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Broiler

中国大豆及油脂油料报告（月报）

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November 2018

Report on Development and Investment of

China’s Broiler Industry（2018-2019）

Report on Development and Investment of China’s Broiler Industry

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) In 2018, the slaughter of white broilers decreased by about 5%, and the feeding of

breeder and broiler was highly profitable.

In 2018, China’s introduction of GP white broiler breeders remained low, and the inventory of

parent breeders was lower than the normal level of 35 million sets. Due to the shortage of

parent breeders, the prices of commercial chicks rose continuously, with the highest level of

over 8 yuan/bird. Breeder rearing got rid of the predicament of loss, and achieved great

growth in profits. The reduction in the supply of commercial chicks made broiler slaughter

dropped to about 4.0 billion birds, a year-on-year decrease of 4.76%. The price of live broiler

rose over 20% than 2017, and the rearing profit reached up to 3 yuan/bird, the highest level in

a decade.

Great growths in the prices of chicks and live broilers made breeder enterprises and

commercial broiler enterprises achieved profitability comprehensively. Breeder enterprises

realized a year-on-year growth of over 50% in operating revenue, with a net profit rate of

more than 10%. The operating revenue of commercial broiler enterprises increased by 10%

from the previous year, while net profit more than tripled.

(2) The scale of white broiler farming continued to rise, corporate restructuring was

increasing, and the concentration has been further improved.

With the growth in labor costs, the increases of environmental protection requirements, and

the changes in consumption patterns, the scale of broiler rearing has been further improved.

In 2018, the production of China’s standardized scale feeding farms with annual slaughter of

over 100,000 birds accounted for 35.84% of the national broiler production, which rose by

1.85% from 33.99% last year.




II

Broiler industry is the most mature, organized and scaled industry in China's animal

husbandry sector, and the concentration is expected to increase further. On the one hand,

backward operation and management modes and serious losses will make large enterprises

whose capital chains have broken be gradually merged (for example, Henan Doyoo Group

has issued judicial restructuring); on the other hand, large-scale enterprises with strong

competitiveness will continue to expand and raise their international status through

acquisitions (for example, Sunner Development, the largest slaughterhouse, has established

a broiler industry M&A fund with a total scale of nearly 2 billion yuan). Increasing broiler

enterprise reshuffles will further improve the concentration. In 2018, the total slaughter of

TOP10 enterprises accounted for more than 66.38% of the national slaughter of white

broilers, an increase of 2.23% over the previous year.

(3) New policies of chicken trade have been implemented, and imports of chicken were

increasing continuously.

Brazil is China’s largest source country of imported chicken. On June 8, 2018, China’s

Ministry of Commerce decided to implement temporary anti-dumping measures in the form of

margin for imported white feather broiler products originating in Brazil. In August, the Ministry

of Commerce extended the anti-dumping investigation period of Brazilian white feather broiler

products for 6 months. Due to obvious price advantage of Brazilian chicken feet and chicken

wings, China’s imports of chicken products from Brazil still slightly increased this year.

On US chicken products, the Tariff Commission of the State Council decided to terminate

anti-dumping duties and countervailing duties on imported white feather broiler products

originating in the United States from February 27, 2018. In August, the Tariff Commission of

the State Council decided to levy an additional tariff of 10% on chicken breasts, prepared or

preserved turkey met, and entrails originating in the United States. In addition, under the

impact of Sino-US trade war, China didn’t import chicken form the United States in 2018.

However, China opened imports of chicken from Belarus, Ukraine, Thailand and Russia in

2018. The competition between the source countries of chicken will become increasingly




III

fierce, and China’s import volume of chicken will continue to increase.

(4) In 2018, yellow broiler feeding achieved better benefits, and the slaughter increased

by about 3%; large-scale enterprises developed chilled chicken products rapidly.

In 2018, there weren’t outbreaks of major diseases in China, so the external environment of

yellow broiler production was relatively good. The price of live broiler increased by 17% from

the previous year; the rearing benefit was about 4 yuan/bird, a growth of 2.5 yuan/bird from

2017; the production of live broilers reached about 3.8 billion birds, up about 3% from 2017.

Despite the improved benefit in 2018, yellow broiler sector still faces the severe challenge of

transformation and upgrading. Enterprises need to change their profit models, improve the

whole course cold chain, and broaden marketing channels. As a leading company in yellow

broiler industry, Wens has carried out transformation and upgrading of its broiler business to

build channel and brand advantages downstream with “controlling channels and directly

delivering products to consumers” as its goal. It will develop a new food chain business model

of “livestock and poultry farming – slaughtering and processing – central warehousing –

logistics – chain stores” by the way of “company + store”. Wens Group’s broiler slaughter

capacity has raised to 130 million birds by building new farms and purchasing broiler

slaughterhouses. Hunan Xiangjia Animal Husbandry Co., Ltd. slaughtered more than 10

million broilers, its sales revenue of chilled chicken products accounted for over 50% of its

total sales revenue, which makes its gross profit margin significantly higher than the average

of broiler industry.

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.




IV

Table of Content

PART ONE ANALYSIS AND FORECAST OF GLOBAL BROILER MARKET

1.1 CHANGES IN GLOBAL BROILER PRODUCTION AND REGIONAL

DISTRIBUTION: SLOWDOWN IN PRODUCTION AND HIGH CONCENTRATION

RATIO OF PRODUCTION

1.1.1 Position of Chicken in Meats

1.1.2 Growth in Global chicken production Slowed Down

1.1.3 Higher Concentration Ratio of Global Chicken Production

1.1.4 Forecast on Future Chicken Production Changes

1.2 IMPORT AND EXPORT TRADE OF GLOBAL CHICKEN: BRAZIL AND THE US

DOMINATE EXPORT MARKET

1.2.1 Global Chicken Exports Continued to Grow

1.2.2 High Concentration of Chicken Exporters

1.2.3 Chicken Importing Countries Were Relatively Decentralized

1.2.4 Forecast on Changes in Future Chicken Import and Export Trade

1.3 GLOBAL CHICKEN CONSUMPTION: SLOW GROWTH

1.3.1 The US, China and the EU Are the World’s Largest Chicken Consumers

1.3.2 Global Chicken Consumption Grew Slowly

1.4 INTERNATIONAL COMPARISON OF WHITE BROILER INDUSTRY

1.4.1 The Costs of Broiler Farming in China were about 30% Higher Than That in the US

and Brazil

1.4.2 The Concentration of Broiler Companies in the US and Brazil Was Much Higher Than

That in China

1.4.3 Great Differences of Industry Development Model and Farming Scale of Enterprises

among the US, Brazil and China

1.5 INTERNATIONAL LARGE-SCALE BROILER ENTERPRISE: TYSON

PART TWO ANALYSIS AND FORECAST OF CHINA’S BROILER INDUSTRY

2.1 CHINA’S CHICKEN PRODUCTION DECREASED IN 2018

2.1.1 The Slaughter of White Broiler Decreased, the Slaughter of Yellow Broiler Increased

2.1.2 The Proportion of Standardized Farming of Broilers Continued to Rise




V

2.2 CHINA CHICKEN CONSUMPTION

2.2.1 China Chicken Consumption Accounted for about 14% of Meat Consumption

2.2.2 Low Per Capita Chicken Consumption with Great Growth Potential

2.2.3 Consumption Channels Were Dominated by Outdoor Consumption and Household

Consumption

2.3 CHINA’S CHICKEN TRADE

2.3.1 Anti-dumping and Other Policies

2.3.2 Decrease in Import Volume

2.3.3 Imported chicken products were frozen chiken-dominated

2.3.4 Chicken and Entrails Imported from Brazil Accounted for 85% of the Total Import

Volume

2.4 CHICKEN EXPORT IN CHINA

2.4.1 Export Policies

2.4.2 Slight Growth in Export Volume

2.4.3 Structure of exported chicken products: the proportion of cooked chicken was higher

than that of chilled and frozen chicken

2.4.4 Frozen and chilled chicken was mainly exported to Hong Kong, and cooked chicken

was mainly exported to Japan

2.5 CHINA CHICKEN SUPPLY AND DEMAND BALANCE SHEET

PART THREE ANALYSIS OF CHINA’S WHITE BROILER INDUSTRIAL CHAIN

3.1 BREEDER RAISING LINK: TURNING LOSSES INTO GAINS, ACHIEVING

GREAT GROWTH IN PROFIT

3.1.1 Policies and Regulations

3.1.2 The Introduction of GP Breeders Remained Low

3.1.3 Inventory of GP breeders rebounded from a low level, and supply of parent breeders

in production was insufficient.

3.1.4 Great growth in rearing benefit of breeders

3.1.5 High Concentration (GP and Parental)

3.1.6 Development Trend

3.2 BROILER RAISING LINK: DECREASED SLAUGHTER AND HIGH FEEDING

BENEFIT





VI

3.2.2 Decrease of 5% in Slaughter

3.2.3 Profit of Raising White Broilers Averaged RMB3/Bird

3.2.4 High Concentration

3.2.5 Farming Modes Are Varied with “Company + Farmer” Model Accounting for 45%


3.3 BROILER SLAUGHTERING AND PROCESSING LINK: DECREASED

OPERATION RATE AND SMALL LOSS


3.3.2 Slaughtering Capacity and Distribution

3.3.3 Small Loss in Slaughtering of White Broiler

3.3.4 Slaughtering Capacity of Enterprises with Annual Capacity of over 10 Million Birds

Accounted for Nearly 71% of National Broiler Slaughter


3.4 CIRCULATION LINK OF CHICKEN: WHOLESALE MARKET WAS THE MAIN

BODY OF CIRCULATION


3.4.2 Catering enterprises and food processing companies were the main circulation

channels of chicken

3.4.3 Market Size and Profit


PART FOUR ANALYSIS OF CHINA’S YELLOW BROILER INDUSTRIAL CHAIN

4.1 BREEDER RAISING LINK

4.1.1 Inventory (GP and parental breeders) Increased Slightly

4.1.2 High Concentration (GP Breeders and Parental Breeders)


4.2 BROILER RAISING LINK: SLAUGHTER INCREASED

4.2.1 Increased in Slaughter

4.2.2 Market Size, Cost and Profit

4.2.3 Lower Concentration


4.3 BROILER SLAUGHTERING AND PROCESSING LINK: OPERATION RATE

INCREASES SIGNIFICANTLY




VII

4.3.1 Slaughtering Capacity and Regional distribution


4.3.3 Concentration Ratio


4.4 CIRCULATION LINK OF CHICKEN: FARM PRODUCE FAIR WAS THE MAIN

BODY OF CIRCULATION


4.4.2 Circulation Channel



PART FIVE ANALYSIS OF CHINA’S KEY BROILER ENTERPRISES

5.1 WENS GROUP

5.1.1 Basic Profile

5.1.2 Business Model

5.1.3 Key Competitive Factors

5.1.4 Investment Trend

5.1.5 Analysis of Operation Situation

5.2 NEW HOPE LIUHE

5.3 SUNNER DEVELOPMENT

5.4 WELLHOPE

5.5 SHANDONG YISHENG LIVESTOCK AND POULTRY BREEDING CO., LTD.

5.6 SHANDONG MINHE ANIMAL HUSBANDRY CO., LTD.

5.7 XIANTAN CO., LTD.

5.8 DADI ANIMAL HUSBANDRY

5.9 HEBEI MEIKEDUO FOODS GROUP6

5.10 XIANGJIA ANIMAL HUSBANDRY

5.11 GUANGXI CHUNMAO INVESTMENT CO., LTD.

5.12 CHUANWEI CHICKEN

5.13 JIANGSU LIHUA




VIII

PART SIX ANALYSIS OF INVESTMENT IN CHINA’S BROILER INDUSTRY

6.1 MAJOR INVESTMENT PROJECTS IN CHINA'S BROILER INDUSTRY IN 2018

6.2 ANALYSIS OF INVESTMENT CHARACTERISTICS OF CHINA’S BROILER

INDUSTRY IN 2018 (ANALYSIS OF INVESTORS, INVESTMENT AREAS, FIELDS,

SCALES, MODELS, ETC.)

6.3 ANALYSIS OF INVESTMENT PROSPECT OF CHINA’S BROILER

INDUSTRIAL CHAIN

6.3.1 Analysis of Investment Prospect of White Broiler Industrial Chain (Industry potential,

superior areas, key links, good assets, and investment risks)

6.3.2 Analysis of Investment Prospect of Yellow Broiler Industrial Chain

List of Figures

Figure 1.1 Global Chicken Production, 2010-2018

Figure 1.2 Chicken productions of global main producing countries

Figure 1.3 Global Chicken Export Volume

Figure 1.4 Global Chicken Export Distribution, 2018

Figure 1.5 Change Trends in Export Volume of Major Exporting Countries in the World,

2010-2018

Figure 1.6 Global Chicken Import Distribution, 2018

Figure 1.7 Changes in Chicken Consumption in Different Countries and Regions, 2010-2018

Figure1.8, Global Chicken Consumption, 2010-2018

Figure1.9 Concentration of Top 4 Broiler Enterprises in Brazil

Figure1.10 Concentration of Top 6 Broiler Enterprises in the US

Figure1.11 Concentration of Top 10 Broiler Enterprises in China0

Figure 2.1 Changes in Broiler Slaughter and Chicken Supply in China

Figure2.2 Broiler Slaughter Structure in China

Figure2.3 Scale Structure of Broiler Farming in China

Figure2.4 Degree of Standardized Scale Farming of Broilers in China

Figure2.5 Consumption Proportions of Various Meats in China

Figure2.6 Changes in Per Capita Chicken Consumption in China and other Major Countries

Figure2.7 Chicken Consumption Structure in China

Figure2.8 Import Volume and Import Price of Chicken Products in China




IX

Figure2.9 Export Volume and Export Price of China’s Chicken Products

Figure2.10 Export Destinations of China’s Chicken and their Proportions

Figure3.1 Changes in Introduction of GP Breeders, 2010-2018

Figure3.2 Changes in Inventory of GP Breeders and Parental Breeders in Production,

2010-2018

Figure3.3 Structure of GP Breeder Enterprises in 2018

Figure3.4 Changes in Slaughter of White Broilers in China, 2010-2018

Figure3.5 Slaughter Distribution of Commercial White Broilers in China by Provinces

Figure3.6 Changes in Price of White Broilers, 2012-2018

Figure3.7 Changes in Broiler Raising Profit in China, 2010-2018

Figure3.8 Structure of Commercial White Broiler Enterprises in 2018

Figure3.9 Ex-factory Prices of Chicken Legs and Chicken Breast

Figure3.10 Structure of White Chicken Circulation Channels

Figure4.1 Changes in Inventory of GP Yellow Breeders and Parental Yellow Breeders,

2011-2018

Figure 4.2 Structure of Yellow Broiler Breeder Enterprises in 2018

Figure 4.3 Changes in Slaughter of Yellow Broilers in China, 2010-2018

Figure4.4 Distribution of Slaughter of Commercial Yellow Broilers by Provinces

Figure4.5 Price Trend of Live Yellow Broilers, 2015-2018

Figure4.6 Changes in Yellow Broiler Farming Profit in China, 2015-2018

Figure 4.7 Structure of Commercial Yellow Broiler Enterprises in 2018

Figure4.8 Yellow Broiler Circulation Channels

Figure5.1 Wens Group’s Broiler Industrial Chain

Figure5.2 Wens Group’s Slaughter and Price of Broilers

Figure5.3 Wens Group’s Operating Revenue and Gross Profit Rate of Broiler Business

Figure5.4 Business Structure of New Hope Liuhe

Figure5.5 Gross Revenue and Profit of New Hope Liuhe

Figure 5.6 Slaughter of Broilers

Figure 5.7 Sunner Development’s Business Model

Figure5.8 Slaughter Volume and Operating Revenue of Broilers of Sunner Development

Figure5.9 Business Structure of Wellhope

Figure5.10 Sales Regions of Wellhope

Figure5.11 Slaughter Volume of Broilers and Income from Slaughtering Business

Figure5.12 Revenue Structure of Yisheng

Figure5.13 Sales Volume of Chicks




X

Figure5.14 Operating Revenue and Net Profit Rate

Figure5.15 Revenue Structure of MINHE

Figure 5.16 MINHE’s Business Model

Figure 5.17 Sales Volume of Chicks

Figure5.18 Operating Revenue and Net Profit of MINHE

Figure5.19 Product Mix of Xiantan

Figure 5.20 Gross Operating Revenue and Net Profit of Xiantan

Figure5.21 Gross Revenue and Net Profit of Xiangjia Animal Husbandry

Figure 5.22 Revenue Structure of Guangxi Chunmao Investment Co., Ltd.

Figure5.23 Gross Revenue and Net Profit of Guangxi Chunmao Investment Co., Ltd.

Figure5.24 Gross Revenue and Slaughter of Chuanwei Chicken

List of Tables

Table1.1 Numbers of Factories in Each Link of Whole Broiler Industry Chain

Table2.1 Countries Signing Chicken Import Agreement with China

Table2.2 Changes in Imports of Chicken and Entrails by Countries (2013-2018)

Table2.3 China’s Top 10 Importing Enterprises of Chicken and Entrails and Their Market

Shares, 2018

Table2.4 Export Structure of China’s Chicken Products

Table 2.5 China Chicken Supply and Demand Balance Sheet

Table5.1 Top 10 Shareholders of Wens and Their Shareholding Ratios

Table5.2 Top 10 Shareholders and Their Shareholding Ratios

Table5.3 Main Shareholders and Shareholding Ratios of Sunner Development

Table5.4 Top 10 Shareholders and Their Shareholding Ratios of Wellhope

Table5.5 Major Shareholders and Their Shareholding Ratios





Table5.10 Revenue Structure of Xiangjia Animal Husbandry


Table5.12 Major Shareholders and Their Shareholding Ratios of Guangxi Chunmao

Investment Co., Ltd.





XI

Table6.1 Major Investment Projects in China's Broiler Industry in 2018

Table6.2 Development Trend of Meat Poultry Industry and Assessment of Investment

Attractiveness

Table6.3 Broiler Industry Investment Advice and Risks

China Broiler Industry Research and Investment Analysis Report in 2018/18



12

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