Fengkou Financial Report | Ham sausage is not selling well, Shuanghui Development's revenue and net profit both fell in the first half of the year, and advertising expenses reached 231 million yuan
2024-08-15
한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina
Both revenue and net profit fell. On August 14, Shuanghui Development disclosed its semi-annual report. The company achieved revenue of 27.593 billion yuan in the first half of the year, a year-on-year decrease of 9.31%, and net profit attributable to the parent company of 2.296 billion yuan, a year-on-year decrease of 19.05%. The company said that the decline in revenue was mainly affected by the decline in sales of packaged meat products and fresh pork products, as well as the low price of poultry products. The decline in profits was mainly due to the sluggish market prices of fresh pork products and poultry products, and the decline in product gross profit.
Shuanghui Development was founded in 1998 and listed on the Shenzhen Stock Exchange in 1998. The company's headquarters is located in Luohe City, Henan Province, and its industry is meat products. The company is a national key leading enterprise in agricultural industrialization, mainly engaged in slaughtering and meat processing industries. Its main products are fresh products and packaged meat products. At present, the company has cultivated a product group mainly composed of packaged meat products, fresh pig products and fresh poultry products. The company currently has more than 30 modern meat processing bases and supporting industries in 18 provinces including Henan, Heilongjiang, Hebei, Shandong, Anhui, Hubei, Jiangxi, Shanghai, Shaanxi, Sichuan, Guangxi, etc., and has more than one million sales outlets in China. Its products are basically shipped overnight in most provinces.
From the perspective of the company's main products, the total export volume of packaged meat products including ham sausages in the first half of the year was 1.51 million tons, a year-on-year decrease of 7.74%, and the revenue was 12.373 billion yuan, a year-on-year decrease of 9.64%; the revenue of fresh products was 13.325 billion yuan, a year-on-year decrease of 16.14%. From the perspective of gross profit margin, the gross profit margin of packaged meat products was 35.49%, an increase of 5% over the same period last year; the gross profit margin of fresh products was only 5.17%, a year-on-year decrease of 1.14%.
In the first half of this year, Shuanghui Development's production of fresh pork products was 561,800 tons, down 32.40% year-on-year. The main reason was that meat consumption was lower than expected, which affected the year-on-year decline in production. The inventory of fresh pork products was 101,400 tons, down 41.32% year-on-year. The main reason was that the pig price fell first and then rose in the first half of the year. The company took advantage of the rising market to increase shipments and took advantage of the low price period to appropriately reserve frozen products during the same period. The sales volume of fresh poultry products increased by 34.65% year-on-year. The main reason was that as the group's poultry industry production capacity continued to be released, the market network was accelerated to expand production and sales increased year-on-year. The sales volume of fresh poultry products was less than the production volume, mainly because some of the poultry products produced by the group were sold domestically to the meat products industry. In addition, the production volume, sales volume and inventory of packaged meat products all declined.
It is worth noting that the number of the company's dealers decreased in the first half of the year. As of the end of June 2024, the company had a total of 17,305 dealers, a net decrease of 455 from the beginning of the year, a decrease of 2.56%. Among them, 5,759 dealers were located south of the Yangtze River, a decrease of 4.53% from the beginning of the year, and 11,546 dealers were located north of the Yangtze River, a decrease of 1.55% from the beginning of the year.
In the first half of the year, the company's sales expenses were 925 million yuan, down 2.64% year-on-year, and management expenses were 631 million yuan, up 10.08% year-on-year. In terms of sales expenses, advertising and promotion expenses reached 231 million yuan, accounting for 25%. The company's advertising methods are mainly TV advertising, outdoor advertising, digital media advertising, etc., including TV advertising 118.07 million yuan, advertising endorsements and advertising production 20.24 million yuan, digital media advertising 16.37 million yuan, online and offline marketing and communication 7.69 million yuan, and marketing planning 7.49 million yuan.
Judging from the performance in recent years, Shuanghui Development's performance has continued to decline. From 2021 to 2023, the company's revenue has declined for three consecutive years, with a decrease of 9.72%, 6.16% and 4.29% respectively. In terms of net profit attributable to the parent company, there have been two years of decline in the past three years, with a decrease of 22.21%, an increase of 15.51% and a decrease of 10.11% from 2021 to 2023 respectively.
In addition, the company is not stingy in terms of dividends. The company simultaneously disclosed the semi-annual profit distribution plan, intending to distribute profits to all shareholders at a ratio of 6.60 yuan (including tax) per 10 shares, with a total profit distribution of 2.287 billion yuan and a dividend rate of about 99.6%. The company stated that if the company is in a mature stage of development and has no major capital expenditure arrangements, when distributing profits, the cash dividend should account for at least 80% of the profit distribution.
In the secondary market, Shuanghui Development's stock price is also on a downward trend. From the end of February to the beginning of March this year, Shuanghui Development's stock price reached a stage high of more than 29 yuan per share, and then the stock price fluctuated and fell. As of the close of August 14, the company's stock price was 22.41 yuan per share, a drop of more than 23% from the stage high at the beginning of the year. The company's current total market value is 77.643 billion yuan.
(Liu Jian, a reporter from Dazhong Daily and Fengkou Finance)
(The views in this article are for reference only and do not constitute investment advice. Investment is risky and you should be cautious when entering the market!)
