Continuing to implement cost reduction and efficiency improvement plan, the leading hog enterprise Muyuan Foods achieved a successful turnaround in operating performance in the first three quarters of the A-share market, with hog sales increasing in volume and price compared to the same period last year; both revenue and net profit in the third quarter achieved rapid growth.

At the same time, Muyuan Foods plans to distribute a large dividend of 4.5 billion yuan, marking the first dividend to investors in the quarterly report since the company's listing.

On the evening of the 29th, Muyuan Foods released its third-quarter financial report.

1) Key Financial Figures:

Revenue: The revenue in the third quarter was 39.91 billion yuan, a year-on-year increase of 28.3%;

Net Income: The net income attributable to shareholders was 9.652 billion yuan, a year-on-year growth of 930.2%; basic earnings per share were 1.79 yuan, a year-on-year increase of 894.4%.

2) Shareholder Returns:

Dividends: It is planned to distribute a cash dividend of 8.31 yuan per 10 shares to all shareholders (including taxes), with a total dividend amount of 4.5 billion yuan (including taxes), accounting for 40.06% of the net income from January to September 2024.

Muyuan Foods' stock price fell by over 1% on Tuesday to 43.07 yuan per share, with a market cap of 235.4 billion yuan. Since late September, Muyuan Foods' stock price has risen by over 20%.

Turning losses into profits in the first three quarters, with both sales volume and prices of hogs rising, achieving significant cost reduction and efficiency improvement.

The performance in the first three quarters is also impressive, with Muyuan Foods achieving a total operating income of 96.78 billion yuan during the period, a year-on-year growth of 16.6%; operating profit of 12.11 billion yuan, a turnaround from a loss of 14.23 billion yuan in the same period last year; net income attributable to equity holders of the parent company 10.48 billion yuan, a year-on-year increase of 668.9%. Basic earnings per share were 1.9 yuan, a year-on-year increase of 670.6%.

The operational performance turned losses into profits mainly due to the increase in sales of hogs compared to the same period last year, with a significant decrease in the cost of hog farming during the reporting period.

In terms of sales volume, Muyuan Foods sold a total of 50.144 million hogs from January to September, an increase of 6.7% compared to the same period.

In terms of selling price, the price of commodity hogs in September was 18.65 yuan/kg, a decrease of 5.4% compared to the previous month and an increase of 17.9% year-on-year.

In terms of cost, Muyuan Foods' full breeding cost for hogs in September has slightly dropped below 13.7 yuan/kg, a decrease of 2 yuan/kg compared to the beginning of this year, with a decline of over 10%, showing a significant cost reduction and efficiency improvement effect. According to the plan, Muyuan Foods expects to further reduce it to 13 yuan/kg by the end of the year.

The financial report also shows that Muyuan Foods had a net cash flow from operating activities of 29.178 billion yuan in the first three quarters. As of the end of the third quarter of 2024, the asset-liability ratio was 58.38%, a decrease of 3.43% compared to the end of the second quarter.

Large-scale dividends and buybacks

It is worth noting that Muyuan Foods proposed a high proportion of dividends and payouts in the third-quarter report. According to the financial report statement:

Based on a total share capital of 5421.0799 million shares, a cash dividend of 8.31 yuan per 10 shares will be distributed to all shareholders, totaling 4.505 billion yuan in cash dividends, without bonus shares, and no capital reserve transfer to increase share capital.

The total dividend amount is 4.5 billion yuan, accounting for 40.06% of the company's net income in the first three quarters, marking Muyuan Foods' first dividend distribution to investors in its quarterly reports since its listing.

Additionally, Muyuan Foods revised its "Future Three-Year (2024-2026) Shareholder Dividend Return Plan for Muyuan Foods Co., Ltd.", increasing the annual profit distribution in cash from no less than 20% of the distributable profits realized in that year to 40%.

At the end of last month, Muyuan Foods announced that it plans to repurchase company shares through centralized bidding trading using its own funds or self-raised funds, with a total repurchase amount of 3 to 4 billion yuan. The repurchased shares are intended to be used for employee stock ownership plans or stock-based incentive plans.

Subsequent announcements indicate that China Citic Bank Corporation has provided Muyuan Foods with 2.4 billion yuan of special loan funds for the company's share repurchase.