Financial Services Association, January 26 (Reporters Liu Jian and Wang Ping An) The restructuring, change of command, and contraction of the business front is a true picture of the full year of *ST Zhengbang (002157.SZ) last year. With the Lin family's exit, Bao Hongxing officially took over. The pressure on the company's large debt was lifted and net assets were corrected. The ups and downs seemed to have finally ushered in the dawn.

This evening, *ST Zhengbang released its 2023 annual results forecast. It is estimated that net profit attributable to shareholders of listed companies in 2023 will be 8 billion yuan to 10 billion yuan, turning a year-on-year loss into a profit; net profit after deducting non-recurring profit and loss will be -7 billion yuan to -5 billion yuan, reducing year-on-year losses, while net assets have been corrected.

A Financial Services Association reporter noticed that the company achieved a sharp increase in performance during the reporting period, turning losses into profits year over year, but earnings mainly came from restructuring earnings. According to the results of the previous court ruling, the total amount of claims adjudicated was 26.992 billion yuan, and the restructuring proceeds from the implementation of the company's equity settlement are estimated to be about 17.5 billion yuan to 18.5 billion yuan. The above restructuring proceeds are included in non-recurring profit and loss.

In fact, judging from the main business, the pig market is sluggish, and the company's performance is still under pressure. However, due to reduced production capacity, the company's revenue declined while reducing losses. During the reporting period, the company achieved revenue of 6-7 billion yuan, compared to 14.415 billion yuan in the same period last year. The company's net loss after deduction was 5 to 7 billion yuan, and a net loss of 11.543 billion yuan for the same period last year. The company also confessed, “The pig business lost 3 billion yuan to 4 billion yuan in net profit during the reporting period due to continued low pig market prices.”

The sales briefing also shows that the company's main business line has shrunk. The company sold 5.478,500 pigs in 2023, a year-on-year decrease of 35.14%.

Looking ahead to the future market, as net assets rectify, how to get *ST Zhengbang's performance back on track has become an important goal in the future. Earlier, the restructuring plan also proposed the business goal of “striving to reduce operating losses in the first year after completion of the restructuring and turn losses into profits in the second year”. In fact, various related businesses are currently advancing at an accelerated pace to achieve this goal. The company previously announced that it plans to sign a “Framework Agreement” with the related party Twin Group and its subsidiaries, Jiangxi Twin Investment and its subsidiary, Twin Foods and its subsidiary companies, and plans to cooperate in businesses such as the purchase and sale of feed, purchase of raw materials, sale of pigs, and purchase and sale of animal protection products.

“Twins have strong strength. They are the top domestic pig companies, and their breeding costs (advantages) are currently at the forefront of the industry, and they are expected to return to the top of the domestic market after joining forces. Furthermore, if the market reverses in the second half of the year, it will also bring certain benefits to Zhengbang's performance inflection point.” Some industry insiders pointed out.

Furthermore, the Ministry of Agriculture and Rural Affairs recently pointed out that the number of breeding sows in the country at the end of December 2023 was 41.42 million, a decrease of about 2.5 million heads. Starting in October 2023, the number of newborn piglets in the country has declined year on year. As pig production capacity gradually returns to a reasonable level, the pig market situation in the second quarter of 2024 is expected to be better than the same period last year.