The rhythm market for pig cycles is no stranger to it, and the industry oligarchs have their own ways to deal with the cycle of troughs. At present, the “corporate + farmer” light asset model represented by Wen's shares, Yingying Farming and Animal Husbandry, and the intensive and heavy asset farming model represented by Muyuan are each rapidly developing to seek a break in the industry's winter. Hog prices fell to four-year lows The Spring Festival consumption season in the 'southern bacon and the new year's pigs' has already passed. The pig breeding industry ushered in the price of 'waterloo' under the superimposed effect of the off-season and cycle lows. 'The current national average hog slaughter price is 11 yuan/kg. This price is only slightly higher than the annual low in mid-April 2014, which is basically the same as the low price level in the summer of 2010. ' Feng Yonghui, chief analyst of Sogou.com said: At present, the average domestic pig slaughter price has reached a new low of nearly four years. The industry's actual average loss is about 100 yuan. It is reported that due to the boost in demand during the Spring Festival and the impact of the heavy snowfall in many places, the domestic pig slaughter price once rose to RMB 15.2/kg in late January 2018. However, the high prices only lasted for two days. From February 3, the national slaughter pigs were all slaughtered. The price began to drop sharply, with a drop of nearly 30% in one month. At the same time as the price of pigs fell, feed prices rose, further reducing the profitability of farmers. The price of Henan corn in 2018 showed that on January 23, the price of corn in Henan Province (14%) was 1,770 yuan/ton, and on March 9, the price had reached 1,880 yuan/ton, which was increased by 110 yuan per ton. With regard to the profitability of the current farmers, Feng Yonghui calculated an account for the reporter. He said that the farmer's corn price is now at 1 yuan/kg, and the soybean meal has reached 3.3 yuan/near. To cut the piglet cost, raise a pig The basic cost of the piglet is around RMB 900. The current price of the piglet is about RMB 400/head, and the overall cost of the pig is 1300 yuan. According to the pigs slaughtered at the normal size, the current price of the single head is about 1,200 yuan, so basically the current A pig will lose 100 yuan. The current profitability of pig farmers is very different from the two-year cycle high. Around June 2016, the average retail price of fresh pork in Henan reached 27 yuan per kilogram, and the pig-to-food ratio also reached a historical high of 12:1. The average annual profit of farmers was more than 1,000 yuan. However, at present, the domestic pig food ratio has been reduced. 5.6: 1 profit and loss red line. After October 2015, the government set a warning line of 5.5:1, which has always been 6: 1. According to the previous pig food ratio alert line, the current industry has been a total loss. ' Feng Yonghui said, pig food Ratio is a key measure of whether aquaculture breaks the balance or not. What counts is the ratio of live pig prices to that of main feed corn. Although the current pig food ratio has not fallen below 5.5:1, the general loss of farmers is a reality. Talking about the recent trend of hog prices, Business Society analyst Wang Yanjie also stated that the average price of pork in the national agricultural wholesale market last week was 18.86 yuan/kg, down 5.87% month-on-month. The price of pigs gradually stabilized and the supply and demand stalemate pattern reappeared. The price was mainly adjusted by narrow fluctuations. As the pig market stopped falling, the ex-factory price of white meat continued to fall. However, due to weak terminal demand, the fresh sales market was once again in a fierce competition situation. At present, the price of pigs has been low, most slaughter companies have taken measures to analyze the slaughter ratio. Although the overall slaughter volume has increased slightly, the proportion of fresh sales has fallen by as much as 10% to 15%. The increase in slaughter volume is divided into stockpiles. Lord, the market boosted. At the same time, there are low-priced products that compete in the market, and the difficulty of taking delivery of most of the fresh products of butchers has increased. Some of the peripheral shipments have suffered losses. The recent hog prices are still dominated by low volatility. Terminal demand is hard to improve. Short-term meat prices are expected to increase. Easy to fall or rise. Period trough, animal husbandry, market value shrinks Not only the farmers' profit, but also the listed company's stock price are highly correlated with the price of live pigs. In the year of 2017, Muyuan shares, which was highly praised by the secondary market, saw a sharp drop in the market value of pork prices before and after the Spring Festival. On March 13th, the company’s stock closed at 50.36 yuan/share. Based on the total stock capital of 1.158 billion yuan, the market value was 58.3 billion yuan. Compared with the highest point of January 23, 2018, which was 62.88 yuan, the decline in pig price has caused the stock price of the company. Has dropped 12.52 yuan / share. Prior to March 6th, the animal husbandry of the original stock also burst out of the recent low price of 42.3 yuan / share, the higher point fell more than 32%, the total market value of shrinking 23.8 billion. Before the current round of decline, the stock price of the animal husbandry has continued to open for more than half a year. From June 2017 about 23 yuan / share, shocks up to January 2018 up to 62.88 yuan / share, more than six months more than 170% increase. 
According to public information, Qin Yinglin, the chairman of Muyuan Co., Ltd. and his wife together hold 65.05% of the company's shares. As the stock price rises, the couple's worth soars and they recapture the richest man in Henan Province in 2017. However, after the recent drop in stock prices, the assets of the richest people have shrunk dramatically. According to the closing price on March 13th, Qin Yinglin’s wife’s net worth has fallen by about RMB 9.5 billion in the past month or so, which has shrunk by about 20%. The rhythm of the cycle of pigs is difficult to avoid. Qin Yinglin also has confidence in the ability of companies to fight against the trough of the cycle. Earlier in the collective activity of a listed company in Henan Province, Qin Yinglin publicly stated that the cycle of pigs will have an impact on the entire industry, and that each cycle fluctuation is an upgrade of the industry. The cycle low and epidemic situation will allow disadvantaged enterprises and farmers to completely withdraw. , But it is an opportunity for profit and development for dominant companies. The self-confidence of Muyuan shares comes from its intensive, large-scale farming business model. According to public information, at the beginning of the Makino Co., Ltd. landing in 2014, the number of pigs slaughtered was 1.895 million heads. By 2017, the company's annual sales of pigs had soared to 7,277.4 heads. According to the 2017 Annual Report, the amount of pigs to be slaughtered by the Makoto Shares Plan will be 2018. Reached 11 million to 13 million heads. It's not about raising pigs, it's on the way to raising pigs. After Muyuan had landed on the capital market, the most important task was to continue to expand its production capacity. 'Muyuan insisted on the integration of self-cultivation and self-cultivation. The cost of breeding is at a lower level in the industry. Compared with the average price of the industry, the cost of animal husbandry per kg of slaughtered pigs is less than 0.5 yuan, and the average cost per head is lower by 100 yuan.' Feng Yonghui said According to historical data, no one had a head loss of more than 300 yuan at the bottom of the cycle, and a loss of 300 yuan or so in only one or two months. Therefore, the intensive cultivation of the animal husbandry can rely on low It is easy to spend the pig cycle. In response, the secretary of the animal husbandry department of the animal husbandry Qin Jun also said in an interview with reporters that according to the current national average pig slaughter price, the current industry as a whole has been at a loss. However, comparing the industry’s average cost of 12 yuan/kg, the animal husbandry was 11.5 yuan/kg. The low cost advantage can still resist the price drop, and it is basically on the breakeven line. He believes that the bottom of the cycle is unavoidable, but the advantages of large-scale breeding can lead to smaller losses and shorter time to losses. For example, at the bottom of the last cycle in 2014, but the entire industry suffered more than one year of loss, and Makura only lost money. In the four months, the impact on the company’s cash flow was much smaller. In addition, compared with non-listed companies, Muyuan’s financing capacity increased, financing difficulty decreased, and it also played a supporting role for the company’s overall cash flow and solvency. For the 2018 slaughter target, he said that even at the bottom of the cycle, the company's slaughter volume will grow according to the normal production and construction plans. At the same time as a large-scale enterprise, the company will not adjust the slaughter due to the high and low price of pigs, and the total volume growth will be promoted in an orderly manner. . Lightweight asset model is its own way In contrast to the continuous expansion of the Shepherd’s shares in the pig houses, the company listed in Henan’s main pig breeding company, Yingying Farming and Animal Husbandry, is busy selling pig houses and light assets. On March 10, the announcement of the asset transfer of the young Eagle Farming and Animal Husbandry was planned. In the next 12 months, some of the pig houses and ancillary facilities in Jilin and Sanmenxia areas will be distributed in batches and transferred in stages. Total transfer capacity scale A total of approximately 786,000 merchandise pigs were slaughtered for the year, with approximately 1.5 million heads of commodity piglets and approximately 55,100 heads of annual ecological pigs. It is expected that the transaction amount will not exceed 1.7 billion yuan. Yingying Farming and Animal Husbandry stated that after the transfer, the relevant partner only owns the fixed assets and fulfills the obligation of co-operative breeding. The ownership of the biological assets is still owned by the hawk and animal husbandry. The transaction will not affect the production of the company. Business has an adverse effect. On the same day, Yingying Farming and Animal Husbandry also announced that it will progressively recover from the Shenzhen Zefu Agricultural Industry Investment Fund Co., Ltd. (Limited Partnership) (hereinafter referred to as the partnership enterprise) its share of not more than 2 billion yuan according to the project investment, and Agreement, the agreement, in the withdrawal of the corresponding investment income. After the two announcements, what are the intentions of the 3.7 billion yuan return of the Eagle Eagles and Animal Husbandry? This is to start with the very different business model from the Shepherd’s stock. At present, China's large-scale breeding mainly includes the two modes of “company + farmers” represented by Wen's shares, young eagle farming and animal husbandry, and collective self-support represented by animal husbandry stocks. The biggest difference between the two models is that the hog farming link is created by external farmers. Completion is still done by the company itself. The “company + farmer” model has a relatively small capital occupation and the scale is easy to expand. The group self-supporting model has great advantages in pig quality control, food safety protection, disease prevention and control, and production efficiency. . 'When the swine cycle is at a low point, the group's self-supporting model is more resistant to resistance, and the test of the company's + farmer model's capital chain is even more challenging. 'Feng Yonghui's analysis stated that the company's + farmer's model needs to share with farmers, once it enters the weak cycle. , equivalent to the average loss of 200 in the national market, the company + farmer model companies also need to give farmers more than 100 yuan profit, so the cumulative average should be a loss of 300 yuan. The group of self-supporting enterprises, the loss of 200 is 200, if the cost is low The loss is even less. However, he said that although the weak cycle has greater pressure on the company + farmer model, in the long run, more farmers will be willing to join the company during the downturn. This is also a good time for the expansion of this model. Transferring liquidity to the pig houses to realize light assets and expanding the whole industry chain model to smooth the pig cycle is a development model for the young eagle farming and animal husbandry in recent years. In the company's 2017 semi-annual report, the operating income of the farming sector accounted for only the proportion of total revenue. 53.96%, food trade, Internet, financial services and other businesses, accounted for almost half of the company's revenue. Hou Jianfang, the chairman of the Board of Agriculture and Animal Husbandry of Eagle Eagles, had previously analyzed the light asset model of the company when interviewed by reporters. It stated that due to the pig raising cost, the cost of pig feed accounts for about 70%, and this part of the cost cannot be reduced. , When the cycle of pigs goes down, the profit reduction of the general breeding enterprises is also unavoidable. Even a certain period of time, the price reversed. In 2014, after the profit of the company was significantly affected by the downturn of the pig cycle, the company started to upgrade the model from 2015, and the company The pigs in the farming sector are transferred to the cooperatives under conditional conditions. Today's Eagle Mode has actually done risk hedging and can effectively avoid the risk of periodic fluctuations. The current cycle is low or traversal throughout the year Although the listed companies have their own answers to the pig cycle, the impact of the weak cycle on the profits of the entire industry is still unavoidable. Recently, the domestic pig breeding industry’s leading company, Wen’s shares, Makino shares, and Yingying’s agriculture and animal husbandry have announced their 2017 annual reports respectively. Performance Express, The cyclical effect has already appeared.
Wen's stock performance report showed that in 2017, the company achieved operating revenue of 55.657 billion yuan, a year-on-year decrease of 6.23%; net profit of 6.77 billion yuan, a year-on-year decrease of 42.58%. Although the chicken segment achieved profitability, the pig sector dragged down the overall performance of the company in 2017. Wen's shares said that due to changes in the supply and demand relationship in the market, the sales price of company hog sales in 2017 decreased by 18.59% year-on-year. The pig-raising business continued to grow steadily. The sales of commercial hogs increased by 11.18% year-on-year, and the average weight of sales increased by 3.65 kg/head compared to the same period last year. However, this was not enough to offset the impact of the decline in the average selling price, resulting in a significant decrease in the profitability of company hogs. According to the 2017 annual report of Muyuan, the company achieved sales revenue of RMB 10.042 billion during the period, an increase of 79.14%; net profit of RMB 2.366 billion, only a slight increase of 1.88% year-on-year. For the performance to be able to maintain profitability during the weak cycle, Muyuan shares Benefit from the rapid expansion of the company, and actively research and develop and apply advanced automated swine breeding equipment to realize intelligent pig raising, effectively reducing costs. In addition, the Eagle Eagle Farming 2017 performance report also showed that during the period, the company realized operating income of 5.447 billion yuan, a year-on-year decrease of 10.56%; net profit of 646 million yuan, a year-on-year decrease of 25.64%. The decline in performance was mainly due to changes in supply and demand in the hog market. In the same period, however, the growth in the food trade sector filled the pig-raising sector with a revenue increase of 4.49% over the same period last year. Although the 2017 pig cycle bid farewell to the era of high profit, the overall profit is still in the micro-profit range. However, after the current round of hog price crash, the period of the cycle of losses has officially kicked off. According to Feng Yonghui, the hog breeding industry has now bid farewell to the profitable period of the previous two years and entered the period of loss. Although the current price is close to the cycle low, it should not yet reach the bottom. It takes time to get out of the bottom of the pig cycle. Even in the weak cycle Inside, live hog prices will still be subject to price fluctuations due to seasonal and other factors. It said that the last round of weak cycles has spanned three years, and the cumulative loss period of the industry is more than 20 months. Currently, the scale of the entire industry is higher than that of the previous round, and large-scale companies often do not follow the market. Mediation capacity. Therefore, under this weak cycle environment, the company's ability to resist losses is stronger, and the loss time may be longer.
For the hog cycle trend, Sino-Thai Securities Research also judged that 2018 was the second year of the pig price decline. The industry suffered losses. By 2019, there will be a high probability of a cyclical bottom. After 2019, the down cycle is basically completed, and by 2020 Probability will show upward trend.
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