On October 30th, Caixin (Reporter Zhang Chenjing) as pork prices rebound, breeding companies in the third quarter have successively reported positive results, with Zhejiang Huatong Meat Products (002840.SZ) reversing losses year-on-year in the first three quarters.

Tonight, the company released an announcement stating that in the first three quarters of this year, the company achieved revenue of 6.485 billion yuan, a 5.21% year-on-year increase; net income attributable to shareholders of the listed company was 53.4228 million yuan, compared to a net loss of 0.358 billion yuan in the same period last year.

Despite the improved performance, Zhejiang Huatong Meat Products' debt ratio remains high, reaching 74.42% by the end of the third quarter. The company's asset-liability ratio is basically the same as the end of the previous year, with short-term and long-term borrowings hitting a new high, totaling nearly 4 billion yuan.

Zhejiang Huatong Meat Products' main operations include hog farming, animal slaughter, and deep processing of meat products. However, its core product is fresh pork after slaughter, with this business accounting for over 90% of the company's revenue.

For animal slaughter companies, the cost of live hog raw materials is the main cost of the slaughter business. Generally, when the market price of live hogs rises, the raw material costs of the slaughter business will also increase significantly. Unlike other pig breeding companies, Zhejiang Huatong Meat Products has rapidly expanded its hog farming capacity, reducing the raw material costs of its slaughter and meat processing businesses. The company's operational goal is to achieve self-bred, self-raised, and self-slaughtered hogs.

However, currently due to high breeding costs, the company's self-bred, self-raised, and slaughter businesses are not fully synergized. The company previously disclosed that its breeding cost in the first quarter of this year was 16.43 yuan/kg, which is higher than leading pig companies like Muyuan Foods (002714.SZ) and Wens Foodstuff Group (300498.SZ).

It is worth noting that Zhejiang Huatong Meat Products also announced tonight that it will increase the estimated amount of daily related transactions, expecting to increase related trades by 80 million yuan, mainly for leasing property and purchasing fodder raw materials to the controlling shareholder of the company, Huatong Group Co., Ltd., its controlled subsidiaries, and Zhejiang Huatong Import and Export Co., Ltd. The announcement shows that from the beginning of 2024 to October 20th, related trades amounting to 0.276 billion yuan have already occurred, a 1.17 times increase from last year's 0.127 billion yuan.