New hope Liuhe the largest feed and poultry producer Profits surged 87% in 2019: 01-14-2020

According to China’s largest feed and meat producer New Hope Liuhe, there first-half net profits surged to 87.14% because of an increase in the sales of feed and poultry.  The net profit of the company was reported 1.56 billion Yuan, up from 846 billion Yuan a year ago. Based on the data collected from the Shenzhen Stock Exchange, the revenue was reported 35.29 billion Yuan, an increase of 11.54 % from the previous year. The company along with another giant poultry producer Chinese company Wen’s Foodstuff showed strong performance and approximately 400 million chicken and ducks in the period.

According to the statement released by the New Hope Liuhe, the jump in the poultry and pig prices because of a supply shortage in the market in the first half of 2019 have pushed up the prices and the firm's profits.  Though the feed industry saw a sudden drop in demand because of the outspread of ASF in China the company sold 8.76 million tons of feed in the first half as the sharp rise in the sales of poultry and aquaculture feed made up the loss from pig feed sales. The company felt the impact of ASF as its pork product sales fell to 18.89% and the company sold 1.34 million pigs during the period. New Hope Liuhe has its pig farming unit and also contract it from local farmers, and is planning on expanding pig production unit both domestically and internationally.

Recently, the company announced the stocking of new pig farms in Vietnam that is expected to produce 300,000 hogs per year by 2021. Furthermore, the company is also planning on building a feed mill on the same site; it has eight other feed mills in Vietnam, which contributed 700,000 tons of feed in 2018. Along, with expanding in the pig industry, the company has also expanded its operations in the broilers; to control the supply and increase the production of value-added products.

The company is planning on spending CNY 25.4 million to build a new poultry facility in Linyi, Shandong province that is expected to produce 3.2 million broilers per year with one of the new shed that will be capable of raising 460,000 broilers per year. According to CITIC Jiantou Securities,” the firm wants to increase profitability by bypassing traditional wholesale channels to supply more value-added products to fast-food restaurants and supermarkets”. The company is the second-largest producer of broilers in the country and slaughter 700 million broilers a year.

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