What did feed enterprises do in 2014?
With the development of the times, the feed industry has gradually entered a period of integration and transformation. Unlike previous years, the threshold for the feed industry is now high, and the situation of "big fish eating small fish, small fish eating shrimp" is indeed common in the industry. If domestic leading feed enterprises want to come out on top in this ever-changing industry, they must "consolidate the foundation and explore innovation." Looking back at 2014, it was an extraordinary year for feed enterprises. The ups and downs of the feed raw material market, the restrictions introduced by national policies, and the continued downturn of the downstream breeding industry. In such a "turbulent" year, what did feed enterprises do?
Dabeinong: The Dark Horse of the Aquatic Feed Industry
Dabeinong has always focused on selling premix, with an annual production capacity of 8 million tons and annual sales of around 4 million tons; at the same time, its comprehensive feed gross profit margin of 20% has become the highest in the industry. It is said that Dabeinong has been involved in the aquatic feed market for 10 years, but various reasons prevented the company from standing out in aquaculture. With the increasing development of the feed industry, whether due to changes in people's dietary structure or the drive of policy reform, Dabeinong also took a fancy to aquatic feed, this "fat piece of meat." Using industry experience accumulated over many years, Dr. Shao Genhuo personally took charge in November 2014, serving as president of the Aquatic Science and Technology Group; the group even set a sales target of 800,000 tons as its grand goal for 2017.
Competition in the feed industry is becoming increasingly fierce, and simple commodity buying and selling can no longer satisfy the mainstream needs of customers. Dabeinong also uses the resources it has accumulated over more than 20 years in the pig farming service field. Dabeinong is more inclined to use pigs as a breakthrough point, taking the already-promoted and applied Pig Network Pipeline as the main line, and striving to prioritize the promotion of its comprehensive service platform concept in the pig farming field; the company hopes that "before 2017, through the Pig Network Pipeline, it can manage 100 million pigs, that is, a development target of 5 million sows."
"800,000 tons of aquatic feed sales," "managing 100 million pigs," and "managing 5 million sows" are all grand goals established by Dabeinong before 2017. With the increasing development of the feed industry, can Dabeinong's aquatic business and transformation goals be achieved? We shall wait and see.
Wellhope: Breaking Doubts and Successfully Listing
Wellhope officially landed on the Shanghai Stock Exchange on August 8, 2014, with an issue price of 5.88 yuan, an issue price-earnings ratio of 21.78 times, and the price-earnings ratio of its agricultural and sideline food processing industry at about 24 times. In fact, in previous years, Wellhope had plans to go public. After the prospectus was issued, the industry had both praise and criticism. Under the pressure of much negative news, Wellhope's listing plan ended without result. In 2014, Wellhope finally succeeded in listing, but negative news still continued endlessly. Some questioned Wellhope's reckless expansion in the feed market, and some published articles saying that Wellhope's listing had a strong meaning of raising money. At the same time, much attention was also paid to another Wellhope shareholder, Zhang Tiesheng. According to the prospectus disclosed by the company, Zhang Tiesheng, a celebrity from the 1960s known as "Mr. Blank Paper," held 32.24 million shares of Wellhope, ranking as the sixth largest shareholder. Even so, since listing, Wellhope's stock price has welcomed 8 limit-up boards and was enthusiastically pursued by investors. The strong stock performance also gradually diluted the previous negative news.
New Hope: Overseas Development Strategy, Taking Big Steps to "Go Global"
New Hope Liuhe Group ranks first in China in both feed production capacity and feed sales. Data shows that in 2013, New Hope Liuhe's feed sales were 15.41 million tons, and feed business operating revenue was 46.1 billion. As China's largest feed enterprise, New Hope was not content with the status quo, but instead set its sights overseas. Since 2003, New Hope's overseas business revenue has grown steadily. In 2013, overseas business revenue reached 2.717 billion, accounting for 3.9% of total revenue. In August 2014, Wang Hang, vice chairman of New Hope Group, proposed that in the future New Hope would expand overseas at a rate of 10 factories per year. Careful netizens would notice that in 2014 New Hope had many overseas factory constructions and overseas investment projects. Looking back at history, since 1999, New Hope has successively established nearly 40 factories or institutions in 16 countries and regions, and the company's layout focus has always been in Southeast Asia and South Asia. Among all of New Hope's overseas projects, most are feed production projects. According to Nongbo Feed's editor, New Hope's key future development regions are mainly Indonesia and Russia. In view of the business foundation and development momentum of New Hope's Tequ in Indonesia, a target was set to complete 11 additional feed mills by 2017. Previously, 80 million yuan was spent to build large feed mills in Moscow and Yekaterinburg in Russia, and preliminary plans were made to put them into production this year. As the feed enterprise with the largest annual feed production capacity in China and the second largest in the world, New Hope's acceleration of its overseas development strategy is also within expectations and entirely reasonable. Nongbo Feed's editor is also full of expectation and eager to witness New Hope's future map.
COFCO: Completing Two Major Overseas Acquisitions and Declaring War on the Four Major Grain Traders
The world's four major grain traders, "ABCD," control the operation of global grain and even control 70% of China's soybean processing and trade sectors. As China's leading large-scale agricultural group, COFCO implemented a series of acquisition and merger plans in 2014. On February 28, 2014, COFCO Group acquired a 51% stake in Nidera, a global agricultural products and bulk commodities trading group. Just over a month after acquiring Nidera, COFCO acted again. On April 2, together with Hopu Fund, it acquired a 51% stake in Noble Agri under Hong Kong, China-based and Singapore-listed Noble Group. The two overseas merger and acquisition transactions passed global merger review in October 2014 and successfully completed settlement. Foreign media also began to call out: COFCO has begun to declare war on the four major grain traders! As an analyst fighting on the front line of the grain and oil market, Nongbo Feed's editor must mention the influence of US soybeans, overseas markets, international factors, and so on every time when analyzing the soybean meal market; among domestic oil mills, traders, feed mills, and even farmers, who does not pay attention to the trend of US soybean overseas markets when buying soybean meal? Ultimately, this is because 80% of China's soybeans come from imports, and the right to speak on pricing has already been handed to the four major grain traders. After the mergers and acquisitions were completed, COFCO Group's asset scale could compete with the international giants, the four major grain traders ABCD. This provided a guarantee for COFCO's further development and participation in international competition, and it has important strategic significance for stabilizing China's grain market. COFCO Group has made a good start for domestic trade markets to enter the international arena, but the future development path can indeed be described as "the road ahead is long and far; I will search high and low."
Tangrenshen, CP, Wens, and Chuying Established the Large Enterprise Joint Targeted Professional Breeding Alliance
On December 20, 2014, at the Fourth Summit Forum of the China-US International Breeding Alliance, Tangrenshen Chairman Tao Yishan proposed that there are basically two successful breeding paths in the world today. One is the path of joint breeding, such as the United States NSR, the Canadian CCSI, and Denmark's joint breeding path; the other is the path of independent breeding by large enterprises, such as PIC Company and the United States Murphy Brown Company. After decades of exploration in China's breeding path, due to constraints from various factors, the paths of joint breeding and independent breeding by large enterprises are not suitable for China's national conditions. Therefore, in order to truly create Chinese-line breeding pigs with China's independent intellectual property rights, in line with the characteristics of China's breeding and consumption, and improving China's breeding efficiency, Tangrenshen led the establishment of the Large Enterprise Joint Targeted Professional Breeding Alliance.
Tao Yishan said that large enterprise joint targeted professional breeding is the first attempt in the industry, truly realizing the sharing of China's breeding data. Alliance enterprises can conduct genetic exchange at any time, which will greatly accelerate genetic progress, and alliance units will share genetic advantages. The so-called "large enterprise joint" means that Tangrenshen joins with leading domestic pig farming enterprises (CP, Wens, Chuying) to use the performance index data of 20 million live pigs for breeding to form a large alliance database platform; "targeted" breeding includes two concepts, including the breeding needs and directions of large enterprises, and also the specific needs of different regions in China's huge market; "professional" is reflected in the international and domestic research groups gathered by the alliance platform, as well as BGI's powerful gene sequencing and so on.
Tangrenshen, Wens, CP, Chuying, and Whiteshire jointly invested and became the 5 major shareholders of Meishen International Breeding Center. Domestic scientific research institutions (including the Chinese Academy of Agricultural Sciences, South China Agricultural University, Huazhong Agricultural University, Hunan Institute of Animal Husbandry and Veterinary Medicine, and BGI) jointly signed the strategic cooperation agreement for the Large Enterprise Joint Targeted Professional Breeding Industry-University-Research Alliance.
Haid: The Return of the King in 2014
In 2014, various enterprises could be said to show their own abilities in order to cope with the perilous feed industry, and the one with the more eye-catching performance was Haid Group. 2013 was a relatively difficult year for Haid, and performance showed a clear decline. Amid the industry's lack of optimism and widespread doubts, Haid returned as the king in 2014 and could be said to come out on top in the third-quarter report it announced. In 2014, under poor aquaculture weather conditions, Haid still achieved substantial growth in performance in the first 3 quarters, which was truly rare and basically confirmed the previous judgment in the company's in-depth report that "the company's business fundamentals have reversed." In the peak aquaculture season in the second half of the year, aquaculture continued to face difficulties. Driven by favorable factors such as marketing measures including deep cultivation of segmented markets and differentiated competitive advantages strengthened by technical services, Haid's sales situation was clearly better than the industry average and major competitors. Although the fourth-quarter reports of various companies had not yet been published, for aquatic feed enterprises, the overall situation was basically settled.