Wanlong Quit The Management Team After 37 Years At The Helm, And Wanzhou International Started The Intergenerational Inheritance

"This is a normal work adjustment." On August 12, at the 2021 performance announcement media conference of Wanzhou International (00288. HK), the chairman of the board of directors Wan Long commented on the round of management team adjustment he had just completed.

According to the announcement issued by Wanzhou International, Wanlong retains the position of chairman of the board of directors, but no longer serves as the CEO of the group. Guo Lijun, the former executive director of Wanzhou International, executive vice president and CFO of Wanzhou International, takes over the post. Wan Hongwei, the second son of Wanlong, takes over the vice chairman of Wanzhou International. In addition, Zhou Feng is the vice president of Wanzhou International Trade; Wang Dengfeng was appointed Vice President of Wanzhou International Management; Ms. Zhen is the CFO of Wanzhou International. According to the announcement, Wan Hongjian, former vice chairman of the board of directors of Wanzhou International and the eldest son of Wanlong, has no post in Wanzhou International. After this adjustment, Wanlong, which has been at the helm of Wanzhou International for 37 years, will withdraw from the front-line management team. Shuanghui international started the intergenerational inheritance after completing the transformation from a small processing factory in a small city to a global top 500 enterprise with the largest meat processing enterprise in the world.

Wanlong said at the briefing that Guo Lijun and WAN Hongwei have worked for the company for many years. The former is a qualified professional manager, and the latter has overseas experience. At the same time, they have worked for Wanzhou International for many years. "They are all qualified for the new appointment."

At the same time, Wanzhou International (00288. HK) also announced its mid-term performance in 2021 on the same day. The announcement showed that during the period, the company's revenue was $13.331 billion, up 6.8% year on year; EBITDA reached US $1.22 billion, down 0.7% year on year; Operating profit was US $920 million, down 0.5% year on year; Pretax profit was $820 million, down 2.4% year on year; The profit attributable to the owners of the company was 539 million US dollars, a year-on-year decrease of 2%; The basic earnings per share were 3.66 cents.

In response, Wanzhou International also said in its reply to the 21st century economic reporter that the performance in the first half of 2021 was basically in line with expectations“ Meat protein is an essential consumer goods. With the improvement of living standards, the meat consumption market will maintain a steady and long-term sustainable growth. At present, the company will continue to strengthen the integrated industrial chain and international advantages, optimize the product structure and other measures, so as to expand the market scale, improve the production efficiency, cope with various risks, and maintain the leading position in the industry. "

Prior to this, Wanzhou International's three new pig breeding projects in Fuxin, Nanning and Shaanxi, as well as Xihua and Fuxin poultry projects, have been rapidly promoted. "In recent years, Wanzhou has also implemented some mergers and acquisitions around pork business, mainly in Europe and North America." At the performance announcement meeting, the new CEO Guo Lijun said the same thing. So far, the company has accumulated dividends of $2.6 billion, of which, in the first half of this year, the dividend will be 0.05 Hong Kong dollars per share, which is expected to be distributed in September this year.

Meat products are still the core of profit contribution

The performance of Wanzhou International in the first half of the year was subdivided. The company's semi annual report showed that during the period, the company slaughtered 5.037 million pigs, up 53.8% year on year; The total sales volume of meat was 1.601 million tons, with a year-on-year increase of 7.0%. The sales volume of meat products was 1.614 million tons, with a year-on-year increase of 2.5%; Pork sales volume was 2.14 million tons, up 10.1% year on year.

In terms of profit contribution, in the first half of this year, Wanzhou International achieved an operating profit of 524 million US dollars, a year-on-year decrease of 4.7%. In the first half of the year, the core business of the company, meat products, accounted for 48.5% of the revenue and 88.7% of the profit, and the pork business accounted for 46.1% of the revenue and 8.4% of the profit. In terms of regions, China business contributed 40.9% of revenue and 57% of profits; The US business contributed 49.6% of revenue and 34.5% of profits; The European business contributed 9.5% of revenue and 8.5% of earnings. However, it is worth noting that during the period, the US pork business suffered a loss of US $17 million, a decrease of US $110 million over the same period last year, and the operating profit margin decreased by 2.6%.

According to the above data, meat products are still the core business and profit contribution main force of Wanzhou International“ At present, the impact of new crown pneumonia on the United States is weakening, and pig prices are picking up. " Guo Lijun said that it is expected that the business situation of the United States this year will meet the market expectations for the whole year.

However, the contribution of new products to Wanzhou International has been increasing. In the first half of this year, Wanzhou International achieved sales revenue of 1.84 billion US dollars, accounting for 12.44% of the sales revenue of meat products. Wanzhou International's reply also said that in the first half of this year, the sales volume of new products reached 70000 tons. Among the top ten main products, the three main products of spicy spicy spicy sausage, starless Wang Zhongwang and huoxuanfeng have reached the scale of more than 10000 tons per year. Among them, huoxuanfeng increased by 123%, spicy sausage increased by 69%, newly upgraded runkou xiangtianwang increased by 186%, and meatballs increased by 18 times, The growth rate of roasted (smoked) chicken was 8 times higher than that of the same period of last year, showing a great growth potential.

International resource allocation to cope with pig cycle

In 2013, Shuanghui International (then known as Shuanghui International) acquired Smith field, a U.S. meat company, through overseas financing. After this acquisition, Shuanghui group was renamed Wanzhou International in August 2014 and listed in Hong Kong“ After the listing, most of the debts have been paid off, and both sides have accelerated the pace of development. " Guo Lijun said that in the past few years, Shuanghui has continued to consolidate its leading position in China's meat industry, maintaining a leading competitive advantage in technological innovation, sales network, market share, brand value, etc., and the scale and profitability of its enterprises have continued to increase.

Guo Lijun explained that in the pork industry, China has a huge market and the United States has low-cost raw materials“ Since the acquisition of Smithfield by Shuanghui international overseas financing in 2013, the two sides have played a synergistic role in expanding US pork imports, which has led to the improvement of us export trade. "

This has become a sample for domestic enterprises to deal with the pig cycle.

After the merger and acquisition, Wanzhou International's industrial chain has been integrated and formed an international layout. "We can effectively resolve the impact of pig cycle through the natural hedging of upstream and downstream businesses and global resource allocation." In response to the 21st century economic report, Wanzhou International said that the market situation and the company's response in the past two years can be said to be a very good example.

Since the second half of 2018, due to the impact of African swine fever, China's pork production has been greatly reduced to more than 10 million tons, and the domestic market supply has been seriously affected. The price of pork in the market is affected by the decrease of pig source, which rises from normal 15 yuan / 500g up and down to over 30 yuan / 500g, with the highest over 40 yuan, seriously affecting residents' consumption. This period is also known as the "strongest pig cycle" in the market.

"In normal years, China's pig price is less than twice that of the United States, but in 2020, the price difference of pork in China will reach six times the highest." Wanzhou International said China strongly encouraged imports to curb the soaring pig prices in the domestic market. China's import of pork from the world increased from 2.14 million tons in 2018 to 5.57 million tons in 2020. In 2020, the state put in reserve meat 38 times, a total of 670000 tons, mainly imported pork.

Relying on Wanzhou's international resource advantages, Shuanghui increased the import of pork from Smithfield, the United States and Europe, and the import volume increased from 180000 tons in 2015 to 500000 tons in 2020“ Shuanghui not only uses imported meat to fill the domestic market demand gap, but also uses cheap imported pork to smooth the cost. From 2019 to 2020, domestic pork prices are high and slaughtering enterprises are struggling to survive. However, the operating profit of Shuanghui development will achieve the best performance in 2020 and the second best result in 2019. "

This synergy is also reflected in the financial data. Guo Lijun said that since the merger and acquisition in 2014, Shuanghui's operating revenue has increased from RMB 48 billion in 2014 to RMB 76.9 billion in 2020, an increase of 1.6 times. The operating profit of meat products increased by 1.5 times from RMB 3 billion in 2014 to RMB 4.45 billion in 2020, driving the total profit of the company to increase from RMB 5.7 billion in 2014 to RMB 8 billion in 2020.

However, it is worth noting that in China, the concentration of large-scale meat products enterprises is rapidly increasing. Behind Wanzhou International, the catchers are catching up.

In view of slaughtering and other fields, the rising star has a strong momentum. Wanzhou International said: "as the largest meat processing enterprise in China, Shuanghui has the advantages of industrial layout, industrial cooperation, Sino foreign cooperation, talent reserve, and sales network. The company will expand its purchasing network, develop pig breeding industry, make good use of both domestic and foreign resources, and give full play to the industry driving advantage, Actively participate in market competition and continue to expand the scale of export sales. "

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