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Muyuan Foods Co Ltd Class A 002714

Morningstar Rating
¥45.88 +0.30 (0.66%)
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Company Report

Cost Savings and Improving Hog Prices to Drive Profit Growth for Muyuan

Muyuan Foods operates an integrated model in hog breeding and production, profiting from selling hogs at scale. The company has invested heavily between 2020 and 2022 to increase its hog production capacity. Although it is the largest hog producer in China, its volume only makes up a high-single-digit market share given the fragmented industry. China hog supply is made up of a large number of small producers. The company believes that the industry will evolve in the interest of resource efficiency and better food safety practices, and large producers with scale should see opportunities. In the meantime, the fragmented industry leads to more volatile hog price cycles, which Muyuan strives to manage by lowering production costs in order to buffer profit during a downcycle.

Price vs Fair Value

002714 is trading at a 852% premium.
Price
¥45.88
Fair Value
¥14.00
Uncertainty
High
1-Star Price
¥84.40
5-Star Price
¥93.90
Economic Moat
Fbfkk
Capital Allocation
Rksjnmx

Bulls Say, Bears Say

Bulls

As Muyuan builds out its production capacity, it should generate much higher absolute profit during upcycles, which can be reinvested to strengthen its competitiveness.

Bears

Muyuan’s cost advantage could diminish over the longer term as competitors also scale up their operations.

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Trading Information

Previous Close Price
¥45.58
Day Range
¥44.8046.03
52-Week Range
¥31.1750.07
Bid/Ask
¥45.88 / ¥45.89
Market Cap
¥250.75 Bil
Volume/Avg
20.0 Mil / 24.8 Mil

Key Statistics

Price/Earnings (Normalized)
23.65
Price/Sales
2.19
Dividend Yield (Trailing)
1.61%
Dividend Yield (Forward)
Total Yield
1.61%

Company Profile

Muyuan Foods is the largest hog producer in China and operates an integrated model, stretching from feed processing, swine medicine development, and sow breeding, to hog raising and slaughtering. The company derives over 80% of its sales from hog production and has increased its exposure to hog processing in recent years. In recent years, feed processing has also taken up a mid-single-digit percentage of sales. Muyuan’s hog output has increased 46 times between 2013 and 2022.
Sector
Consumer Defensive
Industry
Farm Products
Stock Style Box
Large Core
Total Number of Employees
131,276

Competitors

Valuation

Metric
002714
HRL
TSN
Price/Earnings (Normalized)
23.6521.1732.64
Price/Book Value
4.102.211.18
Price/Sales
2.191.450.40
Price/Cash Flow
13.1414.9112.73
Price/Earnings
002714
HRL
TSN

Financial Strength

Metric
002714
HRL
TSN
Quick Ratio
0.240.970.81
Current Ratio
0.661.731.77
Interest Coverage
−0.9813.34−0.65
Quick Ratio
002714
HRL
TSN

Profitability

Metric
002714
HRL
TSN
Return on Assets (Normalized)
−2.66%6.50%0.45%
Return on Equity (Normalized)
−7.97%11.35%0.89%
Return on Invested Capital (Normalized)
−1.64%8.17%1.85%
Return on Assets
002714
HRL
TSN
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Economic Moat
Market Cap
Archer-Daniels Midland Co
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Tyson Foods Inc Class A
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Bunge Global SA
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Mowi ASA ADR
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Mowi ASA
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SalMar ASA
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SalMar ASA ADR
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Gpxgxg$7.1 Bil
Charoen Pokphand Foods PCL Units Non-Voting Depository Receipt
CPOUF
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Charoen Pokphand Foods PCL Shs Foreign Registered
CHPFF
Ffmj$5.1 Bil
Cal-Maine Foods Inc
CALM
Cyw$3.2 Bil

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