After losing the "Pig King" throne, he was overtaken by Wen's shares. Why...

Wen's shares were not only squeezed out of the position of the “boss” of listed pig companies by Muyuan shares, but now their performance is overtaken by Zhengbang shares and New Hope
.

Why did Wen's shares fall behind?

The drop in stock prices raises doubts

Faced with declining profits and falling stock prices of Wen's shares, investors "cannot sit still
.

" On May 11, investors repeatedly asked Wen's shares on the interactive platform

In response to the cliff-like decline in the stock price, Wen explained that the stock price trend is determined by market investors.
The company’s management has always attached great importance to this.
Support
.

Investors expressed dissatisfaction with this response.

An industry insider who has been observing the pig breeding industry for a long time told the China Business Daily that the decline in the performance of Wen's shares was expected
.

After the outbreak of African swine fever in 2018, some live pig orders signed by Wen's shares were affected

It is worth noting that the current "super long pig cycle" has entered a downward channel, but Wen's pig production capacity is still in the recovery stage
.

Recently, Wen’s shares replied to the Shenzhen Stock Exchange that the company’s stock of breeding pigs and hogs is gradually increasing, but the production cycle of hogs is longer, from the increase in stocks of breeding pigs and hogs to the return of hogs to the level of the previous normal year.

Wen's shares fell behind

Because of lagging behind in the speed of capacity recovery, Wen's shares did not make any money in the "ultra-long pig cycle" in 2020
.

According to the annual report, Wen's net profit in 2020 has dropped by 46.

Wen's shares have lost their former "brilliance"
.

In 2015, Wen's shares, which were the first to be listed, were firmly in the position of the industry's “biggest” in the market.

Today's Wen's shares, performance drops again and again
.

According to the first quarter performance report, Wen's net profit in the first quarter of 2021 fell by 71%

At the same time as the performance declines, Wen's debt is increasing
.

In 2020, Wen's shares will have liabilities of 32.
912 billion yuan, an increase of 73.
67% year-on-year, and the debt-to-asset ratio will reach 40.
88%
.
In this regard, the relevant staff of Wen's Co.
, Ltd.
stated that the financing behaviors such as borrowing and additional issuance are all to raise funds for the company's development so as to make the company bigger and stronger
.
But this statement does not satisfy investors
.
"The performance has fallen severely, but Wen's shares have not seen any measures to improve performance
.
" The above-mentioned investors said
.

Both main businesses are frustrated

In terms of business, Wen's shares are laid out for the two main businesses of chicken and pigs, but for Wen's shares, which one of the main businesses can not let them worry about
.
According to the main product sales briefing in April 2021, the sales revenue of Wen's broiler chickens and the average sales price of hairy chickens decreased by 4.
01% and 6.
29% respectively from the previous month
.
The sales revenue of meat pigs and the average sales price of hairy pigs fell even more severely compared with the same period last year .

The current Wen's shares are facing "internal and external troubles"
.
On the one hand, the poultry market continues to be sluggish, and the prices of broiler and feather chickens are rising weakly
.
According to data from Zhuo Chuang Information, the profit of chicken breeding is only 1.
68 yuan / chicken; and the theoretical loss of the slaughter end this year will reach 1.
20 yuan / chicken, which is a sharp decline in profitability compared with previous years
.
On the other hand, compared with competitors in the same industry, Wen's shares in pig farming costs are still higher, and profits are naturally affected
.
The relevant staff of Wen's shares replied on the investor interactive platform that the company’s pig raising business suffered a slight loss in the first quarter, mainly due to the abnormal cost fluctuations in the first quarter.
Some of the purchased piglets were fattened and listed in the first quarter, but compared to self-produced piglets.
For piglets, the cost of outsourcing piglets is higher, so the cost of commercial piglets also increases
.

At present, Wen's shares are also a step slower in the "cost war" with companies of the same type
.
The cost of Wen's pig raising business in the first quarter is about 15 yuan/kg, while the production cost of commercial pigs for Muyuan in 2020 is about 13.
5 yuan/kg
.
With both the sales volume and the cost lagging behind, Wen's shares are getting farther and farther away from the position of the “biggest” in the industry
.
Not only that, at the end of 2020, Muyuan and New Hope respectively issued announcements to reduce the cost of pig breeding to 11.
5-11.
8 yuan/kg and 11-12 yuan/kg
.
It was not until February 2021 that Wen's shares stated that they would reduce the cost to less than RMB 20/kg
.
In a recent reply to investors, Wen's shares stated that the next step for the pig business is to reduce costs
.

What specific measures will Wen's Co.
, Ltd.
take to reduce the cost of pig breeding and optimize the structure of poultry breeding? A reporter from China Business Daily called to inquire about the relevant person in charge of Wen's shares.
As of press time, no response to the above question has been received
.