BEIJING (CHINA) – UK-based livestock genetics company Genus has predicted potential short-term obstacles in its bid to help restock the massive pig farming sector in China which faced a surge in disease outbreak over the winter, said its CEO on Thursday.
The firm, which is a supplier to a third of China’s top 50 producers, has seen strong growth and gained market share in that country during a rapid restocking of the largest pig herd in the world that was devastated by African swine fever in 2018 and 2019.
On Thursday, the firm’s shares dipped 6%, their biggest percentage fall since May last year. The company also predicted lower growth and increased currency headwinds in the second half.
According to CEO Stephen Wilson, pig farms in China had witnessed a lot of disease over the winter, making it harder to maintain the health of animals, especially while transporting.
“It’s going to make the next few months potentially have some challenges,” he said, adding customers could review restocking plans as a result of the disease outbreaks although Genus had not seen any “major changes” yet.
“The demand side continues to be very healthy,” he said.
Genus lifted first half revenues by 6% to 285.7 million pounds ($404.6 million) because of the restocking initiatives of China while profit after tax for the period to the end of December was up 26% at 30.3 million pounds.
Since launching in January, China’s hog futures have rallied more than 10%. According to analysts, some 20% of sows in northern China have been affected.
Genus was mulling setting apart a dedicated fleet of lorries to transport the animals to reduce the risk of disease transmission and was exploring ways to develop its own diagnostics to detect early infection, Wilson said.