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March 2018
China Broiler Industry Research and
Investment Analysis Report in 2017/2018
China Broiler Industry Research and Investment Analysis Report in 2017/18
Address: Room 905, Golden Tower. No.1 Xibahe South Road, ChaoYang District, Beijing PRC
Tel: 86-10-64402118 Fax: 86-10-64402039 E-mail: [email protected] Web: www.cnagri.com
I
Industry Background
Based on continuous accumulation of data, persistent tracking on industrial changes and in-
depth researches for more than 20 years, BOABC will provide you with a valuable analysis
report on broiler industry and investment.
(1) The prosperity of white broiler industry declines, and breeder link suffers heavy
losses in 2017.
Affected by H7N9 epidemic situation, terminal market consumption and national
environmental protection policy, the prices of white broiler and relevant products fluctuate
sharply in 2017, raising link keeps profitable benefiting from the decline in feed prices, but
breeder link suffers heavy losses. From the perspective of the performances of enterprises in
2017, MINHE and Yisheng respectively suffered losses of 280 million yuan and 330 million
yuan; the net profit of Sunner Development and Xiantan respectively was 310 million yuan
and 190 million yuan, decreasing 54% and 59% from the same period last year.
(2) The degree of scale raising of white broiler continues to rise, and the concentration
rate of slaughtering enterprises is high.
With the rising of labor cost, the increase of environmental protection requirements and the
changes in consumption mode, the degree of scale raising of broilers further increases, and
the slaughter of standardized farms with annual production of more than 100,000 birds
account for about 40% of the total national slaughter in 2017. Broiler industry is the most
matured industry with highest organization and scale degree in China’s animal husbandry, and
has many large-scale enterprises, and top ten enterprises totally contribute to more than half
of slaughtering volume of white broilers.
(3) White broiler enterprises successively increase investment in terminal.
White broiler capacity has limited growth space, and new increased infrastructure investment
projects are less. Large-scale enterprises successively increase investment in terminal and
China Broiler Industry Research and Investment Analysis Report in 2017/18
Address: Room 905, Golden Tower. No.1 Xibahe South Road, ChaoYang District, Beijing PRC
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II
invest food processing and central kitchen projects. Sunner Development Group extends
industrial chain to terminal consumption market and expands food and catering businesses
which mainly include several first-level subsidiaries such as Sunner Food, Risheng Food,
Fengsheng Vegetable, Lemeilong Catering Management, etc., and their businesses cover
chicken food deep processing, catering chain store, bean products processing and others. CP
Group invests 1.7 billion yuan in Yiwu to build central kitchen with a daily production scale of
500,000 special packed meals and meat products deep processing project with annual
production capacity of 90,000 tons meat products.
(4) Yellow broiler raising suffered heavy losses in the first half of 2017, and the situation
turned better somewhat in the second half of 2017; enterprises speed up expansion of
iced fresh chicken market.
Under the influence of many factors such as H7N9 in the first half of 2017, the distribution
channel of live poultry was blocked across the country, and yellow broiler industry suffered
heavy losses. According to primary estimates, yellow broiler raising industry suffered a loss of
more than 5 billion yuan in the first half of 2017, which made the whole industry faced with
development crisis.
In the longer-term, yellow broiler enterprises should change profit model, perfect whole-course
cold chain control and broaden marketing channel. As a leading enterprise in yellow broiler
industry, WENS Group gradually makes transformation to a whole industrial chain business
integrating production, slaughtering, deep processing and selling by investing in poultry
slaughtering projects.
The report will make in-depth research on the development trend of domestic broiler industry
and the operation models of major enterprises and conclude the investment trends of domestic
enterprises and capital to assist enterprises, capital and insiders to grasp the moving tendency
and investment opportunities and determine suitable development mode and resources
needing integration.
China Broiler Industry Research and Investment Analysis Report in 2017/18
Address: Room 905, Golden Tower. No.1 Xibahe South Road, ChaoYang District, Beijing PRC
Tel: 86-10-64402118 Fax: 86-10-64402039 E-mail: [email protected] Web: www.cnagri.com
III
Table of Content
PART ONE ANALYSIS AND FORECAST OF GLOBAL BROILER MARKET .......... 1
1.1 CHANGES IN GLOBAL BROILER PRODUCTION AND REGIONAL
DISTRIBUTION: SLOWDOWN IN PRODUCTION AND HIGH CONCENTRATION
RATIO OF PRODUCTION ......................................................................................... 1
1.1.1 Position of Chicken in Meats ................................................................................. 1
1.1.2 Growth in Global chicken production Slowed Down ........................................... 1
1.1.3 Higher Concentration Ratio of Global Chicken Production ................................. 2
1.1.4 Forecast on Future Chicken Production Changes ............................................... 3
1.2 IMPORT AND EXPORT TRADE OF GLOBAL CHICKEN: BRAZIL AND THE
US DOMINATE EXPORT MARKET .......................................................................... 3
1.2.1 Global Chicken Exports Continued to Grow ......................................................... 3
1.2.2 High Concentration of Chicken Exporters ............................................................ 4
1.2.3 Chicken Importing Countries Were Relatively Decentralized .............................. 5
1.2.4 Forecast on Changes in Future Chicken Import and Export Trade ..................... 6
1.3 GLOBAL CHICKEN CONSUMPTION: SLOW GROWTH ................................... 6
1.3.1 The US, China and the EU Are the World’s Largest Chicken Consumers .......... 6
1.3.2 Global Chicken Consumption Grew Slowly .......................................................... 7
1.4 INTERNATIONAL COMPARISON OF WHITE BROILER INDUSTRY ................ 8
1.4.1 The Costs of Broiler Farming in China were about 30% Higher Than That in the
US and Brazil ................................................................................................................... 8
1.4.2 The Concentration of Broiler Companies in the US and Brazil Was Much Higher
Than That in China .......................................................................................................... 8
1.4.3 Great Differences of Industry Development Model and Farming Scale of
Enterprises among the US, Brazil and China .............................................................. 10
1.5 INTERNATIONAL LARGE-SCALE BROILER ENTERPRISE: TYSON ............ 11
PART TWO ANALYSIS AND FORECAST OF CHINA’S BROILER INDUSTRY ..... 13
2.1 CHINA’S CHICKEN PRODUCTION DECREASED MORE THAN 6% IN 2017 . 13
2.1.1 The Slaughter of White Broiler and Yellow Broiler Respectively Was About 4.0
Billion Birds ................................................................................................................... 13
2.1.2 The Proportion of Standardized Farming of Broilers Continued to Rise .......... 14
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IV
2.2 CHINA CHICKEN CONSUMPTION ................................................................... 16
2.2.1 China Chicken Consumption Accounted for about 14% of Meat Consumption
........................................................................................................................................ 16
2.2.2 Low Per Capita Chicken Consumption with Great Growth Potential ................ 17
2.2.3 Consumption Channels Were Dominated by Outdoor Consumption and
Household Consumption .............................................................................................. 17
2.3 CHINA’S CHICKEN TRADE .............................................................................. 18
2.3.1 Anti-dumping and Other Policies......................................................................... 18
2.3.2 Decrease in Import Volume and Increase in Import Price .................................. 20
2.3.3 Chicken and Entrails Imported from Brazil Accounted for 85% of the Total
Import Volume ................................................................................................................ 21
2.3.4 Cumulative Import Volume of Top 10 Chicken Importing Companies Accounted
for 45.32% of China’s Total Imports of Chicken and Entrails ..................................... 21
2.4 CHICKEN EXPORT IN CHINA .......................................................................... 22
2.4.1 Export Policies ...................................................................................................... 22
2.4.2 Slight Growth in Export Volume and Small Decrease in Export Price .............. 23
2.4.3 Entire Chicken (fresh or chilled) and Other Frozen Chicken Pieces Are the Main
Products of Exports in China ....................................................................................... 23
2.4.4 Hong Kong Was the Largest Export Destination of Chicken and Entrails
Originating in the mainland of China ........................................................................... 24
2.4.5 The Export Volume of TOP10 Companies Accounted for 51.32% of Total
Chicken Exports of the Mainland of China .................................................................. 24
2.5 CHINA CHICKEN SUPPLY AND DEMAND BALANCE SHEET ....................... 25
PART THREE ANALYSIS OF CHINA’S WHITE BROILER INDUSTRIAL CHAIN .. 27
3.1 BREEDER RAISING LINK: SURPLUS CAPACITY AND SERIOUS LOSSES . 27
3.1.1 Policies and Regulations...................................................................................... 27
3.1.2 The Introduction of GP Breeders Decreased for 4 Consecutive Years ............. 28
3.1.3 Inventory of (GP and Parental breeders) Basically Remained at the Level of
Previous Year ................................................................................................................. 29
3.1.4 The Farming of GP breeders Broke Even, While the Rearing of Commercial
Broilers Suffered Heavy Losses ................................................................................... 30
3.1.5 High Concentration (GP and Parental) ................................................................ 31
3.1.6 Development Trend............................................................................................... 32
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Address: Room 905, Golden Tower. No.1 Xibahe South Road, ChaoYang District, Beijing PRC
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V
3.2 BROILER RAISING LINK: SLAUGHTER DECLINES AND BROILER RAISING
MAINTAINS PROFITABLE ...................................................................................... 33
3.2.1 Policies and Regulations...................................................................................... 33
3.2.2 A Decrease of 4.5% in Slaughter .......................................................................... 33
3.2.3 Profit of Raising White Broilers Averaged RMB0.95/Bird .................................. 35
3.2.4 High Concentration............................................................................................... 36
3.2.5 Farming Modes Are Varied with “Company + Farmer” Model Accounting for
45% ................................................................................................................................. 37
3.2.6 Development Trend............................................................................................... 37
3.3 BROILER SLAUGHTERING AND PROCESSING LINK: DECREASING
OPERATION RATE AND LOW PROFIT .................................................................. 37
3.3.1 Policies and Regulations...................................................................................... 37
3.3.2 Slaughtering Capacity and Distribution .............................................................. 38
3.3.3 The Profit of Slaughtering White Broiler Was 0.2yuna/bird, down 0.15yuan/bird
from the year before ...................................................................................................... 38
3.3.4 Slaughtering Capacity of Enterprises with Annual Capacity of over 10 Million
Birds Accounted for Nearly 71% of National Broiler Slaughter .................................. 39
3.3.5 Development Trend............................................................................................... 39
3.4 CIRCULATION LINK OF CHICKEN: WHOLESALE MARKET WAS THE MAIN
BODY OF CIRCULATION ........................................................................................ 40
3.4.1 Policies and Regulations...................................................................................... 40
3.4.2 As the Main Channel, Wholesale Market Accounted for 52% of the Total
Circulation of Chicken ................................................................................................... 40
3.4.3 Market Size and Profit .......................................................................................... 41
3.4.4 Development Trend............................................................................................... 41
PART FOUR ANALYSIS OF CHINA’S YELLOW BROILER INDUSTRIAL CHAIN 42
4.1 BREEDER RAISING LINK ................................................................................ 42
4.1.1 Inventory (GP and parental breeders) Will Continue to Decrease Slightly ....... 42
4.1.2 High Concentration (GP Breeders and Parental Breeders) ............................... 42
4.1.3 Development Trend............................................................................................... 43
4.2 BROILER RAISING LINK: SLAUGHTER DECLINED ...................................... 44
4.2.1 Decrease in Slaughter .......................................................................................... 44
4.2.2 Market Size, Cost and Profit ................................................................................. 45
China Broiler Industry Research and Investment Analysis Report in 2017/18
Address: Room 905, Golden Tower. No.1 Xibahe South Road, ChaoYang District, Beijing PRC
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VI
4.2.3 Lower Concentration ............................................................................................ 46
4.2.4 Development Trend............................................................................................... 47
4.3 BROILER SLAUGHTERING AND PROCESSING LINK: OPERATION RATE
INCREASES SIGNIFICANTLY ................................................................................ 49
4.3.1 Slaughtering Capacity and Regional distribution ............................................... 49
4.3.2 Market Size and Profit .......................................................................................... 49
4.3.3 Concentration Ratio .............................................................................................. 49
4.3.4 Development Trend............................................................................................... 49
4.4 CIRCULATION LINK OF CHICKEN: FARM PRODUCE FAIR WAS THE MAIN
BODY OF CIRCULATION ........................................................................................ 50
4.4.1 Policies and Regulations...................................................................................... 50
4.4.2 Circulation Channel .............................................................................................. 51
4.4.3 Market Size and Profit .......................................................................................... 51
4.4.4 Development Trend............................................................................................... 52
PART FIVE ANALYSIS OF CHINA’S KEY BROILER ENTERPRISES ................... 53
5.1 WENS GROUP .................................................................................................. 53
5.1.1 Basic Profile .......................................................................................................... 53
5.1.2 Business Model .................................................................................................... 54
5.1.3 Key Competitive Factors ...................................................................................... 55
5.1.4 Investment Trend .................................................................................................. 56
5.1.5 Analysis of Operation Situation ........................................................................... 57
5.2 NEW HOPE LIUHE ............................................................................................ 59
5.2.1 Basic Profile .......................................................................................................... 59
5.2.2 Business model .................................................................................................... 60
5.2.3 Key Competitive Factors ...................................................................................... 61
5.2.4 Investment Trend .................................................................................................. 62
5.2.5 Analysis of Operation Situation ........................................................................... 62
5.3 SUNNER DEVELOPMENT ................................................................................ 63
5.3.1 Basic Profile .......................................................................................................... 63
5.3.2 Business Model .................................................................................................... 64
5.3.3 Key Competitive Factors ...................................................................................... 65
5.3.4 Investment Trend .................................................................................................. 66
China Broiler Industry Research and Investment Analysis Report in 2017/18
Address: Room 905, Golden Tower. No.1 Xibahe South Road, ChaoYang District, Beijing PRC
Tel: 86-10-64402118 Fax: 86-10-64402039 E-mail: [email protected] Web: www.cnagri.com
VII
5.3.5 Analysis of Operation Situation ........................................................................... 66
5.4 WELLHOPE ....................................................................................................... 67
5.4.1 Basic profile .......................................................................................................... 67
5.4.2 Business model .................................................................................................... 69
5.4.3 Key Competitive Factors ...................................................................................... 70
5.4.4 Investment Trend .................................................................................................. 71
5.4.5 Analysis of Operation Situation ........................................................................... 71
5.5 SHANDONG YISHENG LIVESTOCK AND POULTRY BREEDING CO., LTD. . 72
5.5.1 Basic Profile .......................................................................................................... 72
5.5.2 Business Model .................................................................................................... 73
5.5.3 Key Competitive Factors ...................................................................................... 74
5.5.4 Investment Trend .................................................................................................. 75
5.5.5 Analysis of Operation Situation ........................................................................... 75
5.6 SHANDONG MINHE ANIMAL HUSBANDRY CO., LTD. .................................. 76
5.6.1 Basic Profile .......................................................................................................... 76
5.6.2 Business Model .................................................................................................... 78
5.6.3 Key Competitive Factors ...................................................................................... 78
5.6.4 Investment Trend .................................................................................................. 79
5.6.5 Analysis of Operation Situation ........................................................................... 79
5.7 XIANTAN CO., LTD............................................................................................ 80
5.7.1 Basic Profile .......................................................................................................... 80
5.7.2 Business Model .................................................................................................... 82
5.7.3 Key Competitive Factors ...................................................................................... 82
5.7.4 Analysis of Operating Conditions ........................................................................ 83
5.8 DADI ANIMAL HUSBANDRY ............................................................................ 84
5.8.1 Basic profile .......................................................................................................... 84
5.8.2 Business Model .................................................................................................... 84
5.8.3 Key Competitive Factors ...................................................................................... 85
5.8.4 Investment Trend .................................................................................................. 85
5.8.5 Analysis of operation situation ............................................................................ 86
5.9 HEBEI MEIKEDUO FOODS GROUP ................................................................ 86
5.9.1 Basic profile .......................................................................................................... 86
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VIII
5.9.2 Business Model .................................................................................................... 87
5.9.3 Key Competitive Factors ...................................................................................... 87
5.9.4 Analysis of Operation Situation ........................................................................... 88
5.10 XIANGJIA ANIMAL HUSBANDRY .................................................................. 88
5.10.1 Basic profile ........................................................................................................ 88
5.10.2 Business Model .................................................................................................. 90
5.10.3 Key Competitive Factors .................................................................................... 90
5.10.4 Investment Trend ................................................................................................ 91
5.10.5 Analysis of Operation Situation ......................................................................... 92
5.11 GUANGXI CHUNMAO INVESTMENT CO., LTD. ............................................ 92
5.11.1 Basic profile ........................................................................................................ 92
5.11.2 Business Model ................................................................................................... 94
5.11.3 Key Competitive Factors .................................................................................... 94
5.11.4 Investment Trend ................................................................................................ 96
5.11.5 Analysis of Operation Situation ......................................................................... 96
5.12 CHUANWEI CHICKEN .................................................................................... 97
5.12.1 Basic profile ........................................................................................................ 97
5.12.2 Business Model .................................................................................................. 98
5.12.3 Key Competitive Factors .................................................................................... 99
5.12.4 Investment trend ................................................................................................. 99
5.12.5 Analysis of operation situation ........................................................................ 100
PART SIX ANALYSIS OF INVESTMENT IN CHINA’S BROILER INDUSTRY ...... 101
6.1 COMPREHENSIVE ANALYSIS OF INVESTMENT PROJECTS IN CHINA’S
BROILER INDUSTRY IN 2017 .............................................................................. 101
6.2 ANALYSIS OF INVESTMENT PROSPECT OF CHINA’S BROILER
INDUSTRIAL CHAIN ............................................................................................. 105
China Broiler Industry Research and Investment Analysis Report in 2017/18
Address: Room 905, Golden Tower. No.1 Xibahe South Road, ChaoYang District, Beijing PRC
Tel: 86-10-64402118 Fax: 86-10-64402039 E-mail: [email protected] Web: www.cnagri.com
IX
List of Figures
Figure 1.1 Global Chicken Production, 2010-2017 ......................................................................... 2
Figure 1.2 Chicken productions of global main producing countries............................................ 3
Figure 1.3 Global Chicken Export Volume ....................................................................................... 4
Figure 1.4 Global Chicken Export Distribution, 2017 ...................................................................... 4
Figure 1.5 Change Trends in Export Volume of Major Exporting Countries in the World, 2010-
2017 ....................................................................................................................................................... 5
Figure 1.6 Global Chicken Import Distribution, 2017 ...................................................................... 5
Figure 1.7 Changes in Chicken Consumption in Different Countries and Regions, 2010-2017
................................................................................................................................................................ 7
Figure1.8, Global Chicken Consumption, 2010-2017..................................................................... 7
Figure1.9 Concentration of Top 4 Broiler Enterprises in Brazil ..................................................... 9
Figure1.10 Concentration of Top 6 Broiler Enterprises in the US ................................................. 9
Figure1.11 Concentration of Top 10 Broiler Enterprises in China ...............................................10
Figure 2.1 Changes in Broiler Slaughter and Chicken Supply in China ....................................14
Figure2.2 Broiler Slaughter Structure in China ..............................................................................14
Figure2.3 Scale Structure of Broiler Farming in China .................................................................15
Figure2.4 Degree of Standardized Scale Farming of Broilers in China .....................................15
Figure2.5 Consumption Proportions of Various Meats in China .................................................16
Figure2.6 Changes in Per Capita Chicken Consumption in China and other Major Countries
..............................................................................................................................................................17
Figure2.7 Chicken Consumption Structure in China .....................................................................18
Figure2.8 Import Volume and Import Price of Chicken Products in China ................................20
Figure2.9 Export Volume and Export Price of China’s Chicken Products .................................23
Figure2.10 Export Destinations of China’s Chicken and their Proportions ...............................24
Figure3.1 Changes in Introduction of GP Breeders, 2010-2017 .................................................29
Figure3.2 Changes in Inventory of GP Breeders and Parental Breeders in Production, 2010-
2017 .....................................................................................................................................................30
Figure3.3 Structure of GP Breeder Enterprises in 2017 ..............................................................31
Figure3.4 Changes in Slaughter of White Broilers in China, 2010-2017 ...................................34
Figure3.5 Slaughter Distribution of Commercial White Broilers in China by Provinces ..........34
Figure3.6 Changes in Price of White Broilers, 2012-2017 ...........................................................35
Figure3.7 Changes in Broiler Raising Profit in China, 2010-2017 ..............................................36
Figure3.8 Structure of Commercial White Broiler Enterprises in 2017 ......................................36
China Broiler Industry Research and Investment Analysis Report in 2017/18
Address: Room 905, Golden Tower. No.1 Xibahe South Road, ChaoYang District, Beijing PRC
Tel: 86-10-64402118 Fax: 86-10-64402039 E-mail: [email protected] Web: www.cnagri.com
X
Figure3.9 Ex-factory Prices of Chicken Legs and Chicken Breast .............................................39
Figure3.10 Structure of White Chicken Circulation Channels .....................................................40
Figure4.1 Changes in Inventory of GP Yellow Breeders and Parental Yellow Breeders, 2011-
2017 .....................................................................................................................................................42
Figure 4.2 Structure of Yellow Broiler Breeder Enterprises in 2017 ...........................................43
Figure 4.3 Changes in Slaughter of Yellow Broilers in China, 2010-2017 .................................44
Figure4.4 Distribution of Slaughter of Commercial Yellow Broilers by Provinces ....................44
Figure4.5 Price Trend of Live Yellow Broilers, 2015-2017 ...........................................................45
Figure4.6 Changes in Yellow Broiler Farming Profit in China, 2015-2017 ................................46
Figure 4.7 Structure of Commercial Yellow Broiler Enterprises in 2017 ....................................47
Figure4.8 Yellow Broiler Circulation Channels ...............................................................................51
Figure5.1 Wens Group’s Broiler Industrial Chain ..........................................................................55
Figure5.2 Wens Group’s Slaughter and Price of Broilers ............................................................58
Figure5.3 Wens Group’s Operating Revenue and Gross Profit Rate of Broiler Business ......58
Figure5.4 Business Structure of New Hope Liuhe ........................................................................59
Figure5.5 Gross Revenue and Profit of New Hope Liuhe ............................................................63
Figure 5.6 Slaughter of Broilers .......................................................................................................63
Figure 5.7 Sunner Development’s Business Model ......................................................................64
Figure5.8 Slaughter Volume and Operating Revenue of Broilers of Sunner Development ....67
Figure5.9 Business Structure of Wellhope .....................................................................................68
Figure5.10 Sales Regions of Wellhope ..........................................................................................68
Figure5.11 Slaughter Volume of Broilers and Income from Slaughtering Business ................71
Figure5.12 Revenue Structure of Yisheng .....................................................................................72
Figure5.13 Sales Volume of Chicks ................................................................................................75
Figure5.14 Operating Revenue and Net Profit Rate .....................................................................76
Figure5.15 Revenue Structure of MINHE .......................................................................................77
Figure 5.16 MINHE’s Business Model ............................................................................................78
Figure 5.17 Sales Volume of Chicks ...............................................................................................80
Figure5.18 Operating Revenue and Net Profit of MINHE ............................................................80
Figure5.19 Product Mix of Xiantan ..................................................................................................81
Figure 5.20 Gross Operating Revenue and Net Profit of Xiantan ..............................................83
Figure5.21 Gross Revenue and Net Profit of Xiangjia Animal Husbandry ................................92
Figure 5.22 Revenue Structure of Guangxi Chunmao Investment Co., Ltd..............................93
Figure5.23 Gross Revenue and Net Profit of Guangxi Chunmao Investment Co., Ltd. ..........97
Figure5.24 Gross Revenue and Slaughter of Chuanwei Chicken ............................................100
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XI
List of Tables
Table1.1 Numbers of Factories in Each Link of Whole Broiler Industry Chain .........................12
Table2.1 Countries Signing Chicken Import Agreement with China ...........................................19
Table2.2 Changes in Imports of Chicken and Entrails by Countries (2013-2017) ...................21
Table2.3 China’s Top 10 Importing Enterprises of Chicken and Entrails and Their Market
Shares, 2017 .......................................................................................................................................22
Table2.4 Export Structure of China’s Chicken Products ..............................................................23
Table2.5 China’s Top 10 Exporting Enterprises of Chicken and Entrails and Their Market
Shares in 2017....................................................................................................................................25
Table 2.6 China Chicken Supply and Demand Balance Sheet ...................................................26
Table5.1 Top 10 Shareholders of Wens and Their Shareholding Ratios ...................................54
Table5.2 Top 10 Shareholders and Their Shareholding Ratios ...................................................60
Table5.3 Main Shareholders and Shareholding Ratios of Sunner Development .....................64
Table5.4 Top 10 Shareholders and Their Shareholding Ratios of Wellhope .............................69
Table5.5 Major Shareholders and Their Shareholding Ratios .....................................................73
Table5.6 Top 10 Shareholders and Their Shareholding Ratios ...................................................77
Table5.7 Top 10 Shareholders and Their Shareholding Ratios ...................................................81
Table5.8 Major Shareholders and Their Shareholding Ratios .....................................................84
Table5.9 Major Shareholders and Their Shareholding Ratios .....................................................87
Table5.10 Revenue Structure of Xiangjia Animal Husbandry ......................................................89
Table5.11 Major Shareholders and Their Shareholding Ratios ...................................................89
Table5.12 Major Shareholders and Their Shareholding Ratios of Guangxi Chunmao
Investment Co., Ltd. ...........................................................................................................................93
Table5.13 Major Shareholders and Their Shareholding Ratios ..................................................98
Table6.1 Major Investment Projects in China's Broiler Industry in 2017 ..................................102
Table6.2 Development Trend of Meat Poultry Industry and Assessment of Investment
Attractiveness ...................................................................................................................................105
Table6.3 Broiler Industry Investment Advice and Risks .............................................................106
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1
…….
Part Five Analysis of China’s Key Broiler Enterprises
5.1 Wens Group
5.1.1 Basic Profile
Founded in 1983, Guangdong Wens Foodstuffs Group Co., Ltd.( hereafter referred to as Wens)
is the largest broiler farming enterprise in China and stepped into pig raising industry in 1997.
By efficient industrialization model, it has become the No.1 of the industry.
(1) Business structure: At present, the Group takes chicken raising and hog farming as its
leading business, and broiler raising accounts for about 30% of its overall business; other
farming and sales businesses include cows, ducks, layers, deep-sea fish, sheep, eat pigeons,
etc.; supporting businesses are food processing, modern agricultural and animal husbandry
equipment manufacturing, veterinary drug production, and fresh food circulation chain.
(2) Sales areas: Guangdong and Guangxi are the major sales regions with sales share of
about 54%; East China, Central China and the Southwest respectively account for 23%, 11%,
and 9%; the sales proportion is 1% for North China, the Northeast and the Northwest
respectively.
(3) Sales channels: The main customer groups of commercial hogs and mutton sheep are
wholesalers and meat processing plants; the main customer groups of commercial broilers,
ducks, eggs, meat pigeons, deep-sea fish and dairy products are wholesalers and terminal
retailers; the main customer groups of raw milk are dairy products processing enterprises; the
main customer groups of agricultural and animal husbandry equipment and veterinary drugs
are farming enterprises, including Wens’ subordinate farming companies, subsidiaries, and
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2
farming enterprises of the industry; the main customers of fresh products are chain stores,
and agencies and organizations.
Table5.1 Top 10 Shareholders of Wens and Their Shareholding Ratios
Name of Institution or Fund Shareholding (share) Shareholding Ratios
Wen Pengcheng 217 million 4.15%
Yan Juran 149 million 2.85%
Liang Huanzhen 143 million 2.74%
Wen Junsheng 140 million 2.68%
Li Wocan 132 million 2.52%
Wen Xiaoqiong 129 million 2.48%
Wen Zhifen 126 million 2.42%
Huang Bochang 109 million 2.08%
Yan Juneng 106 million 2.03%
Wen Muhuan 105 million 2.02%
Source of data: company announcement
5.1.2 Business Model
Centered on broiler raising business, Wens has extended its industrial chain to the upstream
and downstream. The upstream industry includes feed, food trade, veterinary drug and
vaccines, and agricultural and animal husbandry equipment; and the downstream industry
includes broiler slaughtering, chicken product processing, fresh food chain, and retail business.
Wens develops broiler raising business adhering to “Wens Model” with close-type “company
+ farmer(or family farm)” as the core. According to the technical difficulty, labor intensity, capital,
market and the allocation of other resources in the management of raising industrial chain, the
company cooperates with farmers in entrusted farming mode, and performs a rational division
of labor based on the requirements of industrial chain management. Wens and farmers
assume different responsibilities and obligations in the production process of commercial
broilers and commercial hog products.
China Broiler Industry Research and Investment Analysis Report in 2017/18
Address: Room 905, Golden Tower. No.1 Xibahe South Road, ChaoYang District, Beijing PRC
Tel: 86-10-64402118 Fax: 86-10-64402039 E-mail: [email protected] Web: www.cnagri.com
3
Figure5.1 Wens Group’s Broiler Industrial Chain
Source of data: company announcement、BOABC
5.1.3 Key Competitive Factors
(1) The close-type “company + farmer (or family farm)” model adopted by Wens Group has
the advantages of an efficient industrial development model; this model is conducive to scale
expansion and cost control, and is in line with the development direction of moderate scale
farming and modern farming advocated by the government.
(2) Advantages of advanced technology system: The company has established a complete
production technology management system and formed a four-level technology management
structure including the headquarters technology center (research institute), business division,
production technology department of regional management companies, and technology
management group of farming companies.
China Broiler Industry Research and Investment Analysis Report in 2017/18
Address: Room 905, Golden Tower. No.1 Xibahe South Road, ChaoYang District, Beijing PRC
Tel: 86-10-64402118 Fax: 86-10-64402039 E-mail: [email protected] Web: www.cnagri.com
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(3) Enterprise management advantages based on full information coverage: The company
follows the management philosophy of “down shift of management center and highly
centralized data”, and uses internet management strategy to establish a cloud data center to
realize information management of production and operation data such as production, supply,
sales, human resources, finance, materials and others.
(4) Advantages of sales network: Wens has expanded market with farming companies in
various regions of the country as regional sales centers, and built the sales models of regional
platform sales and spot transactions to ensure timely sale of products produced by the Group.
(5) Experienced management team: The company's senior management team has been
trained internally, and experienced first-line production management, and fully recognized the
culture of Wens.
5.1.4 Investment Trend
(1) Farming: On January 18, 2017, Wens and the government of Ruyuan county held the
signing ceremony of integrated chicken farming project in Ruyuan County Government.
According to the plan, Wens will invest in an integrated chicken company and a layer farm
with capacity of 500,000 sets in Ruyuan County, and build supporting facilities including the
project headquarters, feed factory, farms, sales department, technical service centers, staff
quarters, etc.. After the project is completed, it is estimated that 18 million broilers and 8,000
tons of eggs will be marketed annually
(2) Slaughtering: In July 2017, Wens Group invested in Wens Jiafeng slaughtering project with
annual slaughter capacity of 50 million live poultry, and Wens’ slaughter capacity in Xinxing
will increase to more than 80 million birds after the completion of this project. As a leading
China Broiler Industry Research and Investment Analysis Report in 2017/18
Address: Room 905, Golden Tower. No.1 Xibahe South Road, ChaoYang District, Beijing PRC
Tel: 86-10-64402118 Fax: 86-10-64402039 E-mail: [email protected] Web: www.cnagri.com
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company in yellow broiler industry, Wens Group has gradually transformed itself into a whole
industrial chain enterprise integrating production, slaughtering, deep processing and sales by
investing in poultry slaughtering projects. After this slaughter project was completed, Wens’
self-built poultry slaughtering capacity only accounts for about 10% of its total slaughter of
broilers, and still can’t meet the development needs of its fresh yellow broiler business.
(3) Fresh products chain stores: At present, Wens has opened more than 200 chain stores of
Wens Shengxian and Wens Xianpin for family consumption mainly in Guangdong. Wens is
spreading chain stores in Hubei, Hunan, Hangzhou and other regions, and cooperates with e-
commerce enterprises such as JD and Taobao to expand market.
(4) Feed: Wens Group has cooperated with Twins Group to carry out customized feed
processing (OEM) in some regions, marking the start of transformation and upgrading of
China's animal husbandry industry and feed industry.
5.1.5 Analysis of Operation Situation
In the 30 years before 2013, the operating revenue of broiler business accounted for more
than 50% of Wens Group’s total operating income, being its main source of profit. Affected by
the bird flu in 2013, its broiler business suffered heavy loss and its operating income declined.
From 2014 to 2016, the broiler business grew slowly with a growth rate of approximately 3-
5%. In 2016, its operating income of broiler business increased to RMB18.593 billion,
accounting for 31.32% of the total operating revenue.
It is estimated that Wens’ slaughter, operating income and gross profit of broiler business in
2017 respectively were 800 million birds, RMB16.9 billion and 3.55%, separately down 2.32%,
9.11%, and 7.46% from 2016.
China Broiler Industry Research and Investment Analysis Report in 2017/18
Address: Room 905, Golden Tower. No.1 Xibahe South Road, ChaoYang District, Beijing PRC
Tel: 86-10-64402118 Fax: 86-10-64402039 E-mail: [email protected] Web: www.cnagri.com
6
Figure5.2 Wens Group’s Slaughter and Price of Broilers
Source of data: BOABC, company announcement
Figure5.3 Wens Group’s Operating Revenue and Gross Profit Rate of Broiler Business
Source of data: BOABC, company announcement
………….
0
2
4
6
8
10
12
14
16
0
2
4
6
8
10
2012 2013 2014 2015 2016 2017E
Unit:yuan/kgUnit:100million birds
slaughter prices of broilers
-5.00%
0.00%
5.00%
10.00%
15.00%
20.00%
150
155
160
165
170
175
180
185
190
2012 2013 2014 2015 2016 2017E
Unit:100million yuan
revenue of boiler business gross profit rate
China Broiler Industry Research and Investment Analysis Report in 2017/18
Address: Room 905, Golden Tower. No.1 Xibahe South Road, ChaoYang District, Beijing PRC
Tel: 86-10-64402118 Fax: 86-10-64402039 E-mail: [email protected] Web: www.cnagri.com
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About BOABC (Cnagri.com)
BOABC——As leader in China's modern agriculture service industry, BOABC was
established in 1996, by virtue of nearly 20 years' accumulation in China's agriculture and
food industry, as well as our experience in industry data, intelligence , information
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enterprises, institutions, investors, consumers. Our services including agricultural
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them to create greater business value.
Related Reports
China’s Livestock Market Weekly Report
China’s Livestock Market Annual Report
Research Report on China’s Hog Industry Development
Research Report on China’s Broiler Industry Development
Research Report on China’s Animal Biological Product Industry
Research Report on China’s Piglet Feedstuff Industry
China Broiler Industry Atlas
China Layer Industry Atlas
China Hog Industry Atlas
Special Survey Service
With 15 years of industry research experience, BOABC is China's best data, information,
consulting service provider in agricultural and food fields. We have successfully provided
nearly a thousand Chinese and overseas enterprises and governmental agencies with all
kinds of special research services including industrial special subject research, market
research, strategy consulting, feasibility study on fund-raising investment alternative before
listing, regional planning, business plans and so on.
Typical Cases:
In 2005, provide Beijing Kaoshanju Group with research analysis before entering local
chicken breeding, and sales market;
In 2005, provide British Publishing Company with China’s animal health market research;
In 2006, successfully implement China’s animal health market research in 10 provinces and
municipalities for French MERIAL Group;
In 2008, provide duck research for GERSON LEHRMAN GROUP INC;
In 2011, provide a survey on poultry salmonella in China for a South Korean company.
In 2013, provide poultry market depth research in Anhui/Henan/Jiangxi province for jiangsu
lihua company.
In 2015, provide Avian influenza vaccine study for a Japanese company.
In 2015, provide poultry vaccine market research for a professional animal health industry
multinational group.
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