Hoa Phat, Dabaco, and Masan MEATLife are all experiencing good growth.
In the first nearly nine months of this year, most pig farming businesses recorded good growth thanks to the high and stable price of pork over a long period.
For example, in the first six months of the year, Hoa Phat Livestock Development Joint Stock Company sold nearly 190,000 market pigs, 80,000 commercial breeding pigs, and over 1,000 breeding gilts to the market. Sales volume for all pig breeds showed good growth. As a result, Hoa Phat's revenue from the livestock sector increased by 34.4% compared to the same period last year.
Dabaco Vietnam Group Joint Stock Company (Code: DBC) announced that its August revenue exceeded VND 2,024 billion, an 11% increase compared to July. Revenue in July and August increased by 12% compared to the two preceding months and by 33% compared to the same period in 2023. The animal feed and pig farming sectors were the main contributors to this growth.
Mr. Nguyen Nhu So, Chairman of the Board of Directors of Dabaco Group, commented: Dabaco's abundant pork inventory at this time is expected to become one of the levers to help the Group improve its business results in the last months of the year.
Another bright spot in the livestock sector is Masan MEATLife (Code: MML). In June, Masan MEATLife recorded positive operating profit (EBIT) for the second consecutive quarter. Specifically: According to the Q2/2024 financial report, Masan MEATLife recorded an increase of VND 105 billion in operating profit (EBIT) compared to the same period last year. This is the second consecutive quarter that MML has achieved positive EBIT. A positive contribution to this result was increased revenue from the processed meat segment thanks to favorable factors such as rising chicken and pork prices and reduced animal feed costs.
MML continues to contribute to the transformation and development of Vietnam's processed meat industry with high-quality products under its two brands, Ponnie and Cowboy Pork. According to Masan MEATLife, these two brands have achieved approximately 50% market share in the sterilized sausage product market.
Several pig farming businesses have released preliminary business results for the third quarter, showing a clear differentiation. (Photo: Dabaco)
In contrast to Hoa Phat Livestock, Dabaco, Masan MEATLife, Dong Nai Agricultural and Livestock Products Joint Stock Company (Dolico – Code: NSS) estimates that in the first 9 months of this year, the company's pork sales volume only reached 1,840 tons, with revenue of approximately 95 billion VND, and a pre-tax loss of 1.7 billion VND.
This year, Dolico aims for a pre-tax profit of 5.8 billion VND. Based on the estimated results, the livestock company is still far from its target. To increase revenue in the future, Dolico stated that it will need to lease out warehouses, buildings, and retail spaces at its main office in Bien Hoa City (Dong Nai province) and other company locations. Additionally, the company will implement a 20% reduction in remuneration for the Board of Directors and a 10% reduction for the Supervisory Board starting in October 2024.
In the final months of 2024, NSS announced that it would strive to import 1,000 three-breed breeding pigs for meat production each month to increase income and revenue. Simultaneously, it would import 100 gilts for breeding purposes each month. Each import of breeding pigs would cost between 2-3 billion VND to support production at the Suoi Cao and Xuan Thanh farms.
Previously, Dolico projected its Q3/2024 business plan with a pork sales volume of 135 tons, total revenue of over 8 billion VND, and after-tax profit of 500 million VND.
That was the expectation, but the company stated that its livestock business is facing many difficulties. Disease outbreaks among livestock are becoming increasingly complex, leading to higher prices for raw materials used in animal feed production, as well as increased costs for supplies and equipment, and higher veterinary medicine costs for disease prevention in livestock.
Similarly struggling is Hoang Anh Gia Lai Joint Stock Company (HAGL - Code: HAG). In the second quarter, the pig farming segment only brought in revenue of VND 320 billion for HAG, a decrease of 28% compared to the same period last year. Gross profit improved, reaching VND 86 billion, an increase of 56% compared to the same period last year. For the first six months of the year, HAGL's pig farming segment recorded revenue of VND 612 billion, completing 39% of the annual plan, and a gross profit of VND 92 billion. HAGL did not provide detailed explanations of selling expenses, administrative expenses, and other related expenses, so the net profit/loss cannot yet be determined.
This year, HAG aims for revenue of VND 7,750 billion, a 20.2% increase compared to 2023. Of this, revenue from banana-fed pigs is projected at VND 1,550 billion. Although current livestock operations do not contribute significantly to HAG's main revenue, LPBank has signed a contract to provide HAG with a VND 5,000 billion credit facility, of which VND 3,000 billion will be disbursed in the initial phase to support HAG in boosting investment in new pig farming and breeding. HAG has reinvested in increasing its herd size, and the necessary infrastructure and barns are already in place. Products are expected within 4-5 months. This means that by the fourth quarter of 2024 and in 2025, HAG could generate profits.
Opportunities to improve profit margins for livestock businesses at the end of the year.
VPS Securities Joint Stock Company recently predicted that live pig prices are expected to remain high in the long term due to supply shortages and natural disasters such as storms and floods in the North and Central regions. Restocking will take at least until the end of 2024 to bring new supply to the market. Furthermore, prices typically increase during the period leading up to the Lunar New Year due to high demand. Therefore, it is highly likely that pork prices will remain high, around 65,000 - 70,000 VND/kg. With high pork prices, businesses producing and trading pork products will have the opportunity to improve their profit margins in the final months of 2024.
The Analysis Center of Tien Phong Securities Joint Stock Company also noted that pork prices are trending upwards due to higher demand amidst the slow pace of restocking following the African Swine Fever (ASF) outbreak. Currently, many businesses and small-scale farmers are in the process of restocking after the ASF outbreak and will need at least until December 2024 before new supply enters the market.
According to experts from Maybank IBG Research, live pig prices may continue to rise in the near future. In the short term, live pig prices may be supported by reduced supply due to losses suffered by small-scale producers and disease outbreaks.
With pork prices remaining high, businesses involved in the production and sale of pork products will have the opportunity to improve their profit margins in the final months of 2024.
Regarding pork supply, the Department of Animal Husbandry (Ministry of Agriculture and Rural Development) stated that from now until the end of the year – including during Tet when pork demand increases by about 10-15% – we will still ensure a good supply from domestic pork production. However, it is necessary to effectively prevent and control African swine fever and practice biosecurity in livestock farming.
The Ministry of Agriculture and Rural Development has advised 16 large pig farming enterprises nationwide to expand their production scale to ensure supply. As for individual farmers, when starting or increasing their herds, they must ensure a safe, disease-free, and high-quality breeding stock, and strictly adhere to biosecurity measures to maintain their pig herds.
The Ministry of Agriculture and Rural Development forecasts that the supply of pork will increase again in the near future. However, due to the ongoing complexity of the disease situation, the price of live pigs may remain high and only begin to fall again in 2025.
Source: https://danviet.vn/cac-ong-lon-chan-nuoi-dang-lam-an-the-nao-diem-danh-hoa-phat-dabaco-hagl-20240922172625474.htm
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