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Caixin Media, August 29th (Reporters: Liu Jian, Wang Ping'an) Benefiting from the continuous recovery of the hog market, ST tech-bank (002124.SZ) turned losses into profits in the first half of the year, achieving a net income of 0.174 billion yuan after non-recurring items in Q2, with a clear recovery trend in the main business operation. In addition, the company has also achieved certain results in debt management, with the debt ratio decreasing by over 8 percentage points compared to the beginning of the year.

Tonight, ST tech-bank released its 2024 interim report, achieving an operating income of 4.318 billion yuan during the reporting period, a decrease of 8.84% year-on-year. It achieved a net income of 0.841 billion yuan attributable to the parent company, turning losses into profits compared to a loss of 1.256 billion yuan in the same period last year.

Looking at the quarterly performance, the company achieved a net income of 0.604 billion yuan in Q1 and 0.237 billion yuan in Q2, showing a declining trend. However, Caixin Media reporters noted that the Q1 results included an investment income of 0.995 billion yuan from the sale of a 32.91% stake in Shiji Biology. In fact, after adjustments, the company achieved a net loss of 0.455 billion yuan in Q1, and a net income of 0.174 billion yuan after adjustments in Q2, showing a significant improvement in the main business operation performance.

Behind the improvement in performance is the rise in hog prices and the company's progress in reducing costs and increasing efficiency. Hog prices began to rebound in the second quarter, with an average selling price of 16.38 yuan/kg in the first half of the year, compared to 14.95 yuan/kg in the same period last year, a year-on-year increase of 9.57%. At the same time, the company's hog sales costs showed a downward trend, with a unit sales cost of 15.23 yuan/kg in the first half of the year, compared to 18.17 yuan/kg in the same period last year, a year-on-year decrease of 16.19%.

Specifically in terms of products, in the hog farming sector, the company sold a total of 3.0183 million heads of commodity hogs during the reporting period, a slight decrease of 1.47% year-on-year, still ranking 4th among A-share listed companies, achieving an operating income of 2.853 billion yuan, with a gross margin increase of 22.55 percentage points compared to the same period last year.

In terms of the food production business, the sales revenue for food production during the reporting period was 1.323 billion yuan, a year-on-year increase of 48.37%, with a gross margin increase of 2.51 percentage points compared to the same period last year, but the cost of goods sold remained high at 1.369 billion yuan, putting it in a loss-making state. ST tech-bank also stated in the financial report, "As the scale increases and the product structure is optimized, costs have decreased. Losses have reduced but have not yet been turned into profits."

It is worth mentioning that the company has been continuously working to reduce its debt since the beginning of this year, and has indeed achieved certain results. At the end of the reporting period, the company's total debt was 11.336 billion yuan, with a debt ratio of 78.4%. Compared with the beginning of the year, the company's total debt has been reduced by 3.577 billion yuan, and the debt ratio has decreased by 8.33 percentage points.

However, it should be noted that as of the end of the reporting period, the company has only 81.39 million yuan in cash and cash equivalents, while short-term borrowings still amount to 2.7 billion yuan, and non-current liabilities due within one year amount to 0.675 billion yuan.

Regarding the company's pre-restructuring plan, on August 9, 2024, the company received a "Decision" delivered by the Ningbo Intermediate People's Court, which decided to proceed with the pre-restructuring of Tech-Bank Food. The pre-restructuring period is six months, and Beijing Dacheng Law Firm, Zhejiang Heyi Guanda Law Firm, and Beijing Dacheng (Ningbo) Law Firm are jointly appointed as the pre-restructuring administrators of Tech-Bank Food Co., Ltd.