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]
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