Aquafeed firm Guangdong Haid reports strong 2019 results

Published on
February 26, 2020

Guangdong Haid, a leading supplier of feed and medications to China’s aquaculture sector, raised its revenues by 13 percent in 2019 to CNY 4.76 billion (USD 666 million, EUR 618 million), according to its year-end results.

The company’s net profit attributable to shareholders rose 15 percent to CNY 1.65 billion (USD 231 million, EUR 214 million).

The results will comfort investors even though Haid and similar firms have struggled to get their products delivered to customers due to travel restrictions imposed as a result of the coronavirus outbreak. Its reach into Hubei Province – ground zero of the virus’ outbreak and a center for the production of freshwater species like crayfish and crabs – has been particularly disrupted.

Partially in response to the coronavirus, feed companies including Haid, the Tongwei Group, and Liuhe New Hope each issued a series of price hike notices to customers this week. All will up their pig feed prices by CNY 100 (USD 14, EUR 13) per ton due to higher transport costs as national and secondary roads remain closed due to efforts to limit the spread of the coronavirus. Similar increases haven’t been announced for aquafeed, but the cost of fishmeal rose CNY 2,000 (USD 142, EUR 153) per ton at Chinese ports in February, according to figures from China’s Department of Agriculture. 

Haid’s share price has risen 34 percent year-on-year, as of 19 February. The company, which recently opened a new shrimp feed plant in Ecuador, is on course to increase its sales of its aquafeed by 20 percent in value terms this year, according to Sun Yang, an analyst covering the firm at China International Finance Corp, a securities firm. Sun based that prediction on growing demand in the freshwater crustacean and premium finfish aquaculture sectors.

Recent results for Guangdong Haid suggest consolidation of the sector is driving increased demand for both feed and antibiotics for fish farms. While the company hasn’t broken out its 2019 sales figures, there was a 16 percent rise in Haid’s sales of feed to the aquatic sector in the first half of last year, contrasting to a six percent drop in pig feed sales by Haid. Also, its sale of shrimp seedlings rose 11.2 percent to CNY 208 million (USD 30.2 million). Haid’s report for the first half of the year highlights that profit margins for Haid’s aquatic antibiotics stood at 57.2 percent for the six months of 2019.

The future for Chinese aquaculture is bright, Lin Li, dean of the college of animal science at Guangdong Comprehensive Aquatic Disease Prevention Centre, wrote on his Weibo microblog. While the coronavirus outbreak has caused short-term pain in the sector, positives may come in the long-term, Lin said.

“I am very optimistic because people will now turn away from wild animals and aquatic products will be more popular,” he wrote.

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