When facing thousands of listed company announcements every day, which ones should you read? What are the key points to take away from the dozens or hundreds of pages of material announcements? Are the many professional terms in the announcements bullish or bearish? Check out Caixin's "Quick Read Announcement" column, where our reporters across the country will provide you with accurate, fast and professional interpretations on the night of the announcement.

On January 3, the Financial Connection reported (by reporters Liu Jian and Wang Ping'an) that with the pig cycle recovering in 2024, Wens Foodstuff Group (300498.SZ) is expected to achieve over 100 billion yuan in revenue for the first time since its listing, thanks to an increase in output and a decrease in breeding costs, with net income turning profitable year-on-year.

This evening, Wens Foodstuff Group released a performance forecast, expecting revenue to exceed 100 billion yuan in 2024; the net income attributable to shareholders of the listed company is estimated to be between 9 billion and 9.5 billion yuan, compared to a loss of 6.39 billion yuan in the same period last year; the net income after deducting non-recurring gains and losses is projected to be between 9.3 billion and -9.9 billion yuan.

From previous forecasts by institutions, 32 institutions provided an average prediction for Wens Foodstuff Group's net income in 2024 of 10.97 billion yuan, with the lowest estimate at 7.002 billion yuan and the highest at 17.25 billion yuan. Other analysts told Financial Connection reporters that "Wens Foodstuff Group's performance meets expectations but does not exceed them, which is considered normal, mainly due to the dual support from rising pig prices last year and declining costs."

In response, relevant personnel from Wens Foodstuff Group stated, "Regarding profit predictions, some analysts may not have considered the impacts of minority shareholder rights, year-end bonus provisions, stock-based incentive expense provisions, and asset verification gains and losses, all of which could affect net income attributable to shareholders."

The company's sales report shows that in the first 11 months of 2024, Wens Foodstuff Group sold 27.14 million live pigs, exceeding the total of 26.26 million for all of 2023; it also sold 1.1 billion chickens, close to the 1.183 billion sold in 2023, making it certain that the total for the year will surpass the previous year if December data is included.

While the output increased, pig prices have continued to rise since May last year, reaching a new high in the third quarter, which has been a key factor in Wens Foodstuff Group's performance growth. The reduction in breeding costs has further expanded profit margins; as of October last year, the comprehensive breeding cost for live pigs had dropped to about 6.7 yuan per jin, and the regional differences in breeding unit costs are gradually diminishing. Among the company's 16 provincial breeding units, the comprehensive breeding costs for live pigs have all fallen below 7.3 yuan per jin, with five below 6.5 yuan per jin, seven in the range of 6.5-7 yuan per jin, and four in the range of 7-7.3 yuan per jin.

Regarding the factors affecting performance fluctuations, Wens Foodstuff Group stated in the announcement that on one hand, the sales volume of the company's meat pigs and chickens increased year-on-year during the reporting period, and the average selling price of hogs rose; on the other hand, the company has continuously strengthened its basic production management and major disease prevention efforts, leading to continuous improvement in core production indicators and good production conditions. Meanwhile, the decline in fodder raw material prices has significantly reduced breeding costs, driving a year-on-year increase in profits from the pig and raising chickens businesses.

It is worth noting that in contrast to the impressive performance, Wens Foodstuff Group's performance in the secondary market in 2024 was not ideal, with a cumulative decline of 16.66% in the stock price for the whole year.

Looking ahead to 2025, a recent research report released by a brokerage pointed out that the sow production capacity is entering a slow recovery stage in 2024, with the supply of hogs becoming more relaxed in 2025, putting pressure on pork prices.

Data from the Ministry of Agriculture and Rural Affairs shows that by the end of November 2024, the stock of breeding sows was 40.8 million heads, a month-on-month increase of 0.2% and a year-on-year decrease of 1.9%, equivalent to 104.6% of the normal retention level. Although the number of new piglets from August to October 2024 decreased by 1.6% compared to the same period in the previous year, it is still at a relatively high level in recent years.

Industry insiders interviewed by the Financial Associated Press stated that cost control will become an important guarantee for the profitability of listed pig companies in 2025, "The prices in 2025 will definitely be overall lower than those in 2024, and over the course of the year, pig breeding enterprises with good cost control are expected to continue to maintain good profitability."

In fact, Wens Foodstuff Group had already set its cost target for 2025 earlier, "The company preliminarily plans for the comprehensive cost target of meat pig breeding to be below 6.5 yuan per kg for the whole year in 2025."