(Yicai Global) Aug. 28 -- China's leading meat product company, China Yurun Food Group Ltd. [HKG:1068] saw operating income fall 34.4 percent annually in the first six months to USD742 million (CNY580 million) while major domestic competitor Henan Shuanghui Investment & Development Co. [SHE:000895] reported an operating income of USD3.61 billion for the same period.
Yurun Group suffered a net loss of USD70.32 million in the first half with the chilled, fresh and frozen meat segments accounting for much of the slump. These businesses saw income fall to USD607 million, down 40 percent from the same period last year. Henan Shuanghui brought in overall net profit of USD286 million.
Income at the meat packer's low-temperature meat product segment fell 6.3 percent.
The firm has seen its financial performance slump in recent years. Last year, it reported a 17-percent annual fall in operating income to USD1.75 billion. Its record-high came in 2011 at USD4.13 billion.
Decline in pork demand among Chinese consumers is a common challenge for the country's meat producers, said Zhu Danpeng, a food industry analyst at China Brand Research Institute. Management at Henan Shuanghui is superior to that of Yurun Food, he added.
Henan Shuanghui acquired the world's largest pork producer, America's Smithfield Foods Inc. [NYSE:SFD], in 2013, facilitating access to low-priced overseas pork.