神农集团20251224

Summary of Shennong Group Conference Call Company Overview - Company: Shennong Group - Industry: Pig Farming Key Points and Arguments Production and Cost Targets - Expected Output: Shennong Group anticipates a production volume of 3.5 million pigs in 2025, with a focus on controlling total costs below 12 CNY/kg, aiming for 11.5 CNY/kg [2][6] - Regional Focus: The majority of output will be concentrated in Yunnan and the Guangxi and Guangdong regions, with an expected output of nearly 1 million pigs from these areas [2][7] Cost Management Strategies - Cost Reduction Measures: The company plans to lower farming costs through several strategies: - Improving PSY (Pigs Weaned per Sow per Year) to 30.3 heads, with a target of over 30 heads next year - Maintaining a feed-to-meat ratio around 2.45 - Achieving a survival rate exceeding 85% - Stabilizing weaning costs at approximately 270 CNY [2][4][9][8] Market Conditions and Price Forecast - Current Market Trends: The overall trend for pig prices is declining after a profitable period of about 18 months, with farmers experiencing losses for about a quarter [3] - Future Price Expectations: The average pig price for 2026 is expected to be weaker than in 2025, ranging between 12 to 13 CNY/kg, with no significant price rebound anticipated in the first half of the year [15] Production Indicators - Key Production Metrics: As of November, the total cost was 12 CNY/kg, with a weaning cost of 269 CNY per head and a PSY of 30.3 heads [4][8] Dependency on Contract Farming - Contract Farming Model: Currently, about 70% of production is through contract farming, with plans to increase this to 80% or even 90%. There are no plans for new self-built capacity [5][16] Financial Performance of Other Segments - Other Business Segments: - Feed sales have decreased, yielding only slight profits - Slaughtering operations generate annual profits in the tens of millions - The deep processing segment is currently in a strategic loss phase but aims for breakeven within five years [20] Disease Control and Impact - Disease Management: The company has maintained stable disease control, with minimal impact from African swine fever and blue ear disease on production [12][14] Capital Expenditure and Dividend Policy - Capital Expenditure: The budget for capital expenditure in 2026 is expected to remain stable without significant fluctuations [18] - Dividend Policy: Dividends will be considered annually based on operational performance, ensuring funds are available for shareholder needs [19] Regional Cost Differences - Cost Variations: There are minor differences in farming costs across regions, with the best facilities achieving costs below 11.5 CNY/kg, while average facilities maintain around 12 CNY/kg [11] Raw Material Price Considerations - Cost Targets and Raw Materials: The cost targets for 2026 are based on raw material prices remaining stable compared to 2025, with adjustments made if prices fluctuate significantly [22]