Pig and Chicken Business is Steady and Improving, Wens Foodstuffs Group's Semi-Annual Performance is Expected to Increase by 50%

On July 11th, Wens Foodstuffs Group released the semi-annualperformance forecast for 2019. The company expects to achieve a net profitattributable to the mother company of 1.35 billion yuan to 1.45 billion yuan inthe first half of the year, a year-on-year increase of 47.17% to 58.07%. Themain reasons for the company's semi-annual performance growth are the recoveryof the pig farming business after March, the good performance of the poultryfarming business, and the growth of financial investment business.

During the reporting period, the company's pig farming businesshas shown a steady overall performance. Affected by the African swine feverepidemic and the market's seasonal downturn in January and February, the pigmarket situation was severe in the first half of the year. The company activelycarried out epidemic prevention and control work and increased investment inbiosecurity prevention and control costs. According to the disclosed data, thecompany sold 11.75 million commercial meat pigs in the first half of the year,a year-on-year increase of 13.69%, showing a stable growth trend.

Since March, the supply and demand gap in the domestic pig markethas gradually emerged, and pig prices have been rising step by step, which isexpected to steadily improve the company's profitability. While stabilizing thepig farming business, the company continues to promote the transformation andupgrading of the poultry farming business, with significant results. In recentyears, the company has been developing broiler slaughtering and is committed tocontinuously increasing the proportion of fresh chicken sales. At the sametime, in the first half of the year, the company plans to merge and acquireJinghai Poultry Industry to lay out white feather chickens, further improvingthe poultry industry chain, and the company's risk resistance and comprehensivebenefits of poultry farming are expected to be further enhanced.

The announcement shows that the company's sales volume ofcommercial broilers in the first half of the year increased by 17.51%year-on-year, and the sales volume of commercial ducks increased by 21.52%year-on-year. Although affected by the changes in market supply and demand, thesales prices of poultry have declined year-on-year, the company's poultryfarming business still achieved good operating benefits.

In addition, during the reporting period, the company's financialinvestment business continued to maintain a growth trend, and the financialinvestment performance steadily increased, providing good support for theperformance in the first half of the year.

Industry analysts noted that under the impact of African swinefever, the production capacity of the pig industry has been significantlyreduced. The continuous and significant year-on-year decline in the inventoryof sows capable of breeding and live pigs is expected to drive pig prices torise beyond expectations in the second half of the year. With the support ofsubstitution demand and the promotion of the consumption peak season in thesecond half of the year, the broiler industry will also enter a high prosperityphase. As an industry leader, the company is expected to seize the industry'sdividends with a relatively certain volume of pig sales and a comprehensiveindustrial chain layout, further promoting the improvement of operatingperformance.

Correspondent: Securities Affairs Department