BOABC Viewpoint: Due to the outbreak of ASF, the prices of white broiler related products have increased, resulting in a significant growth in the benefits of listed companies

White broiler supply was still tight in the first half of 2019. The production capacity of pigs decreased by 30%~40% due to the outbreak of African swine fever, leading to the rise in the prices of chicken products. The average prices of liver broilers and chicken products respectively reached 9.67yuan/kg and 11.85yuan/kg, increasing by 22.7% and 21.84% year-on-year separately; the prices of parental chicks and commercial chicks were 65.18yuan/set and 7.23yuan/bird, rising by 93.13% and 203.65% compared with the same period last year. The sharp increase in the prices of products in broiler industry chain has drove up the performance of companies, resulting in a significant growth in the net profits.
 
(1) Sunner Development achieved net profits of 1.653 billion yuan and operation revenue of 6.554 billion yuan in the first half of 2019, which respectively increased by 393.40% and 29.27% year-on-year. The average price of chicken rose significantly from the same period last year, and the gross profit rate of chicken products reached 30.64%, a year-on-year growth of 19.62%. The sales from meat products accounted for an increased proportion, which was 27.31%, up 2.74% year-on-year.  
 
(2) Yisheng Livestock and Poultry Breeding Co., Ltd. (Yisheng for short, similarly hereinafter) realized operation revenue of 1.446 billion yuan, up 188.07% year-on-year, and achieved net profits of 909 million yuan, a year-on-year increase of 27.69 times in the first half of 2019. As China’s largest breeder leading company, Yisheng works in  rearing GP breeders and parental breeders. In the first half of 2019, the average profit of commercial chicks exceeded 5yuan/bird, while it was less than 0.5yuan/bird in the same period last year.
 
(3) Shandong Minhe Animal Husbandry Co.,Ltd. ( Minhe for short, similarly hereinafter) achieved operation revenue of 1.563 billion yuan and net profits of 869 million yuan in the first half of 2019, which respectively increased by133.31% and 4,618% year-on-year. The sharp growth in the prices of its major product commercial chicks in this period is the main reason for the its increase in revenue and gross profits.
 
(4) Shandong Xiantan Co., Ltd. ( Xiantan for short, similarly hereinafter) achieved operation revenue of 1.552 billion yuan and net profits of 403 million yuan in the first half of 2019, which respectively increased by 43.15% and 353.19% year-on-year. The growth in the prices of its products significantly drove up the operating profits, total profits, and net profits.
 
It’s expected that the sales volume of white broiler chicks and the production of commercial broilers in the second half of 2019 will be higher compared with the same period last year. At the same time, the sharp growth in pork prices will drive up chicken prices, and the prices of live broilers and chicks will hit new highs. It’s predicted that white broiler listed companies will achieve new highs in operation revenue and profits in the second half of 2019.