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August is the peak period of profitability for pig enterprises, with daily profits exceeding one billion yuan. | Industry News
①In August, the pig market continued to recover, with sales prices of major pig companies reaching a new high this year; ②The peak of profitability for pig companies still focuses on reducing costs and increasing efficiency. Muyuan Foods, Shennong Group, and Wens Foodstuff Group have all reduced their fully loaded costs to below 14 yuan/kg; ③Some industry insiders believe that breeding companies will continue to maintain a considerable profit trend this year.
WH Group (00288): H1 profits surge, is the pig cycle returning during the upward phase?
Increasing profits but not increasing income is a difficult situation to hide.
We Think WH Group (HKG:288) Can Stay On Top Of Its Debt
Minsheng Securities: Pig prices continue to fluctuate in the high prosperity range, waiting for positive transmission in the post-cycle.
The number of newborn piglets has a turning point since October 2023. Pushing back six months means that April 2024 will mark the turning point for the number of pigs slaughtered, with later pig supply pressures easing month by month.
Swhy Research: Pig prices hit new highs, grasp the profits of livestock and poultry breeding, pay attention to the bottom of the industry and the transformation of seed industry.
Under weak demand and expectations, Swhy research believes that the supply side has a "expectation gap" which is the core reason for the strong performance of pig prices in this round, exceeding the main expectations of the industry and the market.
Lyon first gives a "outperform" rating to WH Group and sets the target price to HKD6.45.
According to a research report published by Lyon, WH Group is the world's largest pork producer, but its profit has fluctuated and its gross margin is as low as 2% over the past decade. Although the group's packaged meat business faces fierce competition, large-scale reductions in production capacity and rising pork prices will increase its operating profit margin in the United States and Mexico from 2% in 2023 to 6% in 2026. With a dividend yield of 5% and the announced plan to list in the United States, the bank first awarded the group a "beat the market" rating with a target price of HKD 6.45.
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