Shen Jue said nothing in the song.
She flipped through the report, reading page by page very slowly.
When the argument between Song Zhongping and Xu Yong came to an end, she raised her head.
"Let me say a few words."
It's quiet in Meeting Room.
Shen Jue put down the report, leaned forward slightly, and glanced at the people present:
"As investors, we have seen many cases involving agriculture, forestry, animal husbandry and fishery.
The farming industry can be said to be complex, but it can also be said to be simple - the last two words spell it out:
cost."
She paused:
"There are two types of costs. One is financing cost and the other is breeding cost."
"Let's talk about financing costs first."
She looked at Xu Yong, "Professor Xu just said that we would invest in others and they would do the work. This is the right idea.
But there is a prerequisite - the companies being invested must themselves be healthy."
She opened a certain page of the report:
"I'll tell you a real case.
Last year we saw a pig company in southwest China. The technical team came from the Academy of Agricultural Sciences, and the breeding pigs were imported from Denmark. Everything looked good.
But when we checked the accounts, we found that the debt ratio was 85% and the annual financing cost was more than 12%."
She shook her head:
"This kind of company looks like it has technology, but it's actually working for banks.
How thin is the profit from raising pigs? When the market was good last year, a pig could earn two to three hundred. What about this year?"
She looked at Chen Xi.
Chen Xi answered:
"According to the latest data, in July 2017, the national average price of Live Pigs was about 13-14 yuan/kg, and breeding profits have shrunk significantly.
Data from the Hainan Province monitoring point shows that the profit per pig in July was only about 78 yuan.
Xichuan's monitoring data also shows that the efficiency of pig farming dropped by more than 80% year-on-year in July, from 690 yuan/head in the same period last year to about 120 yuan/head."
Shen Jue nodded:
"Did you hear that? The profits are so thin. If you are burdened with 12% financing costs, more than half of the money you make will have to be paid back in interest.
If this kind of company encounters the trough of Pig Cycle, they will be the first to die."
She paused and then changed the subject:
"Let's talk about the cost of breeding."
"I saw a foreign case a while ago. United Kingdom was a pig farmer named Robert Battersby, who supplied pork to McDonald's."
She reported some figures, "He raises 1,000 sows, and each sow produces 26 piglets per year.
He did several things:
We have developed a double-layer plastic insulated delivery room, which has a summer temperature that is 10 degrees lower than a traditional iron room;
A closed drinking water system was installed to prevent water source pollution;
Delicate management of feed conversion rate."
She looked at Song Zhongping:
"What were the results? Piglet mortality was reduced by 20% and antibiotic use was reduced by 85%.
Mr. Song, do you know what 85% is?"
Song Zhongping was stunned for a moment.
Shen Jue continued:
"This is not high-tech, but refined.
We will maximize the cost of each link and maximize the output of each pig.
If others can do it, can we do it? If we raise it ourselves, how much will the breeding cost in the first year be? 18? 19?
If it is two yuan higher than the industry average, one pig will earn two hundred yuan less. The annual slaughter of 500,000 pigs is a gap of 100 million."
Song Zhongping opened his mouth but said nothing.
Shen Jue looked at Xu Yong again:
"Let's talk about another overseas example.
Australia There is an agricultural company called AACo that makes beef cattle, not pigs, but the logic is the same.
They began their transformation in 2014, transforming from a traditional livestock company to a high-end brand beef producer.
In three years, the production cost per kilogram of live weight dropped by 27%, and the profit margin increased by 202%."
She paused:
"Why can it be done? Because they increased the proportion of Wagyu in the cattle herd from 15.6% to 18.5%, specializing in high value-added varieties;
Because they built a more efficient processing plant, processing volume increased by 26%.
Earning a little more from each cow adds up to a huge advantage."
She looked at everyone:
"There are no shortcuts in the breeding industry. The technology is good and the team is strong, but if the cost cannot be controlled and the cycle is at a trough, it is better to die or die.
On the other hand, if you can minimize costs, you can survive even if the market is bad; when the market does come, you can take off."
She finally said:
"So my suggestion is - if you want to invest, you must invest in companies with healthy costs.
The cost of breeding should be low, which is hard work;
Financing costs should also be low, which indicates financial health.
Our investment is equivalent to replacing part of their high-interest liabilities with our low-cost funds.
In this way, enterprises can travel lightly and expand rapidly."
Meeting Room was quiet for a few seconds.
Sun Zhengping nodded:
"Director Shen's perspective is very professional. It has data, cases, and is convincing."
Xu Yong also thought thoughtfully:
"So we can't just look at technology, but also at financial structure and cost control capabilities."
Song Zhongping scratched his head:
"Then... that Zhongke Animal Husbandry, does it meet this standard?"
Chen Xi shakes his head:
"At present, it does not seem to be consistent. Their debt ratio is about 65%, and their previous financing costs were indeed high, with an annualized rate of more than 10%."
Shen Jue looked at her:
"Keep looking. Enterprises with good technology, low debt, and reasonable financing costs must exist.
If we can't find a suitable one, we would rather miss this round of Pig Cycle than vote."
She looked at Zhao Chen:
"Cycle opportunities are important, but if you choose the wrong target, you won't be able to make money when the cycle comes."
Zhao Chen looked at her with a hint of admiration in his eyes.
This woman is indeed talented.
He nodded:
"Director Shen is right. Chen Xi, continue to screen targets and use financial health and cost control capabilities as core indicators.
Before Board of Directors next time, at least three candidates must be presented."
He paused:
"That's it for today. The meeting is over."
Directors are leaving one after another.
Shen Jue walked to the door, suddenly stopped and looked back at Zhao Chen.
There was something in that glance.
It seemed like he wanted to ask something, but also like he was waiting for something.
Zhao Chen looked at her:
"Anything else?"
Shen Jue shook his head:
"No."
She opened the door and left.
Only Zhao Chen and Chen Xi, Zhang Qingxue, and Su Wantang are left in the office.
Chen Xi couldn't help but ask:
"Zhao Zong, Shen Jue said what she said today... does she really understand it, or is she just showing off?"
Zhao Chen smiled:
"She really understands."
He paused:
"In the future, I will listen to her opinions more when it comes to raising pigs."
Chen Xi was a little depressed, "According to her standards, it may be difficult to find a suitable target."
"It doesn't matter, look for it slowly." Zhao Chen smiled slightly, "The money is in our hands anyway, don't be afraid."
"I just have to look for it first!"
Chen Xi's depression is justified. After all, he has been busy for so long and finally selected a company. The result...
Outside the window, the sun is setting.
For Zhao Chen, raising pigs has just begun.
And the person named Lu Shen will appear in front of him soon.