长江商报消息 ●长江商报记者 汪静 德康农牧（02419.HK）股价创新高。 6月11日，德康农牧逆势走强，股价最高达96港元/股，创历史新高，收盘报91.75港元/股，涨幅 15.34%。 长江商报记者注意到，2025年以来，德康农牧股价狂飙，目前较年初低位上涨约257%。 就在6月9日，德康农牧发布公告，今年前5个月，公司共销售生猪429.71万头（其中商品肉猪405.17万 头），销售收入84.57亿元；共销售黄羽肉鸡3582.71万只，销售收入10.99亿元。 据了解，依托"公司+家庭农场"模式，德康农牧的生猪养殖成本较低，居行业第一梯队。券商分析，优 质猪企有望凭借低成本优势获取可观盈利。 年内股价大涨 二级市场上，今年以来，德康农牧走势强劲。6月11日，德康农牧盘中触及96港元/股，创历史新高，收 盘报91.75港元/股，涨幅15.34%。今年1月10日左右，其股价最低仅25.68港元/股，以此计算，其年内股 价累计上涨约257%。 股价上涨与公司业务表现向好有关。 6月9日，德康农牧发布公告，2025年5月，公司销售生猪86.94万头（其中商品肉猪83.99万头），销售收 入17亿元。商品肉猪销 ...

既有稳健基本面，同时后续增长可见度高，由此看养殖类公司十分值得重视。就拿这其中颇具代表性的德康农牧（02419）来说，公司长期 深耕于生猪及黄羽鸡养殖领域，2024年德康农牧的核心财务数据划出了陡峭的曲线，营收同比大增39%至225亿元，净利润更是成功转正并 超42亿元。 对于二级市场投资者而言，上市公司的财报向来是遴选投资标的的关键依据之一。恰值6月中旬，财报季已然翻篇。梳理过去几个月里上市 公司密集披露的"成绩单"，养殖业算是为数不多景气度向好的板块之一。不仅如此，结合消息面看，养殖业的预期似乎正更趋乐观。以生 猪养殖为例，据市场消息，近期有关部门组织会议，意在引导减少行业投机行为、稳定远期生猪价格。 | | 2024年 | 2023年 | | --- | --- | --- | | | 人民幣千元 | 人民幣千元 | | 收入 | 22,463,038 | 16,155,412 | | 除税前利潤/(虧損) | 4,201,795 | (1,991,781) | | 所得税 | (88) | (355) | | 年内利潤／(虧損)及全面收益總額 | 4,201,707 | (1,992,136) | 行 ...

证券研究报告 | 2025年06月10日 德康农牧（02419.HK） 优于大市 立足西南的畜禽养殖先锋，创新践行家庭农场养殖 公司简介：西南区域性畜禽养殖龙头企业，生猪与黄鸡出栏稳步扩张。德康 农牧拥有从饲料生产、育种、扩繁、养殖到销售生猪及黄羽鸡的整体产 业链。2024 年公司实现生猪出栏 878 万头，同比增长 24%，位列全国第 六；实现黄羽鸡出栏 8812 万羽，同比略减 0.7%，位列全国第三，未来 预计生猪及黄鸡出栏整体有望保持稳步增长趋势。公司持续推进屠宰等 食品加工项目投产，目标年屠宰 300+万头生猪，有望打开增长新空间。 行业分析：看好养殖景气延续，拥抱管理优秀龙头。1）生猪：重视低成本 企业市占率提升。当前产业扩张意愿不足，预计猪价景气有望维持。国内生 猪产业尚处效率竞争阶段，管理优秀的头部猪企有更强的成本管控，有望凭 借超额现金流实现更高的分红回报和更确定的份额提升。2）黄鸡：供给低 波动，有望率先受益消费复苏。供给侧，黄鸡产能预计维持低波动，需求 侧，黄鸡尤其是中速型、慢速型品种的消费属性相较其他禽类品种更高 端，且下游餐饮渠道占比较高，预计后续黄鸡需求或率先受益内需修复。 公司看 ...

Summary of Dekang Agriculture and Animal Husbandry Conference Call Company Overview - Dekang Agriculture and Animal Husbandry has achieved a compound annual growth rate (CAGR) of 59% over the past four years, ranking first among the top ten pig farming companies in China [2][3] - The company plans to reach a slaughter volume of 11 million pigs by 2025, potentially becoming the only listed pig farming company to exceed this threshold during the period from 2022 to 2025 [2][3] Core Business Model - Dekang employs an innovative "Company + Farmers" model, extending the breeding process to sows, which significantly reduces capital requirements and increases farmer returns, achieving a return on investment of 17%, well above the industry average [2][4][6] - The company has a production structure where self-breeding, first farm (piglet breeding), and second farm (sow breeding) account for 20%, 60%, and 20% of slaughter volume, respectively [4][5] Cost Efficiency and Competitive Advantage - Dekang has achieved a complete cost of less than 12.5 yuan per kilogram, significantly lower than the industry average of over 1 yuan per kilogram [7][12] - The feed-to-meat ratio has improved from 2.52 in 2021 to 2.48 in 2023, consistently below the industry average [11] - The company’s self-bred quality breeding pigs have national-leading performance, contributing to cost reduction and strengthening competitive advantages [11][12] Growth Potential and Market Strategy - Dekang's slaughter growth rate from 2019 to 2024 is projected at 60%, making it one of the fastest-growing listed companies [8][9] - The company anticipates that the number of breeding sows will support capacity expansion to 30 million pigs, with a regional strategy enhancing market attractiveness [8][9][15] - The company is targeting a slaughter volume of 15 million pigs by 2026, representing a 36% year-on-year growth [16] Financial Performance and Valuation - As of June 4, 2025, Dekang's market valuation is approximately 2,038 yuan per pig, which is below the average for leading companies in the A-share market [10][17] - The proportion of shares held through the Hong Kong-Shanghai Stock Connect has increased from 1.5% to 13.4% since 2024, indicating improved liquidity [10][17] Health Management and Technological Innovation - Dekang employs advanced health management practices, including comprehensive disease tracking and environmental design to enhance biosecurity [14] - The company has invested in digital management and health management technologies, which have proven effective during challenges such as the African swine fever outbreak [13][14] Conclusion - Dekang Agriculture and Animal Husbandry is positioned for strong future growth, supported by its innovative business model, cost efficiency, and strategic market expansion plans [15][16]

Core Viewpoint - CICC maintains the earnings forecast for Dekang Animal Husbandry (02419) and raises the target price by 57% to HKD 66, indicating a 15% upside potential from the current price, while maintaining an outperform rating for the industry [1] Group 1: Business Model - Dekang adopts a "company + farmer" model and has pioneered the second farm sow breeding model, implementing a strategy to densify in the southwestern region [2] - The company is projected to have a slaughter volume of 8.78 million in 2024 and 11 million in 2025, ranking fourth among listed pig companies and sixth in the industry [2] - The asset per head for Dekang is estimated at RMB 1,537, compared to RMB 2,317 for industry leaders, with the second farm's return on assets (ROA) at 17% in the first half of 2023 [2] Group 2: Cost Advantage - Dekang leads the industry in cost efficiency, with total costs projected to be below RMB 14.0 and RMB 12.5 per kilogram in 2024 and Q1 2025, respectively, compared to the industry average of RMB 15.0-15.5 and RMB 13.0-13.5 [3] - The low cost is attributed to technological empowerment in breeding and feed nutrition, as well as strict health management and efficient digital management [3] - The company is expected to achieve a return on equity (ROE) of 38% in 2024, the highest among listed pig companies [3] Group 3: Growth Potential - Dekang's slaughter volume CAGR from 2020 to 2024 is 59%, the highest among the top ten pig companies, with a forecast of reaching 11 million heads in 2025 [4] - The company is expected to maintain strong growth momentum, supported by a model that combines penetration potential and expansion capability, with a projected capacity of 30 million heads in the long term [4] Group 4: Valuation - Dekang's current valuation remains low, with an estimated market value of RMB 1,365 per head, indicating a potential increase of 39% compared to the industry average and 78% compared to Muyuan [5] - The company's fundamentals are improving liquidity, with an average turnover rate of 1% and an average daily trading volume of RMB 50 million as of May 19 [5]

Financial Performance - The company achieved a revenue of approximately RMB 22.46 billion in 2024, representing a year-on-year growth of 39.0%[8]. - Net profit for the year was approximately RMB 4.20 billion, a significant recovery from a loss of RMB 1.99 billion in 2023[8]. - The company's revenue from the pig segment reached RMB 18,271.6 million in 2024, representing a year-on-year growth of 49.1% due to continuous technological empowerment and efficient team management[43]. - The overall revenue for 2024 was RMB 22,463.0 million, an increase of 39.0% from RMB 16,155.4 million in 2023, primarily driven by growth in the pig segment[50]. - The fair value profit before biological asset adjustment was RMB 3,297.4 million in 2024, compared to a loss of RMB 1,278.5 million in 2023, driven by increased pig prices and reduced production costs[42]. - The net profit after biological asset adjustment totaled RMB 4,201.7 million in 2024, a significant recovery from a net loss of RMB 1,992.1 million in 2023[42]. - The overall gross margin improved significantly from 0.7% in 2023 to 21.7% in 2024, attributed to rising pig prices and cost reduction measures[52]. - The sales cost for 2024 was RMB 17,597.7 million, a 9.7% increase from RMB 16,035.7 million in 2023, mainly due to increased pig sales volume[51]. - The EBITDA (before fair value adjustment) for 2024 was RMB 4,624.3 million, a significant increase from RMB 9 million in 2023[65]. Production and Sales - The company sold 8,544,396 heads of commercial pigs in 2024, with an average selling price of RMB 2,193 per head, compared to 6,659,735 heads sold in 2023 at RMB 1,832[8]. - The poultry segment, particularly yellow feathered chickens, sold 88,120,210 heads in 2024, maintaining an average price of RMB 36.1[8]. - The company sold approximately 88.12 million yellow feathered chickens in 2024, maintaining stable production capacity compared to the previous year[48]. - The poultry segment revenue was RMB 3,275.8 million in 2024, a year-on-year decrease of 1.7% due to slight declines in both price and sales volume[48]. Corporate Governance - The board of directors emphasizes maintaining high corporate governance standards to protect shareholder interests and enhance corporate value[87]. - The board consists of a balanced mix of executive and non-executive directors, ensuring strong independent judgment and oversight[92]. - The company has established an independent board evaluation mechanism to enhance board effectiveness and shareholder protection[103]. - The audit committee held three meetings during the reporting period and met with external auditors three times to review the company's financial reports and accounts[112]. - The company has established three committees: the audit committee, remuneration committee, and nomination committee, to oversee specific areas of the company's affairs[109]. Research and Development - The company has entered into a technical cooperation agreement with the Chinese Academy of Agricultural Sciences to enhance research and development capabilities[11]. - The management team consists of 186 R&D members, with about 60.8% holding a master's degree or higher, ensuring strong expertise in breeding, feed, nutrition, and health management[46]. - The company emphasizes talent as a fundamental driver, combining technology and management to foster innovation and growth[26]. Risk Management and Compliance - The company has a risk management and internal control system in place, which has been reviewed and deemed effective by the board during the reporting period[141]. - The company has implemented strict biosecurity measures to mitigate disease risks in livestock, ensuring no significant losses due to diseases in 2024[82]. - The company has adopted an anti-corruption policy to prevent internal corruption and bribery, with open internal reporting channels for employees[143]. Shareholder Engagement and Dividends - In 2024, the company plans to distribute cash dividends of approximately RMB 350 million to all shareholders[26]. - The company reported a proposed final dividend of RMB 0.90 per share for the year ending December 31, 2024, compared to no dividend in 2023, pending shareholder approval at the annual general meeting on April 22, 2025[172]. - The company emphasizes effective communication with shareholders through various channels, including annual general meetings and investor relations activities[155]. Sustainability and ESG Initiatives - The company is committed to investing in ESG initiatives, following national fertilizer reduction action plans to promote sustainable agricultural development[85]. - The company has established a comprehensive ESG policy and has not faced any significant fines or penalties related to health, safety, or environmental regulations during the reporting period[181]. Future Plans and Strategies - By 2025, the company aims to achieve new milestones through efficiency improvements, cost reductions, and high-quality development, while strictly controlling various risks[84]. - The company will enhance its disease prevention system and invest in biosecurity to improve breeding environment standards and response capabilities[84]. - The company will focus on expanding its market share and sales network in Sichuan, with Chengdu, Meishan, and Yibin as core bases[85].

Financial Performance - Total revenue for the year ended December 31, 2024, reached RMB 22,463,038 thousand, a significant increase of 39% compared to RMB 16,155,412 thousand in 2023[5] - The company reported a profit before tax of RMB 4,201,795 thousand for 2024, recovering from a loss of RMB 1,991,781 thousand in 2023[5] - The company achieved a gross profit of RMB 4,865,291 thousand in 2024, a substantial increase from RMB 119,673 thousand in 2023[7] - Basic and diluted earnings per share for 2024 were RMB 10.55, a recovery from a loss of RMB 4.88 per share in 2023[5] - The gross profit margin improved significantly from 0.7% in 2023 to 21.7% in 2024, mainly due to rising pig prices and cost reduction measures[64] - The company recorded a profit of RMB 3,297.4 million before fair value adjustments of biological assets in 2024, compared to a loss of RMB 1,278.5 million in 2023[70] - The EBITDA (before fair value adjustments) for 2024 was RMB 4,624.3 million, a significant increase from RMB 9 million in 2023[76] Revenue Breakdown - Sales of live pigs and related products reached RMB 18,271,557,000, up from RMB 12,254,966,000, representing a 49% growth[16] - The revenue from the pig segment in 2024 was RMB 18,271.6 million, representing a year-on-year growth of 49.1%, driven by technological empowerment and efficient team management[48] - The poultry segment revenue in 2024 was RMB 3,275.8 million, a decrease of 1.7% compared to the previous year, attributed to slight declines in both price and sales volume[57] - The auxiliary products segment generated revenue of RMB 915.7 million in 2024, reflecting a 61.4% year-on-year growth, driven by the expansion of slaughtering operations[60] Assets and Liabilities - The total assets less current liabilities increased to RMB 13,992,701 thousand in 2024, compared to RMB 9,243,612 thousand in 2023[8] - Cash and cash equivalents rose significantly to RMB 4,491,952 thousand in 2024, up from RMB 2,544,830 thousand in 2023[8] - The company's net assets were approximately RMB 8,585.3 million, up from RMB 3,855.1 million as of December 31, 2023, indicating a significant increase of 123.3%[81] - The company's net debt was approximately RMB 2,253.2 million as of December 31, 2024, a decrease of 59.1% from RMB 5,533 million as of December 31, 2023, resulting in a net debt to equity ratio of 26.2% compared to 143.5% in the previous year[81] Dividends and Shareholder Returns - The company declared a dividend of RMB 0.90 per share for the year 2024, marking a return to profitability[5] - The company proposed a final dividend of RMB 0.90 per share for the year ending December 31, 2024, compared to no dividend in 2023[32] - The company has proposed a final dividend of RMB 0.90 per share for the year ended December 31, 2024, subject to shareholder approval at the annual general meeting on April 22, 2025[103] Operational Highlights - The number of market pigs sold increased to 8,544,396 heads in 2024, up from 6,659,735 heads in 2023, representing a growth of approximately 28%[3] - Average selling price for market pigs rose to RMB 2,193 per head in 2024, compared to RMB 1,832 per head in 2023, reflecting an increase of about 20%[3] - The company’s vertical integration model in pig and poultry farming allows for high control over food quality and safety throughout the supply chain[35] - The company has established a dynamic raw material database for feed formulation, allowing for effective cost control amid rising raw material prices[52] - The company has implemented strict biosecurity measures to mitigate disease risks in livestock, which is critical for maintaining production capacity and consumer confidence[94] Employee and Compensation - Employee costs increased to RMB 1,559,226,000 in 2024, up 33% from RMB 1,174,243,000 in 2023[22] - The total number of employees increased to 10,475 as of December 31, 2024, from 9,854 in 2023, reflecting a growth in workforce to support business operations[91] - Employee compensation totaled approximately RMB 1,559.2 million in 2024, an increase of 33% from RMB 1,174.2 million in 2023, aligning with market trends and performance[91] Future Outlook and Strategy - The company aims to achieve a new milestone by enhancing efficiency, reducing costs, and focusing on high-quality development in the pig farming sector, poultry sector, and auxiliary products sector by 2025[98] - The company plans to optimize pig farming scale and improve disease prevention systems to ensure a balanced supply and demand in the pig farming sector[99] - In the poultry sector, the company will develop innovative high-performance poultry breeds suitable for the southwestern market of China and strengthen customer relationships in the southern market to maintain profitability[99] - The company will continue to invest in ESG initiatives, including the "Hundred Villages, Million" project, to promote sustainable agricultural development[99] Governance and Compliance - The audit committee, consisting of three members, reviewed the annual performance and consolidated financial statements for the year ending December 31, 2024[115] - The audit firm KPMG confirmed that the figures in the preliminary performance announcement are consistent with the audited consolidated financial statements for the year[116] - The board expressed gratitude to customers, suppliers, and shareholders for their support and trust[123] - The board of directors includes both executive and independent non-executive members, ensuring a diverse governance structure[125]

Summary of Conference Call Records Company Overview - **Company**: 德康农牧 (DeKang Agriculture and Animal Husbandry) - **Industry**: Agriculture, specifically focused on pig farming and related operations Key Points and Arguments Business Model and Financial Performance - **Asset-Light Model**: 德康农牧 operates on a light asset model, which minimizes capital investment and leads to lower costs and higher returns on equity (ROE) [1][2] - **Cost Efficiency**: The company has achieved the lowest operational costs in the industry, with costs dropping significantly throughout the year. As of October, the total cost was reported to be below 12.9 RMB per kg [3][4] - **Production Growth**: The company has seen substantial growth in production, with output expected to reach approximately 870,000 heads this year, up from 1.3 million heads in 2020. Future projections estimate production of 1.1 to 1.2 million heads by 2025 [3][5] Market Position and Valuation - **Low Valuation**: 德康农牧's market capitalization is around 1.2 billion RMB, making it one of the lowest valued companies in the A+H share market. This low valuation, combined with strong fundamentals, suggests significant potential for valuation recovery [2][6] - **Growth Potential**: The company is positioned to capture further growth in the market, with a focus on high-quality growth rather than capital-intensive models [2][6] Cost Management and Future Outlook - **Cost Reduction Strategy**: The company has implemented a strategy to further reduce costs, with a target of achieving costs below 12.6 RMB per kg in the future. The management is confident in their ability to maintain cost efficiency while scaling production [4][5] - **Management Preparedness**: 德康农牧 is investing in management training and system improvements to prepare for future growth, aiming for production levels of 2 to 3 million heads in the long term [5][6] Financial Health - **Cash Flow and Debt Management**: The company has maintained a strong cash flow and a favorable debt structure, with a current asset-to-liability ratio improving significantly. As of October, cash reserves exceeded loans [6][8] - **Profitability**: The company reported a profitable situation with a selling price of approximately 18 RMB per kg against a cost of 12.9 RMB per kg, indicating a healthy profit margin [15][29] Industry Context - **Market Dynamics**: The overall market for pig farming is experiencing fluctuations, with supply and demand dynamics affected by seasonal changes and external factors such as weather conditions. The company anticipates a challenging market environment but remains optimistic about its cost advantages [28][30] - **Future Projections**: The company expects to maintain a competitive edge due to its low-cost structure and efficient management practices, projecting continued growth in production and profitability [29][36] Additional Important Information - **Management Changes**: The company is undergoing management reforms to enhance operational efficiency and prepare for future growth [5][6] - **Investment in Technology**: There is a focus on technological advancements in breeding and management processes to further improve productivity and cost efficiency [5][6] - **Long-term Planning**: The company has set ambitious long-term goals, including a target of 30 million heads by 2027, reflecting confidence in its growth strategy [8][9] This summary encapsulates the key insights from the conference call, highlighting the company's strategic focus, financial performance, and market positioning within the agricultural sector.

Financial Performance - Revenue for the six months ended June 30, 2024, reached RMB 9,407,081 thousand, a significant increase from RMB 7,504,846 thousand in the same period of 2023[3] - Profit before tax for the six months ended June 30, 2024, was RMB 1,791,714 thousand, compared to a loss of RMB 2,352,631 thousand in the same period of 2023[3] - Net profit attributable to equity shareholders of the company for the six months ended June 30, 2024, was RMB 1,766,453 thousand, a substantial improvement from a loss of RMB 2,181,210 thousand in the same period of 2023[3] - Basic and diluted earnings per share for the six months ended June 30, 2024, were RMB 4.54, compared to a loss per share of RMB 6.03 in the same period of 2023[3] - The company's profit before fair value adjustment of biological assets for the six months ended June 30, 2024, was RMB 363,125 thousand, compared to a loss of RMB 1,117,560 thousand in the same period of 2023[3] - The company achieved a net profit of RMB 1,791 million in the first half of 2024 after biological asset fair value adjustment, compared to a net loss of RMB 2,353 million in the same period of 2023[16] - Adjusted net profit for the first half of 2024 was RMB 363.125 million, compared to a loss of RMB 1,117.56 million in the same period of 2023[25] - EBITDA for the first half of 2024 was RMB 2,461.831 million, a significant improvement from a loss of RMB 1,712.708 million in the first half of 2023[25] - Revenue for the six months ended June 30, 2024, increased to RMB 9,407,081 thousand, up from RMB 7,504,846 thousand in the same period in 2023, reflecting a growth of approximately 25.4%[60] - Gross profit for the period was RMB 1,165,948 thousand, a significant improvement from a gross loss of RMB 387,606 thousand in 2023[60] - Operating profit for the six months ended June 30, 2024, was RMB 2,015,268 thousand, compared to an operating loss of RMB 2,126,152 thousand in the same period in 2023[60] - Net profit attributable to equity shareholders of the company was RMB 1,766,453 thousand, a substantial recovery from a net loss of RMB 2,181,210 thousand in 2023[60] - Earnings per share for the six months ended June 30, 2024, were RMB 4.54, a significant improvement from a loss per share of RMB 6.03 in the same period in 2023[60] - The company's comprehensive pre-tax profit was RMB 1,791,714 thousand in 2024, compared to a loss of RMB 2,352,631 thousand in 2023[78] - The company reported a net profit attributable to equity shareholders of RMB 1,766,453 thousand in the first half of 2024, compared to a loss of RMB 2,181,210 thousand in the same period of 2023[85] Segment Performance - The company's pig segment revenue reached RMB 7,449 million in the first half of 2024, a year-on-year increase of 27.5%[16] - The average selling price of pigs in the first half of 2024 increased by 4.1% compared to the same period in 2023[16] - The average cost of pigs decreased by 14.4% year-on-year in the first half of 2024 due to cost management and lower feed prices[16] - The company's poultry segment saw a 7.1% increase in average selling price for chickens in the first half of 2024 compared to 2023[16] - The average cost of chickens decreased by 11.9% year-on-year in the first half of 2024[16] - The poultry segment revenue for the first half of 2024 was RMB 1,543 million, a year-on-year increase of 0.9%, driven by a 7.1% increase in average selling price and an 11.9% decrease in average cost[19] - The auxiliary products segment revenue surged 211.5% year-on-year to RMB 414 million in the first half of 2024, primarily due to the launch of fresh meat business[20] - Total revenue for the first half of 2024 increased by 25.3% year-on-year to RMB 9,407 million, mainly driven by growth in the swine segment[20] - Revenue from sales of pigs and related products increased to RMB 7,449,257 thousand in 2024, up from RMB 5,842,287 thousand in 2023, representing a growth of 27.5%[72] - Revenue from sales of poultry and related products slightly increased to RMB 1,543,403 thousand in 2024 from RMB 1,529,529 thousand in 2023, a growth of 0.9%[72] - Revenue from sales of auxiliary products surged to RMB 414,421 thousand in 2024 from RMB 133,030 thousand in 2023, a significant increase of 211.5%[72] - Total external customer revenue for the company reached RMB 9,407,081 thousand in 2024, up from RMB 7,504,846 thousand in 2023, a growth of 25.3%[72] - The company's reportable segment profit for pig sales was RMB 1,023,486 thousand in 2024, compared to a loss of RMB 303,746 thousand in 2023[77] - The company's reportable segment profit for poultry sales was RMB 192,100 thousand in 2024, compared to a loss of RMB 88,529 thousand in 2023[77] - The company's reportable segment profit for auxiliary products was RMB 137,083 thousand in 2024, up from RMB 95,166 thousand in 2023[77] - Total reportable segment profit for the company was RMB 1,352,669 thousand in 2024, compared to a loss of RMB 297,109 thousand in 2023[77] Cost and Margin Analysis - Gross margin improved significantly from -5.2% in the first half of 2023 to 12.4% in the first half of 2024, attributed to higher swine and poultry prices and reduced costs[21] - The average cost of pigs decreased by 14.4% year-on-year in the first half of 2024 due to cost management and lower feed prices[16] - The average cost of chickens decreased by 11.9% year-on-year in the first half of 2024[16] - Financial costs decreased to RMB 223,155 thousand in the first half of 2024, down from RMB 226,479 thousand in the same period of 2023[81] - Employee costs rose to RMB 675,938 thousand in the first half of 2024, up from RMB 542,875 thousand in the same period of 2023[82] - Depreciation expenses for owned property, plant, and equipment increased to RMB 284,000 thousand in the first half of 2024, compared to RMB 246,088 thousand in the same period of 2023[83] - R&D expenses slightly decreased to RMB 111,760 thousand in the first half of 2024, down from RMB 114,944 thousand in the same period of 2023[83] Cash Flow and Liquidity - Cash and cash equivalents increased to RMB 3,490 million as of June 30, 2024, up from RMB 2,545 million at the end of 2023[24] - The company's current ratio improved to 1.0 as of June 30, 2024, compared to 0.8 at the end of 2023[24] - Net cash generated from operating activities in the first half of 2024 was RMB 1,513 million, compared to RMB 32 million in the same period of 2023[26] - Operating cash flow for the six months ended June 30, 2024, was RMB 1,512,675 thousand, a significant increase from RMB 31,830 thousand in the same period in 2023[67] - Net cash used in investing activities for the six months ended June 30, 2024, was RMB 260,462 thousand, slightly higher than RMB 256,291 thousand in the same period in 2023[67] - Net cash used in financing activities for the six months ended June 30, 2024, was RMB 314,918 thousand, compared to RMB 173,043 thousand in the same period in 2023[67] - Cash and cash equivalents increased by RMB 937,295 thousand to RMB 3,489,545 thousand as of June 30, 2024[67] - The company's cash and cash equivalents increased to RMB 3,489,545 thousand as of June 30, 2024, up from RMB 2,544,830 thousand as of December 31, 2023[62] - Cash and cash equivalents increased to RMB 4,065,712 thousand as of June 30, 2024, from RMB 3,044,625 thousand as of December 31, 2023[97] Debt and Capital Structure - Total bank loans and other borrowings as of June 30, 2024, were RMB 6,399 million, with interest rates ranging from 2.55% to 5.70%[27] - Net debt to equity ratio decreased to 102.1% as of June 30, 2024, from 156.5% as of December 31, 2023[27] - Capital expenditures for the first half of 2024 were RMB 259 million, a decrease from RMB 529 million in the same period of 2023[31] - The net interest-bearing debt to net assets ratio decreased to 163.9% as of June 30, 2024, from 338.9% as of June 30, 2023[29] - Interest-bearing borrowings increased to RMB 6,399,371 thousand as of June 30, 2024, from RMB 6,099,089 thousand as of December 31, 2023[101] - Lease liabilities increased to RMB 2,859,249 thousand as of June 30, 2024, from RMB 2,478,557 thousand as of December 31, 2023[102] Biological Assets and Fair Value Adjustments - The fair value of biological assets as of June 30, 2024, was RMB 6,631 million, up from RMB 4,923 million as of December 31, 2023[33] - The net impact of biological asset fair value adjustments on profit for the first half of 2024 was a gain of RMB 1,428 million, compared to a loss of RMB 1,235 million in the same period of 2023[33] - The total value of biological assets increased to RMB 6,630,839 thousand as of June 30, 2024, up from RMB 4,922,869 thousand at the beginning of the year[87] - The fair value of biological assets increased by RMB 655,882,000 if market prices and replacement costs rose by 10% as of June 30, 2024[92] - The fair value of biological assets decreased by RMB 668,619,000 if market prices and replacement costs fell by 10% as of June 30, 2024[92] Market and Industry Trends - China's pig slaughter volume in the first half of 2024 was 363.95 million heads, a year-on-year decrease of 3.1%[14] - China's pork production in the first half of 2024 was 29.81 million tons, a year-on-year decrease of 1.7%[14] - The average pig price in China rose to RMB 18.36 per kilogram at the end of June 2024, a 25.0% increase from the end of 2023[14] - China's breeding sow inventory at the end of June 2024 was 40.38 million heads, a year-on-year decrease of 6.0%[14] - The company's operating performance is significantly affected by the cyclical fluctuations in the prices of pigs and poultry products, as well as the prices of feed and raw materials[40] Corporate Governance and Shareholder Information - The company has adopted the principles and code provisions of the Corporate Governance Code as the benchmark for its corporate governance practices[43] - The company submitted an application to the China Securities Regulatory Commission (CSRC) on December 25, 2023, to convert certain domestic shares into H-shares, and received the filing notice on January 17, 2024, approving the conversion of up to 61,944,501 domestic shares (approximately 15.93% of the total issued share capital) into H-shares[44] - On January 22, 2024, the Hong Kong Stock Exchange approved the listing and trading of 61,944,501 H-shares, and the conversion was completed on January 30, 2024, with the shares commencing trading on January 31, 2024[44] - As of June 30, 2024, Mr. Wang Degen, a director, held 11,915,198 domestic shares (4.57% of total shares) and 11,666,269 H-shares (9.11% of H-shares) as a beneficial owner, and controlled 119,400,900 domestic shares (45.78% of total shares) through controlled entities[45] - Mr. Wang Dehui, another director, held 5,957,599 domestic shares (2.28% of total shares) and 5,596,243 H-shares (4.37% of H-shares) as a beneficial owner, and controlled 5,596,242 domestic shares (2.15% of total shares) through controlled entities[45] - Mr. Yao Hailong, a director, held 2,978,799 domestic shares (1.14% of total shares) and 977,879 H-shares (0.76% of H-shares) as a beneficial owner, and held 977,879 domestic shares (0.37% of total shares) through an employee持股平台[45] - Mr. Hu Wei, a director, held 8,936,398 domestic shares (3.43% of total shares) as a beneficial owner[45] - As of June 30, 2024, the total issued share capital of the company was 388,875,636 shares[45] - On January 30, 2024, 4,734,536 domestic shares and 861,707 domestic shares held by employee持股平台众诚金宜 and同创德恒, respectively, were converted into H-shares as part of the H-share全流通 process[46] - The company disclosed that no other significant post-reporting period events occurred as of the date of the interim report[44] - Desheng Ronghe holds 119,400,900 domestic shares, representing 45.78% of the relevant shares and 30.70% of the total share capital[48] - Zhang Qiang holds 131,316,098 domestic shares, representing 50.35% of the relevant shares and 33.77% of the total share capital[48] - Chen Yuxin holds 44,681,989 H-shares, representing 34.89% of the relevant shares and 11.49% of the total share capital[48] - Guangkong Mailang holds 37,570,873 domestic shares, representing 14.41% of the relevant shares and 9.66% of the total share capital[48] - Guangkong Huiling Investment (Shanghai) Co., Ltd. holds 40,277,640 domestic shares, representing 15.44% of the relevant shares and 10.36% of the total share capital[48] - Everbright Shenzhen holds 52,556,983 domestic shares, representing 20.15% of the relevant shares and 13.52% of the total share capital[48] - China Everbright Limited holds 52,556,983 domestic shares, representing 20.15% of the relevant shares and 13.52% of the total share capital[48] - Honorich Holdings Limited holds 52,556,983 domestic shares, representing 20.15% of the relevant shares and 13.52% of the total share capital[48] - China Everbright Group holds 52,556,983 domestic shares, representing 20.15% of the relevant shares and 13.52% of the total share capital[48] - Central Huijin Investment holds 52,556,983 domestic shares, representing 20.15% of the relevant shares and 13.52% of the total share capital[48] Fund Utilization and Capital Commitments - Global offering net proceeds amounted to HKD 952.5 million, with HKD 601.9 million (63.2%) utilized as of June 30, 2024, leaving HKD 350.6 million unused[54] - Funds allocated for expanding existing pig and yellow-feathered broiler farming: HKD 476.3 million, with HKD 381 million utilized and HKD 95.3 million remaining[54] - Funds allocated for food processing business development: HKD 142.9 million, with HKD 56.6 million utilized and HKD 86.3 million remaining[54] - Funds allocated for R&D and IT systems: HKD 95.3 million, with HKD 50.7 million utilized and HKD 44.6 million remaining[54] - Funds allocated for strategic investments or potential acquisitions: HKD 95.3 million, with none utilized as of June 30, 2024[54] - Funds allocated for repayment of bank loans: HKD 47.6 million, fully utilized[54] - Funds allocated for working capital and general corporate purposes: HKD 95.1 million, with HKD 66 million utilized and HKD 29.1 million remaining[54] - Total capital commitments as of June 30, 2024, were RMB 467 million, up from RMB 308 million as of December 31, 2023[32] - Unprovided capital commitments increased by RMB 158,375 thousand to RMB 466,741 thousand as of June

Financial Performance - For the six months ended June 30, 2024, the company sold 3,925,495 heads of commodity pigs, an increase from 3,111,692 heads in the same period of 2023, representing a growth of approximately 26.1%[2] - Revenue for the six months ended June 30, 2024, was RMB 9,407,081 thousand, up 25.3% from RMB 7,504,846 thousand in the same period of 2023[3] - The company reported a profit before tax of RMB 1,791,714 thousand, a significant recovery from a loss of RMB 2,352,631 thousand in the prior year[3] - Basic and diluted earnings per share for the period were RMB 4.54, compared to a loss of RMB 6.03 per share in the same period of 2023[3] - The gross profit for the six months ended June 30, 2024, was RMB 1,165,948 thousand, compared to a gross loss of RMB 387,606 thousand in the same period of 2023[5] - The fair value change of biological assets for the period was RMB 1,428,256 thousand, recovering from a loss of RMB 1,235,470 thousand in the previous year[5] - For the six months ended June 30, 2024, the company reported revenue of RMB 9,407,081,000, a 25.4% increase from RMB 7,504,846,000 for the same period in 2023[10] - The sales of live pigs and related products generated RMB 7,449,257,000, up from RMB 5,842,287,000, reflecting a growth of 27.5%[10] - The net profit after fair value adjustment of biological assets for the first half of 2024 was RMB 1,791 million, compared to a net loss of RMB 2,353 million in the same period of 2023[28] - The overall gross margin improved from -5.2% in the first half of 2023 to 12.4% in the first half of 2024, due to rising prices and effective cost management[35] Assets and Liabilities - The company's non-current assets increased to RMB 11,235,532 thousand as of June 30, 2024, from RMB 10,807,632 thousand at the end of 2023[6] - Current biological assets rose significantly to RMB 5,374,938 thousand from RMB 3,846,424 thousand, indicating a growth of approximately 39.8%[6] - The company's cash and cash equivalents increased to RMB 3,489,545 thousand from RMB 2,544,830 thousand, reflecting a growth of approximately 37.0%[6] - The net current liabilities improved to RMB (205,411) thousand from RMB (1,564,020) thousand, indicating a significant reduction in liabilities[6] - The company's net asset value increased to RMB 5,649,944,000 as of June 30, 2024, compared to RMB 3,855,063,000 as of December 31, 2023, marking a growth of 46.5%[7] - Total equity rose to RMB 5,649,944,000, up from RMB 3,855,063,000, indicating a significant increase of 46.5%[7] - As of June 30, 2024, the company's total bank loans and other borrowings amounted to approximately RMB 6,399 million, an increase from RMB 6,099 million as of December 31, 2023[47] - The net debt to equity ratio decreased to 102.1% as of June 30, 2024, from 156.5% as of December 31, 2023, reflecting improved financial stability[49] Operational Highlights - The company's slaughterhouses in Yibin and Meishan have commenced operations, with an annual slaughter capacity exceeding 2 million pigs, expanding the business into fresh meat production[24] - The company has implemented a vertical integration model covering the entire supply chain from feed production to sales, enhancing control over food quality and safety[20] - The breeding stock's genetic performance has improved significantly over the years, contributing to better production efficiency in the pig farming segment[21] - The company’s business segments include pig farming, poultry, and auxiliary products, with a focus on optimizing breeding and production processes[20] - The pig segment revenue for the first half of 2024 was RMB 7,449 million, reflecting a year-on-year growth of 27.5%[29] - The poultry segment revenue was RMB 1,543 million in the first half of 2024, a 0.9% increase year-on-year, driven by a 7.1% rise in average selling prices[31] - The auxiliary products segment saw a revenue increase of 211.5% to RMB 414 million, attributed to the development of fresh meat business[32] Cost and Expenses - The company incurred employee costs of RMB 675,938,000 for the six months ended June 30, 2024, compared to RMB 542,875,000 for the same period in 2023, representing a rise of 24.5%[13] - The cost of biological assets sold was RMB 7,805,937,000, slightly up from RMB 7,750,529,000, reflecting a marginal increase of 0.7%[14] - The company’s finance costs totaled RMB 231,154,000 for the six months ended June 30, 2024, down from RMB 240,095,000 in the previous year, a decrease of 3.9%[12] - Research and development expenses were RMB 111,760,000, a slight decrease from RMB 114,944,000 in the same period last year, showing a decline of 2.8%[14] Corporate Governance - The company has established an audit committee to oversee financial reporting, risk management, and internal control systems[68] - The audit committee reviewed the unaudited interim financial statements for the six months ending June 30, 2024, and found existing systems effective and sufficient[69] - KPMG conducted a review of the interim financial results without any modifications, ensuring compliance with Hong Kong accounting standards[70] - The company emphasizes its commitment to high standards of corporate governance and compliance with applicable laws and regulations[65] Future Plans and Investments - The company aims to steadily expand core business capacity and increase production of yellow-feathered broilers, driving growth in both the pig and poultry segments[60] - The company plans to optimize feed formulas and precision feeding to reduce breeding costs while ensuring optimal growth conditions for pigs[61] - The net proceeds from the global offering amount to approximately HKD 952.5 million, with 50% allocated to expanding existing pig and yellow-feathered chicken breeding businesses[64] - 15% of the proceeds will be used to develop food processing businesses, amounting to approximately HKD 142.9 million[64] - 10% of the proceeds, approximately HKD 95.3 million, will be invested in R&D and information technology systems[64] Dividends and Share Capital - The company will not declare any interim dividend for the six months ending June 30, 2024, consistent with the previous period[63] - The company has submitted an application to convert approximately 61,944,501 domestic shares (about 15.93% of total issued share capital) into H-shares, which were approved for listing on January 22, 2024[62]