The leading enterprise in China's pig breeding industry - Muyuan Food Co., Ltd. is referred to as "Muyuan Co., Ltd.", *002714SZ) recently announced its 2023 annual performance forecast, indicating that the company may face its first annual loss since listing. According to the announcement, Muyuan expects the net profit loss attributable to shareholders of the parent company in 2023 to be between 3.9 billion yuan and 4.7 billion yuan, which is 132 percent of the profit in the same period last yearCompared with 6.6 billion yuan, it showed a sharp decline.
The main reason for this loss is that the pork market continues to be sluggish and the cost of breeding has risen, resulting in a negative profit per pig, according to market data estimates, each pig may lose more than 70 yuan. In addition, Muyuan shares also made a rare provision for asset impairment to cope with the impact of cyclical adjustments in the industry.
Despite the unprecedented operating pressure, the management of Muyuan Co., Ltd. revealed in the recent investor meeting that the company is still cautiously optimistic about the market situation this year, and has formulated a corresponding strategy to reduce costs and increase efficiency and expand market share planning. The company plans to improve its operating conditions and gradually restore profitability this year by improving the level of refined management, optimizing feed formulation, reducing costs, and accelerating the construction of modern farms.
At the same time, the secretary of the board of directors of Muyuan Co., Ltd. emphasized in response to the first that although the current stage is facing challenges, the company is still unswervingly optimistic about the prospects of China's pig breeding market in the long-term development, and will continue to increase investment in research and development, improve the content of industrial science and technology, and strive to build a more stable and competitive industrial chain.
The first loss of Muyuan shares not only reflects the severe test of the domestic pig breeding industry in the first cycle of fluctuations, but also once again highlights that enterprises must continue to adapt to market changes, strengthen their ability to resist risks, and look for development opportunities for transformation and upgrading in adversity. How Muyuan shares will rely on its own strength and strategic adjustment to achieve a turnaround, has become the focus of attention of the industry and the majority of investors.