Financial Association News on November 6th (Reporter: Xiao Lianghua): The domestic market is sluggish, putting pressure on Chunxue Food (605567.SH) performance this year. At the earnings conference held today for the third quarter, Chairman Zheng Weixin stated that the company will focus on developing overseas markets, with export volume expected to reach 0.025 million tons in 2024, a year-on-year increase of around 40%.

The financial report shows that in the first three quarters of this year, Chunxue Food achieved revenue of 1.804 billion yuan, a decrease of 13.93% year-on-year; net income attributable to the parent company was 2.3845 million yuan, a year-on-year decrease of 88.64%; non-net profit was -0.956 million yuan, compared to a profit of 10.7497 million yuan in the same period last year.

The oversupply and low prices of domestic white-feathered chicken products are the main reasons for the company's performance pressure. The company's secretary, Li Yanlin, admitted that this year, due to factors such as supply and demand, weak consumption, the sales prices of fresh chicken products saw a significant year-on-year decline, and domestic sales of processed products did not meet sales targets.

According to the statistics of the Shandong Provincial Livestock and Veterinary Bureau, the cost of broiler chickens in the third quarter of 2024 was 7.19 yuan/kg, with the average trading price of broiler chickens in the third quarter at around 7.06 yuan/kg. On average, each farmer suffered a loss of around 0.13 yuan per chicken.

Competitive overseas markets with relatively good dynamics have become the focus for white-feathered chicken food enterprises. Li Yanlin introduced that currently, the company's export income accounts for approximately 26% of its revenue, and in the first to third quarters, the export volume of chicken processed products (pre-cooked food) grew by 25% year-on-year, showing a clear growth trend in the export business.

General Manager Zheng Jun further added that the sales gross margin in overseas markets is around 20%, higher than in the domestic market. Currently, the company has obtained EU registration certification and is actively expanding into the European market. At the same time, the company is actively pursuing export qualification certification from relevant countries in Southeast Asia. Once certified, the company plans to quickly start export operations.

At the earnings conference, Zheng Weixin further stated that in 2025, the company will continue to increase its efforts in developing overseas markets, aiming for a growth rate of over 50%.

In terms of the domestic market, Zheng Weixin believes that with the continuous introduction of policies favorable to economic development in the near future, the domestic economy will improve and the consumer end will significantly turn for the better. At the same time, the prices of main feed ingredients such as corn and soybean meal are showing a downward trend, which will reduce breeding costs, and the market situation will be better than the first three quarters.

According to data from Steel Union, as of October 30th, the average transaction price of white feather broiler chickens in October was 3.65 yuan/jin, a 3.40% increase from the average price in September. The latest data on October 6th shows that the price of white feather broiler chickens in Shandong has remained stable at a yearly high of 3.75 yuan/jin.