① Xiaoming Co., Ltd., the first stock of laying hens, was asked by investors whether to supply eggs to Nvidia. The company responded that it did not sell eggs directly to Nvidia and did not reach a long-term agreement to supply eggs; ② behind the questioning or related to the stock price trend of Xiaoming Co., Ltd., the company has been rising for 7 consecutive trading days; ③ There has been no significant improvement in the fundamentals of the egg industry, and egg profits have changed again recently.
Financial Services Association, Feb. 26 (Reporter Zhang Chenjing) Recently, Nvidia's market capitalization has reached a record high, and the popularity of related A-share concept stocks has increased. Nearly 70 A-share companies in Shanghai and Shenzhen have been asked if they are linked to Nvidia. Even the “first laying hen stock” Xiaoming Co., Ltd. (300967.SZ) was asked by investors whether they supplied eggs to Nvidia.
A CIFA reporter learned from an interview with the industry that behind “being hit by porcelain,” there has actually been no significant improvement in the fundamentals of the industry. Since late February, after a lapse of 7 months, egg profits have once again changed from profit to loss.
Recently, an investor asked Xiaoming Co., Ltd. whether the company's eggs are supplied to Nvidia? Has an agreement been reached with Nvidia for the long-term supply of eggs? In response, the company stated that it did not sell eggs directly to Nvidia, nor did it reach a long-term agreement with Nvidia to supply eggs.
The main products of Xiaoming Co., Ltd. are parent breeding chicks, commercial chicks and their by-products, and commercial chickens. In 2023, the forecast loss reached a record high of 126 million yuan to 162 million yuan due to falling gross profit and accruing asset impairment losses. Meanwhile, according to its monthly sales report for January, sales volume was 15.3797 million birds, down 17.87% year on year, and sales revenue was 447.06 million yuan, down 2.53% year on year.
The average price of eggs in 2023 is higher than in previous years, but the overall storage volume is still low. At the same time, due to high breeding costs, which reduce the profit margins of downstream laying hens, farmers mostly adopt extending the breeding cycle of laying hens to avoid short-term price risks, affect their willingness to fill the shelves, and curb the price of commercial chicks.
People in the laying hen breeding industry told the Financial Federation reporter that due to a combination of factors such as the increase in the share of domestic ancestral chickens, the expansion of production by breeding chicken companies, and the lag in profits from chicken seedlings compared to laying hen breeding, the laying hen breeding industry is relatively saturated, and they have been losing money most of this year.
In the secondary market, after hitting a new low of 6.62 yuan on February 8, Xiaoming shares have been rising for 7 consecutive trading days, closing at 9.58 yuan/share today.
After the Spring Festival, the decline in egg prices widened, and egg profits entered a loss range in late February. Huang Zixuan, an egg analyst at Zhuochuang News, told the Financial Federation reporter that in the fourth week of February 2024, the gross profit loss for a single catty of eggs was 0.11 yuan. After the last loss, egg prices dropped significantly around the Spring Festival, but feed costs were generally stable and did not relieve spending pressure. As a result, the profit of a single catty of eggs changed from profit to loss after the holiday season. There is an expectation that the stock of laying hens will rise in March. The supply of eggs is relatively loose, but market demand has increased month-on-month, the gap between supply and demand in the market has narrowed, and egg prices are likely to rise at a low level.