February 27, 2020
Muyuan Foods China hit 1,000% higher profits due to record swine prices
Muyuan Foods, the second biggest swine producer in China, hit 6.1 billion RMB (~US$866 million; 1 RMB = US$0.14) or more than 1,000% full year profits in 2019 thanks to surging swine prices due to dwindling domestic supplies, reported Reuters.
The company sold more than 10 million swine in 2019 and benefited from the 140% price increase in swine. Swine prices hit its peak last year as the African swine fever outbreak decimated domestic pork supplies.
Muyuan's reported profits exceeded all the company's previous annual earnings. The bulk of the profits, 4.88 billion RMB (~US$693 million), was earned in the final quarter of 2019 at a time when swine was priced as high as 3,500 RMB (~US$497) each.
Current swine prices are just above 2,000 RMB (~US$284) on average.
The company reported a sales income of 51%, hitting 20.2 billion RMB (~US$2.86 million) with its share price now more than 200% higher. Muyuan's shares closed at 116 RMB per share, down 3.3% on February 26, 2020.
Muyuan plans to build three slaughterhouses in Henan province with a 6 million swine annual capacity in response to the government's call to boost swine production and create integrated pork producers.
The company has also begun expanding its swine production capacity, but work has halted at several locations due to the COVID-19 outbreak.