立华股份-20240801

Summary of the Conference Call for Lihua Co., Ltd. Company Overview - Company: Lihua Co., Ltd. - Date of Call: August 1, 2024 - Key Focus: Half-year financial results and operational outlook Key Points Financial Performance - The company achieved a significant turnaround with a profit of 575 million (5.75亿) in the first half of 2024, compared to previous losses [3] - Revenue increased by 12.7% year-on-year, despite a substantial decrease in feed costs [3] - The main business segments, including poultry and pig farming, experienced approximately 10% growth [4] Operational Insights - The number of yellow-feathered chickens raised showed steady growth, supported by improved production performance and reduced raw material costs [1] - The cost of pig farming has also improved significantly, with costs dropping from 17.0 (17块) to 14.8 (14.8块) per kilogram in the second quarter [8] - The company plans to increase pig output to over 1.2 million (120万) heads for the year, with 430,000 (43万) heads already achieved in the first half [7] Market Dynamics - The yellow-feathered chicken market is experiencing seasonal consumption patterns, with the second half of the year expected to account for over 50% of total consumption [17] - The company noted a decline in chicken prices in July compared to June, attributed to various factors including weather impacts and consumer behavior [18][19] - The overall market for yellow-feathered chickens is stable, with expectations for continued demand during the upcoming Mid-Autumn Festival and National Day [20] Industry Trends - The industry is witnessing a consolidation trend, with leading companies like Lihua and Wen's maintaining growth plans despite a generally low cycle in the market [27] - The average cost of production for yellow-feathered chickens has decreased significantly, with costs dropping from 6.3 (6.3块) to 5.9 (5.9块) per kilogram year-on-year [29] - The company anticipates stable raw material costs moving forward, supported by government policies promoting grain production [25] Future Outlook - Capital expenditures are expected to remain around 1 billion (十亿) annually, focusing on expanding production capacity and improving facilities [31][34] - The company plans to maintain a steady growth rate of 8% to 10% in the coming years, primarily driven by new company developments [32] - There is a cautious approach towards expanding pig farming capacity, with no immediate plans for cross-regional expansion [62] Additional Notes - The company declared a dividend of 0.30 (三毛) per share for the first time, reflecting its improved financial position [15] - The management emphasized the importance of maintaining quality and market share amidst changing consumer preferences and competitive pressures [41][42] This summary encapsulates the key insights and operational strategies discussed during the conference call, highlighting Lihua Co., Ltd.'s financial recovery, market positioning, and future growth plans.