同时，头部企业成本控制相对完善，且饲料成本下滑，对于企业盈利增长起到重要作用。With the rise in hog prices and the decrease in costs, multiple breeding enterprises have reported increased performance in the third quarter.
As of October 23, Wens Foodstuff Group, Shenzhen Kingsino Technology, and Beijing Dabeinong Technology Group, three hog farming enterprises, have already released their third quarter reports for 2024, all delivering excellent "report cards".
Zhang Wenping, a hog farming analyst at Shanghai Ganglian E-Commerce Holdings Agricultural Products Division, stated that the improved performance of hog breeding enterprises is mainly attributed to the rise in hog prices combined with cost reduction in the third quarter.
Meanwhile, leading enterprises have relatively sound cost control, with a decline in fodder costs playing an important role in driving enterprise profit growth.
It is expected that with activities like salted and preserved meat in some regions in the fourth quarter, stimulating consumption volume, hog prices will continue to be within the profit margin of breeding enterprises.
A research report from Donghai Securities stated that the hog cycle fluctuates around 3-5 years, with factors like diseases, demand, policies, and capital affecting the length of the cycle. The current cycle has prolonged loss period, reduced capacity digestion, narrowed profit margin, slow recovery of capacity post-profit, leading to increased short-term volatility factors affecting hog prices. After experiencing sufficient expansion in the industry, the growth rate of capacity has slowed down in the past two years, entering a phase of stable growth where profit cycle may be extended.
Currently, the asset-liability ratio of hog enterprises remains high, and the industry expansion is cautious. The inventory of sows has been decreasing since January 2023, gradually alleviating supply pressure season by season, with limited short-term supply increment. Coupled with the seasonal improvement in consumer demand, hog prices are expected to remain bullish in the fourth quarter, enterprise performance will improve quarter by quarter, and the industry will enter a phase of profit realization.
Domestic hog farming related enterprises:
cofco joycome (01610), dekon agr (02419)
Overseas hog farming enterprises: WH Group (00288)
