① Driven by losses in the aquaculture business, Haida Group's revenue rose in 2023 and net profit declined; ② The company sold about 24.4 million tons of feed during the reporting period, an increase of about 13% over the previous year; ③ Looking ahead to 2024, the company is quite confident about the annual profit per ton of feed.
Financial Services Association, March 1 (Reporters Liu Jian and Wang Ping An) The pig market is sluggish, and losses on the downstream farming side are dragging down performance. Haida Group (002311.SZ), a leading domestic aquaculture feed company, experienced a certain decline in net profit while its main feed business achieved double-digit growth.
This evening, Haida Group released its 2023 annual performance report. During the reporting period, the company achieved total operating revenue of 116.141 billion yuan, an increase of 10.91% year on year; net profit attributable to shareholders of the parent company was 2,794 billion yuan, a decrease of 5.43% year on year.
(Image source: Screenshot of the company announcement)
Specifically, in terms of the main feed business, the company achieved annual feed sales of about 24.4 million tons (including sales of about 1.8 million tons within farming), an increase of about 13% over the previous year. Foreign feed sales volume was 22.6 million tons, an increase of 2.36 million tons over the previous year, and the market share further increased.
Behind the rapid growth of the main feed business, losses in the farming business dragged down the company's performance. In 2023, 726.62 million pigs were released nationwide, an increase of 3.8% over the previous year; pork production was 57.94 million tons, an increase of 4.6% over the previous year, which is the highest level since 2015. Judging from breeding earnings, pig prices have been low for a long time, with an average loss of 76 yuan in pig farming throughout the year.
Haida Group also confessed, “Due to losses in the farming business in 2023 (the farming business achieved good profits in the same period in 2022), net profit attributable to shareholders of listed companies is expected to be 2,794 billion yuan for the whole year, down 5.43% from the previous year.”
Looking ahead to 2024, the company seems quite confident about the profit outlook for a single ton of feed. At a recent investor conference, the company said, “Pig profits may be under pressure in the face of intense competition in the industry. This year, the company will accelerate the improvement of the product structure and will provide good support for pig food profits; we maintain confidence in the growth of specialty aquatic products. Their specialty aquatic products outside of China have maintained a high growth rate, which will have a great driving effect on the overall fishery product profit. The overall product structure will be further improved; if the price of ordinary water fish rises, aquatic products will be further improved compared to expectations. OK. On the other hand, as investment expenses are controlled and capacity utilization increases, there is room for manufacturing costs and other expenses to decrease.”
In fact, since September of last year, the prices of feed ingredients such as soybean meal and fishmeal have declined. Among them, soybean meal recently even fell to its lowest level in nearly three years, closing at around 3,200 yuan/ton. The gross margin of the feed industry is expected to improve this year, and the profitability of related enterprises is expected to increase.
Li Xinyi, a soybean meal analyst at the Agricultural Products Division of the Shanghai Steel Union, told the Financial Federation reporter, “Soybean meal prices rebounded slightly after the Spring Festival, due to the fact that downstream stocks just needed to be replenished after the holiday season, and the domestic supply and demand pattern has not improved. Currently, the domestic supply and demand pattern has not improved. Currently, the domestic supply of imported soybeans remains sufficient. Although domestic soybean meal stocks have been removed, the drop rate is relatively different from previous years, and spot prices are falling back.”
Furthermore, in addition to bringing benefits to the company's main business, the continued decline in feed raw materials is also expected to improve farming profits. Haida Group believes that “falling raw material prices will reduce farming costs and help improve the industry's farming profits.”