粤海饲料20241030

Summary of the Conference Call Company Overview - The company, Yihai, was established in 1994 with a capital of 700 million. It is listed on the Singapore main board since February 2020 and specializes in the research, production, and sales of aquaculture feed. It is recognized as a national innovative enterprise and a leading group in the aquaculture feed industry in China [1][2]. Industry Performance - The aquaculture feed industry has faced challenges, with a reported 12% decline in sales volume year-on-year for the first three quarters of 2024, totaling over 670,000 tons. The third quarter alone saw a volume of 320,000 tons, down by over 8% [2][3]. - Revenue for the first three quarters was 4.5 billion, a decrease of 16.24% year-on-year, with the third quarter revenue at 2.091 billion, also down by 16.34% [3][4]. - The overall market for special aquaculture feed is expected to decline by over 20% in 2024, but Yihai has managed to outperform the market with a smaller decline [4]. Financial Performance - The company reported a negative operating profit of 400.87 million for the first three quarters, with a loss of 224 million in the third quarter, reflecting significant challenges in maintaining profitability [3][4]. - The gross profit margin has decreased, attributed to lower sales volume and increased production costs, particularly in raw materials [4][5]. Product and Market Dynamics - The company has a diverse product range covering various growth stages of aquatic animals, with a focus on shrimp and special feeds [1][2]. - Despite the overall decline in sales, certain products like tilapia and other fish have shown growth, with tilapia sales increasing by over 20% in the third quarter [8][9]. - The shrimp feed segment has faced challenges, with a reported decline of around 20% in sales volume [9][10]. Strategic Initiatives - Yihai is actively pursuing acquisitions to enhance its market position, including the purchase of stakes in companies related to feed additives and raw materials [11][12]. - The company emphasizes the importance of acquiring firms with strong competitive advantages and potential for future growth [12][13]. - Yihai is also focusing on improving its operational efficiency and financial management, particularly in accounts receivable, to mitigate risks associated with credit losses [27][31]. Future Outlook - The company anticipates a gradual recovery in the aquaculture feed market, driven by improving economic conditions and increased consumer demand [19][20]. - Yihai plans to continue its expansion in overseas markets, particularly in Vietnam, where it has begun constructing a new facility [20][24]. - The management believes that the competitive landscape will favor larger firms with better resources, and Yihai aims to strengthen its core competencies to compete effectively [32][33]. Key Risks - The company faces risks related to fluctuating raw material prices, particularly fishmeal and soybean meal, which are critical to feed production [6][19]. - The ongoing challenges in the aquaculture sector, including disease outbreaks and environmental factors, could impact production and sales [4][5]. Conclusion - Yihai is navigating a challenging market environment with a focus on strategic acquisitions, operational improvements, and market expansion. The management remains cautiously optimistic about future growth prospects while addressing current financial and operational challenges [35][36].