Several industry insiders told Caixin reporters in an interview that the average price of live pigs in the second half of the year may remain in the range of 17 yuan to 19 yuan per kg, and the overall market outlook is optimistic. Rough estimates by Caixin reporters indicate that listed pig companies will achieve overall profitability this year, with Muyuan Foods Co., Ltd. ("Pig Grass") expected to achieve a profit of 17.7 billion yuan.
Caixin reporters Liu Jian and Wang Ping'an reported on June 5 that pig prices have recently skyrocketed, with some regions having broken through the 20 yuan per kg mark and the breeding side entering into a full-profit mode. Caixin reporters have roughly estimated the production targets and costs of various listed pig companies, and the profitability of all pig companies is optimistic this year, with head enterprises Muyuan Foods Co. Ltd. (002714.SZ) and Wens Foodstuff Group Co. Ltd. (300498.SZ) expected to achieve profits of more than 17.7 billion yuan and 8.526 billion yuan respectively.
(Only a Rough Estimate of the Pig Farming Sector for Some Listed Pig Companies)
Recently, Caixin reporters interviewed Shanghai Steel Union, Zhuochuang Information, and multiple industry insiders. The interviewees all judged that the average price of live pigs in the second half of the year may remain in the range of 17 to 19 yuan per kg.
Caixin reporters took 18 yuan per kg as the average price of live pigs in the second half of the year and made rough estimates by combining the production targets and costs of listed pig companies. Taking Muyuan Foods Co. Ltd. as an example, Muyuan Foods Co. Ltd. had already sold 24.161 million live pigs from January to April, and the company had previously stated that it expected to sell between 66 and 72 million live pigs this year, with a target fully-raised cost of 14 yuan per kg. If the impact of piglets is not considered, the company's remaining sales volume is estimated to be profitable for 20.083 billion yuan to 22.963 billion yuan for the year if calculated on the basis of 120 kg per pig sold.
Muyuan Foods Co. Ltd. financial report showed that the company's Q1 attributable net loss to shareholders of listed companies was 2.379 billion yuan. The company previously stated that the full cost of pig breeding in April was 14.8 yuan per kg, and sales briefings showed that the company's average sales price in April was also 14.8 yuan per kg. Based on this calculation, the company broke even in April, and its net loss was 2.379 billion yuan for the first four months. The pig farming sector may achieve a profit of 17.704 billion yuan to 20.584 billion yuan for the year.
Based on the above estimation, giantstar farming&husbandry corporation (603477.SH), Shennong Group (605296.SH), New Hope Liuhe Co., Ltd. (000876.SZ), Shenzhen Kingsino Technology Co., Ltd. (002548.SZ), and Wens Foodstuff Group Co., Ltd. are expected to achieve profits of no less than 1.5 billion yuan, 800 million yuan, 1.2 billion yuan, 100 million yuan, and 8.5 billion yuan respectively this year.
Yang Zhiyuan, a pig analyst at Shanghai Steel Union, told Caixin reporters in an interview that the price of live pigs in the second half of 2024 may show an upward trend, with the highest point of the year possibly appearing between July and September, but the specific height will depend on market sentiment. Overall, it will fluctuate within the range of 17.5 to 20 yuan per kg.
Zhu Zekun, a pig analyst at Zhuochuang Information, holds a similar view, "If we calculate based on the previous data of sow capacity, the theoretically fewer the live pigs are in the later stage, and the average price in the second half of the year may remain in the range of 17 to 19 yuan per kg."
Some institutions' research reports indicate that the prices of pigs and chickens are expected to rise in the second half of the year. With the steadily increasing breeding volume of Wens Foodstuff Group Co. Ltd. and the fact that the cost of fodder is currently low, its revenues in 2024 are expected to reach 109.1 billion yuan, with a net income of 6.7 billion yuan attributable to its shareholders.
In fact, some listed companies have already been profitable since April. Caixin reporters found that most enterprises, including New Hope Liuhe Co., Ltd., Muyuan Foods Co. Ltd., Wens Foodstuff Group Co. Ltd., Shennong Group, and Giantstar Farming&Husbandry Corporation, have begun to make profits this year. ST Tianbang (002124.SZ), whose costs are slightly higher, also began to make profits in April in Guangdong, Guangxi, and Anhui regions. Tangrenshen Group Co. Ltd. (002567.SZ) recently stated,"Benefiting from the recent rise in pig prices, and with the continuous decrease in the cost of raising pigs, the company's profit-making ability is gradually improving."
It is worth mentioning that individual breeders are currently making objective profits. A breeder told Caixin reporters,"Recently, the price of pigs has increased considerably. Now I can make about 500 yuan by selling one pig, and the profit is still quite considerable. If the price can continue to remain at this level in the second half of the year, I should be making more money this year."
Monitoring data from Zhuochuang Information shows that as of June 4, the profit per head of self-raised and self-raised pigs was 594.43 yuan per head, and the profit per head of piglets and fattening pigs was 804.43 yuan per head. From January to May this year, the average profit of self-raised and self-raised pigs was 40.2 yuan per head, up 135.72% year-on-year, and the average profit of piglets and fattening pigs was 222.95 yuan per head, up 166.66% year-on-year.