Genus: Trading Update & Pig Market in China

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A version of this was also published on my Twitter account.

Introduction: Genus issued a trading update ahead of its AGM today (November 24). Shares are down 16% at the time of writing (11:30 UK). The main negative was a downturn in the pig market in China. We highlight relevant comments from Genus as well as from Cranswick, who reported their H1 FY22 results yesterday (November 23), and review Genus’ valuation.

Downturn in Chinese Pig Market Hit Genus Profits

In its AGM update, Genus reported that volumes in its porcine division (“PIC”) were down year-on-year in the 4 months of July-October, due to a downturn in China.

The downturn in China was due to pig prices there being both low and volatile, falling from 20 RMB / kg to 10 RMG / kg at one point, and currently sitting at 17 RMB / kg. “At these prices producers have been unprofitable”, and have “postponed stocking orders and reduced their sow herd numbers significantly”.

Overall PIC revenues were still up and, in ABS (Genus’ cattle di…