

Risk hint: the price of chicken seedlings fluctuates violently, the risk of animal epidemic, and the price of raw materials rises.