Dekon Food and Agriculture Group (2419) H1 2024 earnings summary

Executive summary

• Net profit reached RMB1,791 million for H1 2024, reversing a net loss of RMB2,353 million in H1 2023, driven by higher pig and chicken prices and lower costs.

• Revenue rose 25.3% year-over-year to RMB9,407 million, mainly due to strong pig segment performance.

• Gross profit margin improved to 12.4% from -5.2% in H1 2023, reflecting effective cost management and favorable market conditions.

• Adjusted profit (excluding biological assets fair value): RMB363 million, versus a loss of RMB1,118 million in H1 2023.

Financial highlights

• EBITDA (before biological assets fair value adjustments): RMB1,034 million, compared to RMB-477 million in H1 2023.

• Cash and cash equivalents increased to RMB3,490 million as of June 30, 2024.

• Net gearing ratio: 163.9%, down from 338.9% at 30 June 2023.

• Earnings per share: RMB4.54, compared to a loss per share of RMB6.03 in H1 2023.

• Capital expenditure: RMB259 million, mainly for slaughterhouses, feed mills, and breeding farms.

Outlook and guidance

• Plans to steadily expand core business capacity, especially in Family Farms and yellow-feathered broilers.

• Focus on cost reduction through nutrition improvement, feed optimization, and precision feeding.

• Continued investment in biosecurity, disease prevention, and ESG initiatives for sustainable growth.

• Management expects stable and positive trends in the Chinese economy and hog market for the remainder of 2024.