Financial Associated Press, October 22 (Reporter Zhang Chenjing)Due to the high cost and risk of breeding, the terminal market demand of laying hens this year is lower than expected. Xiaoming shares (300967.SZ) lost 79.76 million yuan in the first three quarters. Industry analysts told the Financial Associated Press: "the proportion of domestic ancestral breeder chickens has increased, coupled with the expansion of large breeder enterprises, the egg breeder industry is relatively saturated, and profitability is relatively general in the past year."

Xiaoming shares released three quarterly reports today, losing money in a row in one quarter of the year, record losses in the first three quarters, and a net profit loss of 79.7647 million yuan in the first three quarters of 2023. In the first three quarters of 2023, the company realized operating income of 637 million yuan, an increase of 10.22 percent over the same period last year. In the third quarter of 2023, the net profit attributable to the owner of the parent company was 43.8427 million yuan, and operating income was 179 million yuan, down 3.84 percent from the same period last year.

It is worth mentioning that in addition to the decline in profitability, the company also made provision for asset impairment in the third quarter, including provision of 20.5443 million yuan for inventory price decline. The company's gross sales margin fell further, to 6.89% from 9.2% in the middle of this year.

Xiaoming shares said that based on the principle of prudence, the company conducted a comprehensive inventory of all kinds of assets within the scope of the consolidated statement as of September 30, 2023, and made a full analysis and evaluation, provision for impairment of assets that may occur impairment losses.

The company's main products are parent generation chicks, commercial generation chicks and their by-products, commercial generation chickens. The change of chicken seedling demand will be affected by the breeding profit of laying hens, and the supply is determined by the stock of breeding hens. Industry insiders told the Financial Associated Press that due to comprehensive reasons such as the increase in the proportion of domestic ancestral chickens, the expansion of production by breeder enterprises, and the lag of breeding profits compared with laying hens, the breeder industry is relatively saturated, and the profit situation this year is general, and it is losing money most of the time.

The overall stock of laying hens this year is lower than that of previous years, and the profits of laying hens are OK, but because of the high breeding cost, high risk and general enthusiasm for fencing, it has not been transferred to the upstream chicken seedling industry.

The above industry insiders said: "the laying hen breeding cycle is longer, normally can reach 15 months, especially now the breeding profit is OK, the breeding main body will also delay Amoy, the cycle will be further lengthened." This year's fencing situation is actually not much better than in previous years, mainly because the breeding cost and risk are higher, so it is very difficult for chicken seedling manufacturers to make a profit. "