Thanks to the poultry-raising industry upbeat, the company reported a bigturnaround from loss to profit in its interim financial statement. In 15H1, theaverage pig price was CNY 13.31 per kilogram, higher than the company’s pig-farmingcost and increasing from the CNY 12.2 per kilogram recorded a year earlier. Thepig-farming industry has bottomed out in March and entered into a rapidly-growingperiod. As a result, most pig farming companies stated a turnaround from losses toprofits in their 15H1 financial statements.
The company’s cost control runs well and its profit has continuouslyoutperformed the industry average. According to our calculations, the net profit perpig in 15H1 averaged CNY 54; the figure was CNY -50 in 15Q1 and CNY 150 in 15Q2.
The costs in 15Q1 and 15Q2 were CNY 12.65 per kilogram and CNY 12.28 perkilogram respectively. The company’s cost has been lower than its peers’ and its profithas continuously outrun the industry average.
In 15H1, the number of pigs for sale levelled off compared to a year earlier. In thesecond half of 2015, the number is expected to grow more soundly. In 15H1, thenumber of hogs for sale was 850,000, down 0.56%. The main reason is that in 15H1,the company was still in the process of production expansion. We expect the pigproduction to pick up in 15H2. The number of hogs for sale in 2015 and 2016 areexpected to reach 2.25 million and 3 million respectively.