(Yicai Global) April 2 -- China's New Hope Liuhe has almost tripled its net profit last year as meat production developments led to a record high gain in its feed business. The agricultural giant intends to issue new shares to fund new pig farms.
New Hope Liuhe boosted its net profit to CNY5 billion (USD704.1 million), the Chengdu-base firm said in a statement yesterday. Its revenue rose by 19 percent to CNY82.1 billion (USD11.6 billion).
The over 20-year-old company will issue new shares via private placement, looking to raise up to CNY4 billion. Some CNY3.2 billion of the proceeds will be used for 14 new pig breeding projects and the rest to replenish its working capital.
Four pig farms in Sichuan, Hunan, Guizhou and Henan provinces will be finished in September to boost the firm's annual inventory by 1.2 million swine. A fifth of the total investment of CNY2 billion will be self-funded and the rest covered by bank loans.
The company's animal feed business made up more than half of the year's revenue at CNY42.4 billion, rising by 8 percent from 2018. The related gross profit widened by 15 percent to CNY3.4 billion, a record high.
Other segments were also looking up. Poultry business accounted for more than a quarter of the total operating income. That gross profit surged by 43 percent to CNY2.3 billion.
Pork production revenue more than doubled and the related gross profit margin climbed by 22 percentage points to nearly 39 percent.
The gross profit of New Hope Liuhe's food processing business soared by 37 percent.
New Hope Liuhe's stock price [SHE: 000876] gained 3.3 percent to CNY30.94 (USD4.35) this morning. The Shenzhen Component Index climbed by 0.4 percent.
Editor: Emmi Laine