① Wen's Co., Ltd. achieved a net loss of 1,236 million yuan to the mother in Q1; ② The company made progress in cost reduction and efficiency this year. The comprehensive cost of pork pig breeding was reduced to about 7.4 yuan/kg in March, and single-headed pork pigs basically achieved break-even; ③ the company set a target sales target of 30 million to 33 million heads of pork this year.
Financial Services Association, April 28 (Reporter Liu Jian) Affected by low pig prices throughout last year, Wen's Co., Ltd. (300498.SZ) recorded a huge loss of nearly 6.4 billion yuan last year, but after entering the first quarter of this year, thanks to the company's progress in reducing costs and increasing efficiency, the company reduced losses year-on-year in Q1.
Furthermore, the company's comprehensive pork pig breeding cost was reduced to about 7.4 yuan/kg in March, and single-headed pork pigs basically achieved a break-even balance.
Today, Wen's Co., Ltd. released its 2023 annual report. During the reporting period, the company achieved total operating income of 89.902 billion yuan, an increase of 7.40% over the previous year; net loss to mother was 6.39 billion yuan, and profit for the same period last year was 5.289 billion yuan, a year-on-year profit and loss.
Specifically, during the reporting period, the number of pork pigs and broilers sold by the company reached record highs. A total of 26.262,200 heads of pork were sold, an increase of 46.65% over the previous year; sales of broilers (including hairy chicken, fresh products and cooked food) were 1,183 million, an increase of 9.51% over the previous year.
A Financial Services News reporter noticed that in the past few years, the company's pork breeding target has been achieved quite a bit. The 2022 target is 18 million heads, and 17.91 million heads will actually be sold; the 2023 target is 26 million heads, and 26.26 million heads will actually be sold. Looking ahead to this year, the company previously set a sales target of 30 million to 33 million pigs, an increase of 4 to 7 million heads over the previous year.
Behind the increase in sales, the double downturn in pork and chicken prices led to huge losses for the company last year. According to Choice data monitoring, since December 2022, pig prices have entered a downward channel and remained low throughout the year. They only showed a phased rebound in the third quarter of last year, and continued to be weak after entering the first quarter of this year. In its financial report, Wen's Co., Ltd. also stated, “Since the price drop for hairy pigs and chicken was greater than the reduction in costs, the company's pig breeding business profits ultimately experienced deep losses; the profit of the chicken farming business declined year on year, and only marginal profit was achieved.”
In fact, behind the 14 listed pig companies recorded a total loss of over 30 billion yuan last year, related companies have stepped up efforts to reduce costs and increase efficiency to “save themselves,” and Wen's shares are no exception. According to public information, in the first quarter of 2024, the company's comprehensive pork breeding cost fell to about 7.6 yuan/kg, down about 0.5 yuan/kg from quarter to quarter. Among them, the comprehensive cost of pig breeding in March was reduced to about 7.4 yuan/kg, and the monthly decrease was about 0.4 yuan/kg. According to the average sales price of 14.73 yuan/kg in the company's March sales briefing, the company basically achieved profit and loss balance in March. Of the company's 16 regional pig breeding units, 9 have already achieved profit.
The company's cost reduction and efficiency results have also been reflected in financial reports. According to the 2024 first quarter report released by the company on the same day, the company achieved total operating income of 21,842 billion yuan, an increase of 9.37% over the previous year; net loss to mother was 1,236 billion yuan, a loss of 2,749 billion yuan in the same period last year. Last year's Q4 loss was 1.86 billion yuan, a year-on-year decrease.
It is worth mentioning that although it recorded losses last year, the company is still “proud”. On the same day, the company announced a profit distribution plan for 2023. It plans to distribute cash of 1 yuan (tax included) to all shareholders for every 10 shares, for a total of 662 million yuan (tax included).
Looking ahead to the future market, the supply and demand relationship in the market has improved rapidly since March, and pig prices have rebounded. In an interview with reporters, some industry insiders said, “The supply and demand situation will gradually improve in the second half of this year, and relevant farmers are expected to achieve marginal profits to small profits.”