Drawing Up 7 Billion Increase In Fund-Raising And Developing The "Whole Industry Chain" Mode.

After the specialized management of foreign investment and the centralized management plan of investment equity, Shuanghui development again went deep into the livestock and poultry products industrial chain.

? ? ? In May 18th, Shuanghui development ( 000895.SZ A plan to raise funds of 7 billion yuan has been announced. After deducting the issue cost, the fund is intended to be used for the production of broiler industrialization, production of pig farms, pig slaughtering and conditioning products, technological transformation of meat products, China Shuanghui headquarters and supplementary mobile assets. Gold.

In this regard, Shuanghui will upgrade its capacity and technology in the field of live pigs and broilers. The company said that the purpose of the move is to update and expand the existing industrial chain, enhance the production capacity of the upstream aquaculture sector, enhance the level of automation and information in slaughtering and meat products, and optimize the product mix.

After the impact of "African swine fever", the market has increased the consumption of broilers. On the chain of meat products, Shuanghui has been expanding rapidly in the industry cycle.

Raise the upstream chicken breeding

After years of "vertical and horizontal" pork products market, the industry chain of pig breeding and processing integration developed by Shuanghui has matured. From this point of view, the majority of funds will be allocated to the capacity building project of broiler industrialization.

Announcement information shows that the broiler industrialization capacity construction project includes feed production, breeding chicken breeding, chicken hatching, commercial chicken breeding and slaughtering and processing. Forty-five point one six Billion yuan, intends to use fund-raising investment Thirty-three point three Billion yuan, all for capital expenditure.

Shuanghui development believes that this kind of input will increase the production capacity of the upstream chicken products, stabilize the supply of raw materials for downstream meat processing business, and enhance the cost control. Besides, through the investment in the breeding end, the self-sufficiency rate of chicken raw materials can be enhanced, and the quality control ability of the rear end meat products and the processing efficiency of the industrial chain can be improved.

This description is exactly the duplication of Shuanghui's layout logic in the pig industry chain. For the broiler industry, its plan is also a chain development mode of the whole industry.

In response to the previous integrated meat business, the outbreak of African swine fever has caused a great impact on the industrial chain since 2018. In addition, the recent outbreak of the new coronavirus pneumonia has led to many drawbacks of slaughterhouses. At the same time, the high price of pig breeding end has brought great pressure to the profitability of the industry.

In this plan, Shuanghui development has joined the expansion of pig breeding capacity, upgrading slaughtering technology and other projects. Announcement shows that pig breeding capacity construction projects total investment Twelve point five seven Billion yuan, intends to use fund-raising investment Nine point nine Billion yuan.

Total investment of technical renovation projects for pig slaughtering and conditioning products Four point eight five Billion yuan, intends to use fund-raising investment Three point six Billion yuan. Total investment in technological transformation of meat products Three point two four Billion yuan, mainly for plant transformation, equipment acquisition, etc., intends to use fund-raising investment. Two point seven The annual output of meat products is about 60 thousand tons.

Liu Chang, an analyst at Tianfeng securities, pointed out in his research report that small and medium-sized slaughterhouses have poor stability and low bargaining power at both ends. They may gradually withdraw from the market due to upward pressure and thus accelerate the upgrading of industry concentration. "The advantages of Shuanghui base's full coverage will lead to its concentrated income. Therefore, in the context of slaughtering industry's small profits, Shuanghui development needs to expand the meat business to make up for the slaughtering industry's poor profitability and uneven production and marketing, so as to achieve mutually beneficial and win-win results in slaughtering operations and meat products businesses."

It is worth noting that Shuanghui development also intends to raise 1 billion 300 million yuan to raise liquidity.

The company said that over the past few years, while the company's business grew rapidly, the level of debt also increased. By March 31, 2020, the company's asset liability ratio was 40.31% 。 Therefore, the company needs to supplement the liquidity to suit its business operation, so as to meet the company's sustained business development, further enhance its capital strength and optimize its asset liability structure.

Enhance risk resistance

This is not the first big move for Shuanghui to develop in the industrial chain this year.

Prior to April 28th, Shuanghui development announcement was to sign an investment agreement with the Zhangwu County People's Government of Fuxin City, Liaoning Province, to build pig breeding and broiler industrialization projects, and fixed assets investment is expected to be about RMB. Twenty-seven point one five Billion yuan, of which pig breeding projects invested about RMB. Nine point eight The investment of broiler industrialization project is about RMB. Seventeen point three five Billion yuan.

In the 2019 performance note, Ma Xiangjie, the company's chief executive, revealed that he would increase investment in pig farming and broiler farming this year.

This timing is not surprising in the industry.

In livestock and poultry industry, live pigs and broilers are basically positive relations. Previously, under the influence of African swine fever, consumption of chicken in China has risen sharply, lifting the industry prosperity index, raising the price of broiler chickens, and pushing up the price of the breeding end. In the second half of 2019, the pork price gradually fell down, which once brought the loss of broiler farming.

Today, under the double influence of the African swine fever and the new crown epidemic situation, China's broiler industry and pig industry both come down in the "downturn".

In a previous industry forum, Qiu Jiahui, vice president of Liaoning Hefeng pastoral industry Limited by Share Ltd, predicted that the production of white feather broilers dropped by about 30%, of which the reduction of non one-stop dragons was larger than that of one-stop enterprises, and the reduction of small companies was far larger than that of large companies. In the supply side, according to the statistics of the white feather broiler alliance, it is estimated that the annual sales of broilers will drop by 5%.

However, these effects are temporary. A research report from the Nong's Research Institute shows that China is the third largest broiler producer in the world, and is next only to the United States and Brazil. Basically, the total amount can be self-sufficient. In terms of consumption, between 2010 and 2018, it was about 11 million tons -1400 million tons. But the broiler industry in China is small-scale, regional and seasonal. However, the concentration level of culture and processing in broiler industry is low. The broiler chicken enterprise group has become a direction of current development.

"Shuanghui development group oriented industrial chain development mode will also be a mainstream development mode." Changjiang Securities an agricultural researcher also pointed out that in 2019, white feather broiler and pig production capacity was at a historic low level. Especially with the landing of environmental protection policy, the concentration degree at the breeding end would be a trend. For the back-end processing business, the self sufficiency rate of raw materials was improved. And backward production capacity is accelerated to eliminate, industry consolidation speed up, large and medium-sized enterprises face greater integration opportunities and advantages.

In the 2019 performance briefing, Ma Xiangjie also pointed out that in 2019, combined with the industry situation, the total price of meat products increased by about 20%. This allows Shuanghui development to produce a good report card. The company's 2019 annual report shows that during the period, Shuanghui developed 13 million 200 thousand slaughtered pigs, down from the same period. 19.04% The sales volume of fresh frozen meat and meat products was 3 million 90 thousand tons, down compared with the same period last year. 1.47% The total operating income reached 60 billion 300 million yuan, up from the same period last year. 23.43% The net profit attributable to shareholders of the parent company was 5 billion 400 million yuan, up from the same period last year. 10.7% 。

"Overall gross profit margin has declined, and net profit growth is less than revenue growth. Slaughtering volume has declined, indicating that Shuanghui has also been affected by the pig cycle," the researchers pointed out, but profitability has been increased to the capital of its expansion, and compared with peers, this industry chain development model will enable enterprises to increase risk resistance capability.

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