On July 29, Haid Group released its 2024 semi-annual report, achieving operating income of 52.296 billion yuan, a year-on-year decrease of 0.84%; The net profit was 2.125 billion yuan, an increase of 93.15% year-on-year. The company's basic earnings per share was 1.28 yuan, a year-on-year increase of 91.04%.
Analysis of the company's main business segments
Feed business
Sales volume and revenue: During the reporting period, the company achieved feed sales of about 11.79 million tons, a year-on-year increase of 8.5%; Export sales were 10.81 million tons, a year-on-year increase of 8%.
Variety distribution:
Outside the sales volume of aquafeed increased by about 10% year-on-year.
Pushui material increased by 15%-20% year-on-year.
Shrimp and crab feed increased by 8% year-on-year.
High-grade puffed fish feed (special water fish feed) increased slightly year-on-year.
Sales outside poultry feed increased by about 14% year-on-year.
Pig feed fell 7% year-on-year.
Under the background of a 4.1% decline in the country's total feed output, Haid Group achieved contrarian growth by adjusting its sales strategy and market resource allocation. The gross profit margin of feed increased by 0.87 percentage points over the same period last year to 9.76%.
Seedling and animal protection business
Seedling business: the operating income was about 700 million yuan, a slight decrease year-on-year. The main reason is the decrease in the stocking density of Penaeus vannamei shrimp culture. The company invested in the construction of aquatic seed farms in Southeast Asia, launched the international strategic layout, and promoted the large-scale scale of parthenogenesis of traditional species such as tilapia, grass carp, bream, crucian carp, raw fish, yellow catfish and other species.
Animal protection business: operating income was 466 million yuan, a year-on-year decrease of 23%. Through product innovation and upgrading, the company has launched innovative feed products such as functional materials and health care materials, and the efficacy of animal protection products has been gradually reflected in feed products.
Breeding business
Pig breeding: In the first half of the year, about 2.7 million fat pigs were slaughtered, turning losses into profits year-on-year. The company implements the operation model of "purchasing piglets, company + family farm, locking in profits, and hedging risks" to reduce breeding costs.
Aquaculture: The main aquaculture species are special aquatic products such as raw fish and shrimp. In the first half of the year, the price of raw fish recovered, and the business reduced losses. Factory shrimp farming reduces the cost of breeding through refined management and professional operation, and plans to expand the scale appropriately in the future.
Overseas business
Sales volume and layout: The company's overseas feed sales exceeded 1 million tons, a year-on-year increase of more than 30%. Lay out core production capacity in Southeast Asia, South America, Africa and other places, and continue to develop surrounding markets.
Industry background and market performance
Market environment and industry conditions
In the first half of the year, although the prices of raw materials for upstream bulk agricultural products have fallen and the profitability of breeding terminals has improved, the overall consumer demand recovery rate is slower than expected, especially in the terminal catering industry.
Aquaculture, especially freshwater species, has experienced a long-term loss cycle, and production capacity has been reduced, resulting in a significant reduction in the storage ponds of grass carp, tilapia, raw fish, California perch and other species, which in turn makes the demand for feed insufficient. The profit center of shrimp and crab farming has shifted downward, such as the decline in prices of vannamei shrimp due to the global expansion of production, and the market demand has shrunk.
Due to swine fever and weak demand, the pig breeding industry has poor profit performance, and small and medium-sized retail investors have accelerated their exit, and the market competition is fierce. The overall demand for poultry farming is weak, and the stock of eggs and poultry is increasing, but the price of meat and poultry is low.
Market performance
According to the Feed Industry Association, the country's total feed output fell by 4.1%. However, Haid Group achieved feed sales of about 11.79 million tons, a year-on-year increase of about 8.5%. Among them, the sales volume was 10.81 million tons, a year-on-year increase of 8%, and the market share was further improved.
The sales volume of aquatic feed increased by about 10% year-on-year, the general water feed increased by 15%-20%, and the shrimp and crab feed increased by 8%, of which the vannamei shrimp feed increased by 20%, but the crayfish feed declined.
Poultry feed sales increased by 14% year-on-year, while pig feed sales decreased by 7%, but market share increased.
Raw material prices and their impact
Fluctuations in raw material prices are an important factor affecting the profitability of a company. In the cost of the company's main feed business, the price of raw materials accounts for more than 95%. Corn and soybean meal are the main raw materials, and price fluctuations have a significant impact on the company's gross profit margin.
Corn price: In 2020, the price of corn futures will be around 2,000 yuan/ton, and the highest price will rise to more than 3,000 yuan/ton in 2022. At present, the price is maintained at about 2400 yuan/ton.
Soybean meal price: currently approaching 3,000 yuan/ton, the future bulk raw material price or continue to maintain a low shock trend. Analysts believe that global soybean supply and demand remain loose in 2024/25, especially the expected increase in soybean production in United States and South America, which will weigh on prices.
Future outlook and strategic layout
Business Expansion & Innovation
Feed business: The company plans to continue to expand feed production, increase market share, and implement innovative feed products to meet market demand.
Aquaculture business: The company will continue to optimize the pig breeding model, reduce the cost of aquaculture, and moderately expand the scale of shrimp farming in aquaculture.
Seedlings and animal protection business: The company will continue to promote the international layout and enhance the market competitiveness of seedlings and animal protection products.
Overseas market expansion
During the reporting period, the company's overseas feed sales exceeded 1 million tons, a year-on-year increase of more than 30%. The company has established core production capacity in Southeast Asia, South America, Africa and other regions to further explore the international market:
Southeast Asian market: With Viet Nam as the core, expand Indonesia, Bangladesh, Malaysia and other markets.
African market: With Egypt as the "bridgehead", it extends to the North Africa and East African markets.
South American market: Establish business layout in Ecuador and explore the market of neighboring countries.
risk management
Raw material price fluctuation risk: The company will reduce the impact of raw material price fluctuation on profitability through diversified raw material procurement and cost control.
Market competition risk: The company will continue to enhance product innovation and market expansion capabilities to enhance market competitiveness.
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