Finance Association, November 6 (Reporter Xiao Lianghua) The domestic market is sluggish, and Chunxue Foods (605567.SH)'s performance this year is under pressure. At the third quarter results briefing held today, the company's chairman Zheng Weixin said that the company focuses on developing foreign markets, and the export volume is expected to reach 0.025 million tons in 2024, an increase of about 40% over the previous year.

Financial reports show that in the first three quarters of this year, Chunxue Foods achieved operating income of 1.804 billion yuan, a year-on-year decrease of 13.93%; net profit to mother was 2.3845 million yuan, a year-on-year decrease of 88.64%; after deducting non-net profit - -0.956 million yuan, a profit of 10.7497 million yuan for the same period last year.

Oversupply and low prices of white feather chicken products in the domestic market are the main reasons why the company's performance is under pressure. Li Yanlin, director of the company, admits that since this year, due to factors such as supply and demand, and weak consumption, the sales price of fresh chicken products has dropped significantly year-on-year, and the company's domestic sales of prepared products have not been completed.

According to statistics from the Shandong Provincial Bureau of Animal Husbandry and Veterinary Medicine, broilers cost 7.19 yuan/kg in the third quarter of 2024, the average trading price of broilers in the third quarter was 7.06 yuan/kg, and farmers lost an average of about 0.13 yuan each.

Overseas markets, which have a relatively good competitive pattern, have become the focus of efforts of white feather chicken food companies. Li Yanlin explained that at present, the company's export revenue accounts for about 26% of revenue. In the 1st to 3rd quarter, the company's export volume of prepared chicken products (prepared dishes) increased 25% year-on-year, and the export business grew significantly.

Zheng Jun, general manager of the company, added that the gross margin of sales in overseas markets is around 20%, which is higher than in the domestic market. Currently, the company has passed EU registration certification and is actively expanding the European market. At the same time, the company is actively seeking export qualification certification from countries related to the Southeast Asian market. Once certified, the company plans to quickly launch export business.

Zheng Weixin further stated at the performance conference that in 2025, the company will continue to increase development efforts in overseas markets and strive to achieve a growth rate of more than 50%.

In terms of the domestic market, Zheng Weixin believes that with the recent introduction and implementation of various policies conducive to economic development, the domestic economy will improve, and the consumer side will improve markedly. At the same time, the prices of raw materials such as corn and soybean meal, which are the main ingredients for feed, are on a downward trend. This will reduce farming costs, and the market situation will be better than in the first three quarters.

According to Steel Union data, as of October 30, the average price of white feather broiler in October was 3.65 yuan/kg in front of the shed, up 3.40% from the average price in September. According to the latest data from October 6, the price of white feather chicken in Shandong has stabilized at a high level of 3.75 yuan/kg during the year.