March 20, 2020

China's pork producers reporting increased revenue amid COVID-19 outbreak

Companies such as Muyuan Foods said they are experiencing record revenues even with lower production volumes because of rising pork prices, reported Nikkei Asian Review.

Muyuan said 1.395 million live swine were sold in the first two months of 2020, 31% lower compared to 2019. But the company earned 4.62 billion RMB (~US$661.5 million; 1 RMB = US$0.14), 2.56 times higher.

Muyuan, listed in Shenzhen sold pork at 32.50 RMB / kg (~US$4.60) in February 2020. One year prior, pork was sold at 9.60 RMB / kg (~US$1.36).

According to New Hope Liuhe, a unit of New Hope Group said regular pork sales activities were affected since February 2020 by the temporary movement restrictions imposed due to COVID-19.

New Hope Group is an agriculture conglomerate, which reported a revenue of 1.931 billion RMB (~US$273 million) in January and February 2020.

11 out of 12 pork companies (listed in Shanghai or Shenzhen and notified its pork monthly production and revenue) reported surging revenues in the first two months of the year.

Even smaller players like Zhejiang-based Ningbo Tech-bank reported a 4.6 times increase in revenue to 889 million RMB (~US$125 million) with a 44% drop in production volume.

One of the biggest industry players, Wens Foodstuff Groups expected 3.5 times higher net profit at 13.9 billion RMB (~US$1.96 billion) last year. Huatai Securities analysts Yang Tianming and Feng He said Wens' bottom line will hit 32.387 billion RMB (~US$4.57 billion), a 2.3 times increase in 2020.

-      Nikkei Asian Review