On the evening of January 8, Muyuan Foods disclosed its performance forecast for 2024.

The announcement shows that the net income for the entire year is expected to range from 18 billion yuan to 19 billion yuan, turning from a loss to a profit year-on-year; after deducting non-recurring gains and losses, the net income attributable to shareholders is expected to further increase to between 19 billion yuan and 20 billion yuan.

Net income is expected to increase by over 500%.

According to the announcement, Muyuan Foods expects a net income attributable to shareholders of 17 billion yuan to 18 billion yuan in 2024, compared to a loss of 4.263 billion yuan in the same period last year.

Regarding the reason for the company turning losses into profits in 2024, Muyuan Foods stated that it is mainly due to the increase in the company's hog slaughter volume and the average selling price of hogs compared to the same period last year, coupled with a decrease in hog farming costs compared to the same period last year.

It is worth noting that the net income of 17 billion yuan to 18 billion yuan is the company's second highest performance in history, second only to 27.451 billion yuan in 2020.

Just a few days ago, the report on Hog Sale disclosed by Muyuan Foods showed that the total Hog Sale volume for the entire year of 2024 reached 71.602 million heads, with a total sales revenue of 136.225 billion yuan, representing an increase of 12.20% and 25.88% respectively compared to 2023.

In December, 8.578 million heads of hogs were sold, including 8.188 million heads of Commodity hogs, 0.36 million heads of piglets, and 0.031 million heads of breeding pigs.

The company stated that the increase in monthly output in December was mainly due to the rising market demand close to the Spring Festival. The company arranged its production and sales planning based on market conditions, appropriately raising the sales volume before the Festival to ensure market supply. Additionally, there has been a recent increase in demand for breeding piglets, and the company supplied 0.39 million heads of breeding piglets to customers.

Has the hog cycle turned around?

Although the hog price in the fourth quarter last year showed a weak performance in the peak season and continued to bottom out, the hog prices in the second and third quarters were enough to support an upward trend throughout the year. Overall, 2024 is a year of achieving profitability, and it can be said that the worst moments of the hog cycle have passed, with the hog market showing signs of warming.

From the Hog Sale data of various hog enterprises, the Industry is continuing towards a positive trend. Among them,

Wens Foodstuff Group sold 3.0407 million heads of meat pigs in December 2024 (including live pigs and fresh products), a year-on-year increase of 2.49% and a month-on-month increase of 4.56%; the revenue was 5.968 billion yuan, a year-on-year increase of 29.54% and a month-on-month decrease of 1.50%.

In December 2024, Beijing Dabeinong Technology Group sold 0.7676 million hogs, with total sales revenue of 1.393 billion yuan; for the entire year, total sales reached 6.4013 million hogs, with cumulative sales revenue of 11.837 billion yuan; the average price of commodity fat pigs for the company's holding and affiliated companies was 15.46 yuan/kg.

In December 2024, Shenzhen Kingsino Technology sold 0.1253 million hogs, generating sales revenue of 149.3985 million yuan. Total hog sales for the year amounted to 1.201 million hogs, a year-on-year increase of 14.73%; total sales revenue from hogs reached 1646.7877 million yuan, a year-on-year increase of 44.03%.

In December 2024, New Hope Liuhe sold 1.5915 million hogs, a year-on-year increase of 8% and a month-on-month increase of 26.35%; hog sales revenue was 2.41 billion yuan, a year-on-year increase of 31.69% and a month-on-month increase of 17.56%.

According to Wind, since May of last year, hog prices have started a strong rebound, reaching a peak of 27.77 yuan/kg by the end of August, followed by fluctuations and corrections, yet maintaining a high level of operation compared to 2023.

Shanxi pointed out that the recent rise in hog prices since the beginning of 2024 has been accompanied by a rare significant decline in upstream raw material prices, which helps the hog farming industry to further expand its profit margins.

Guosheng Securities also believes that with the winter solstice over, the peak consumption period has basically ended, and the concentrated increase in supply will also slow down. Based on the pricing performance since November 2024, hog prices are generally supported around 16 yuan/kg, performing better than market expectations. This price still offers considerable profits for leading enterprises. Currently, the trade for hog stocks is somewhat weak in terms of the cycle dimension, but considering the relatively strong performance of hog prices and the decreasing costs for leading hog enterprises, future performance releases of leading hog enterprises remain optimistic.