Since entering 2024, the performance of "Pig Mao" Muyuan shares in the secondary market has been quite poor, with a cumulative decline of more than 10%.
Affected by the first few pigs, pig enterprises, including Muyuan shares, will not have a good time in 2023, and losses have become the norm, among which Muyuan shares lost more than 1.8 billion yuan in the first three quarters of last year, and the annual pig sales have also declined.
Compared with the decline in performance, investors need to pay more attention to the debt pressure of pig enterprises and comprehensively consider the debt repayment ability of pig enterprises.
Stock prices have been declining for several days
At the beginning of 2024, Muyuan's performance in the secondary market has not been satisfactory, and it has fallen for six consecutive trading days since January 3, and the stock price has fallen from a high of 4205 yuan shares (before the right to reset, the same below) fell to a low of 3525 yuan shares, down more than 16% at one point, including more than 8% on the 10th, and finally closed down 497%, share price 3673 yuan shares.
On the evening before the stock price**, Muyuan announced that the company's net assets as of the end of 2022 were 8807 billion yuan, with a loan balance of 5929.5 billion yuan. As of December 31, 2023 (unaudited), the company's borrowing balance was 7799.8 billion yuan, an increase of 187 from the end of 20220.3 billion yuan, accounting for 2124%。
According to the "** Law" and other relevant regulations, if the company's new borrowings exceed 20% of the net assets at the end of the previous year during the duration of the convertible bonds, the company needs to disclose this situation.
Judging from the data, the company's borrowing balance in 2022 will account for a high of 67 percent of its net assets33%, this proportion is not low, after the new borrowing of 18.7 billion yuan in 2023, what will be the proportion of net assets? We have to wait for the 2023 annual report to be disclosed.
According to the disclosure, Muyuan's new borrowings in 2023 are mainly bank loans, as high as 1641.3 billion yuan, in addition, entrusted loans, financial leasing loans, small loans, etc., and other borrowings were 135.4 billion yuan, 90.4 billion yuan. For more details, please refer to the table below
The company said that the new borrowings are used to meet the needs of the company's business development, and the company's operating conditions are stable and the business operations are normal. The above new borrowings have no material adverse impact on the Company's solvency.
What is the specific impact? Analysed below.
In the face of the sharp drop in stock prices, Muyuan issued a favorable announcement on the evening of January 10, disclosing the progress of the plan to increase the shareholding of some directors, supervisors, senior executives and core personnel.
On October 25, 2023, Muyuan Co., Ltd. announced that based on the confidence in the company's future development and the recognition of long-term investment value, some directors, supervisors, senior managers and core management, technical and business personnel (the main body of the increase) plan to increase their holdings of the company's shares in the next 6 months through centralized bidding, block trading or other transactions permitted by laws and regulations, with a total planned increase of 1 billion yuan to 1.2 billion yuan.
According to the progress of the company's disclosure of the increase in holdings, the total number of shares held by the above-mentioned entities increased by 2,543900,000 shares, an increase of 102.5 billion yuan, that is, the minimum requirement for the planned increase in holdings has been completed.
According to the short and fast interpretation, the funds of the main body of the increase are its own funds and self-raised funds, and according to the 2022 annual report, the company's directors, supervisors and senior executives received 2525 pre-tax remuneration from the company890,000 yuan, which means that the funds of the main body of the increase are most likely self-raised.
As for how to raise their own funds, it is estimated that only the parties can know.
As of January 11**, Muyuan's share price was 3692 yuan shares, down more than 12% from the high point at the beginning of the year, with a total market value of 201.8 billion yuan and a TTM price-earnings ratio of 2036。
The industry is generally suffering heavy losses
Founded in 1992 and successfully listed in 2014, Muyuan Co., Ltd. has formed a pork industry chain integrating feed processing, pig breeding, pig breeding, slaughtering and processing. In 2022, the proportion of pig income will be as high as 9593%, that is, the product is the core of the company, and it is worthy of the company's "pig grass" title.
According to the interpretation of Short Ping Kuai, in 2023, the company's live pig sales will be 6,38160,000 heads, a year-on-year increase of only 427%, compared with the previous rapid expansion, the company's pace in 2023 will slow down significantly, which is also the attitude of most pig enterprises, and a small number of pig companies still choose to expand against the trend.
From the point of view, the company's commercial pig ** in December 2022 ** is 1861 yuan kg, after that, the commercial pig ** overall showed a downward trend, with a slight ** in the middle, and the ** in December 2023 dropped to 1342 yuan kg, down 2789%。
Because of the decline in commercial pigs**, even though Muyuan's pig sales have increased, the sales revenue has declined, and the revenue in 2023 will be 1,0821.7 billion yuan, down 9 percent year-on-year64%, and overall revenue is likely to decline in 2023.
In the first three quarters of 2023, the company achieved an operating income of 8296.9 billion yuan, a slight increase of 2 year-on-year72%, of which 31.1 billion yuan in the third quarter, a sharp decrease of 14 percent year-on-year81%。
In fact, in addition to the decline in the income of pig enterprises, the decline in commercial pigs has a greater impact on profits, and most pig companies are expected to be in large losses in 2023, so what about Muyuan shares?
In the first three quarters of 2023, the gross profit margin of Muyuan shares was 463%, compared to 17. in 2022The sharp decline of 5% directly turned the company's profit from positive to negative.
Specifically, the company's net profit attributable to the parent company in the first three quarters of last year was 184.2 billion yuan, a year-on-year drop of 22182%, including a profit of 9 in the third quarter3.7 billion yuan, briefly reversed the loss trend, and it remains to be seen whether it can be maintained in the future.
Of course, judging from the sharp decline in commercial pigs in the fourth quarter, Muyuan shares are more likely to lose money in Q4, and we are waiting for the disclosure of the 2023 annual report.
In the first three quarters of 2023, among the 11 pig breeding enterprises in the A-share market, except for Jingji Zhinong (which is mainly engaged in real estate), 12In addition to the net profit of 5.8 billion yuan, the rest of the pig enterprises are in large losses, including Tianbang Food (-15.6.6 billion yuan), Muyuan shares, *ST Zhengbang (-28.1.9 billion yuan), New Hope (385.8 billion yuan), Wen's shares (-45300 million yuan) losses of more than 1 billion yuan.
The pig cycle that has lasted from 2021 to the present has made pig companies "unaffordable", why do pork ** fall endlessly? The main reason is the imbalance between supply and demand.
On the one hand, pig enterprises are expanding wildly, resulting in a large increase in production capacity. According to the National Bureau of Statistics, in the first three quarters of 2023, 537.23 million live pigs were slaughtered across the country, an increase of 16.93 million heads year-on-year, an increase of 33%, which is the largest number of slaughters in the past five years.
On the other hand, due to the adjustment of dietary structure and swine fever, domestic consumers' willingness to consume pork has declined, and the demand has reached the ceiling, for example, China's pork consumption in 2018 was 55.19 million tons, and in 2022 it was 57.13 million tons, during which it experienced a sharp decline.
For many pig enterprises, the two major problems are the fluctuation of pigs and swine fever, which is conducive to improving the performance of enterprises, on the contrary, dragging down performance, and once swine fever occurs, it will have an adverse impact on the entire industry, which will have an adverse impact on the business performance of enterprises.
Short-term debt far exceeds monetary funds
As mentioned above, the reason for the sharp drop in Muyuan's share price on January 10 is related to an announcement by the company, behind which investors are worried about the further increase in the company's debt, so what is the company's solvency?
In the first three quarters of 2023, the company's debt-to-asset ratio was 5965%, compared to 54 at the end of 202236% increased, of which the current ratio and quick ratio were respectively. 19, while the data at the end of 2022 were: 28。
According to the interpretation of the short flat and fast, the current ratio and the quick ratio are both used to represent the liquidity, the benchmark value of the former is 2, indicating that the current assets are twice the current liabilities; The benchmark value of the latter is 1, which means that liquid assets (cash, short-term investments, accounts receivable, notes, etc.) can repay current liabilities, and short-term solvency is reliably guaranteed.
From this point of view, Muyuan shares urgently need to improve their solvency.
According to the analysis, the assets of Muyuan shares in the first three quarters of last year were 18954.7 billion yuan, mainly fixed assets and inventory, respectively 11033.8 billion yuan, 4057.8 billion yuan, accounting for the proportion of assets. 41%。
As of the end of 2022, the company's slaughtering and meat business has set up more than 60 service stations in 20 provincial-level administrative regions across the country.
The company says the model helps ensure food quality and safety.
During the same period, the company's liabilities were 11306.6 billion yuan, of which current liabilities were 8449.8 billion yuan, accounting for 7473%。Further, the current liabilities are mainly short-term borrowings, notes payable and accounts payable, and non-current liabilities due within one year, which are 4533.4 billion yuan, 2001.9 billion yuan, 787.9 billion yuan.
In addition, the company's non-current liabilities are mainly long-term borrowings and bonds payable, which are 1199.8 billion yuan, 913.9 billion yuan.
For comparison, the company's monetary funds are 1576.3 billion yuan, there is a large gap with short-term borrowings, and the company's debt repayment pressure is not light.
The high level of interest-bearing liabilities also kept the company's interest expense high, which was 24 in the first three quarters of last year2.4 billion yuan, a year-on-year increase of 107%, eroding corporate profits.
From the perspective of operating cash flow, the company's net inflow in the first three quarters of last year was 668.8 billion yuan, down 3217%, net operating cash flow inflow is one of the company's confidence to repay debts, but it is far from enough.
Overall, if the pig market improves, it will make the performance of pig companies, including Muyuan shares, rebound, and then enhance the ability to repay debts, but if the pig market continues to decline, then these companies will seek financing in various ways, including mergers and acquisitions.
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