BEIJING, Oct 26 (Reuters) - Animal feed-to-sausage maker Tangrenshen Group said its profits attributable to shareholders may rise as much as 70 percent this year on higher feed sales and output from pig farming.
The company, based in central China’s Hunan province, said profit could rise to between 281.4 million yuan ($42.42 million)and 341.7 million yuan, up from last year’s 201 million yuan.
Reporting an 18.8 percent jump in its third quarter sales to 3.8 billion yuan, the company which makes more than 90 percent of its income from animal feed, said feed sales during the year are expected to increase by close to 30 percent to 4.8 million tonnes.
It did not give a reason for the rise in sales but added that feed margins have also improved.
It has also improved management of its pig herd, it said in a statement to the Shenzhen stock exchange. That helped it reduce costs even as it rapidly expanded production, offsetting this year’s fall in hog prices.
Prices JCI-HOG-CHNDU are down about 18 percent since last year. Tangrenshen is aiming to produce 550,000 pigs for slaughter this year, up 125 percent from 2016, the statement said.
It recently signed a new agreement to spend 250 million yuan on building 50 farms with annual output of 5,000 pigs in Daming county, southern Hebei province.
Under a new strategy to produce China’s best sausage, its sausage sales will increase by as much as 30 percent, the company forecast, without giving details.
The strategy launched earlier this year involves branding a range of new sausages including hand-made sausages, blood and tofu sausages and frozen sausage with high quality and flavour.
Its meat products division accounted for 4.4 percent of sales in the first half.
Total sales for the first three quarters came to 10.4 billion yuan, up 32 percent on the year.
Tangrenshen shares closed up 0.12 percent at 8.53 yuan. ($1 = 6.6330 Chinese yuan renminbi) (Reporting by Dominique Patton; Editing by Vyas Mohan)