Dear analysts and investors, good evening everyone. Welcome to today's earnings call of WH Group for the first quarter of 2025. This is CEO and President of WH Group, Guo Lij un. Attending today's earnings call includes senior management of WH Group and our subsidiaries, Shuanghui Development, Smithfield Foods, as well as Morlini Foods. They are Chairman and Executive Director of WH Group, Chairman Wan Long; Vice Chairman of WH Group, Chairman of Shuanghui Development, Wang Hongwei; Executive Director of WH Group and CEO of Shuanghui Development, Ma Xiangjie; Executive Vice President and CFO of Shuanghui Development, Liu Songtao; CEO and President of Smithfield Foods, Shane; and CFO of Smithfield Foods, Mark; CEO of Morlini Foods, Luis; CFO of WH Group, Joanna Yan; and Vice President of WH Group, Zhou Xiaoming. We have two parts of today's earnings call.
We will first walk you through the performance of the company in the first quarter, and then we will take questions. Firstly, let me introduce the first quarter performance of the company. In the first quarter of 2025, the total packaged meat sold was 714,000 metric tons, 9.2% decline year over year. Total pork sold was 982,000 metric tons, 4.4% higher than last year. Revenue: $6.554 billion, 6% higher than last year. EBITDA: $786 million, 16.6% higher than last year. Operating profit: $598 million, 19.4% higher than last year. Profit attributable to the owners of the company: $364 million, 20.9% higher than last year. Basic earnings per share: $2.84, 20.9% higher than last year. In the first quarter, we have declines in the volume and a small increase in the revenue and a significant increase in profit.
Looking at our different segments, packaged meats remains our core business. In the first quarter, packaged meats contributed to 49.5% of our total revenue and 83.8% of our operating profit. Pork business contributed 42.9% of our revenue and 21.9% of our operating profit. Other business contributed to 7.6% of revenue and a loss of $34 million. North America business contributed 56.1% of revenue and 55.2% of operating profit. China business contributed to 30.6% of the revenue and 36% of operating profit. European business is 13.3% of revenue and 8.8% of operating profit. In the first quarter of 2025, China's hog supply and demand was relatively balanced.
The supply and demand balance in the U.S. improved significantly year over year, and the hog prices increased from the low levels of the same period last year. In EU, hog prices fell year on year as hog supplies recovered. In the first quarter of 2025, the number of slaughter hogs in China increased by 0.1% year over year to 195 million heads. Hog inventory in China increased by 2.2% year over year to 417 million heads at the end of the period. The average hog price in China remained ¥15.99 per kilogram, up 7.3% year over year. In the U.S., the number of slaughter hogs decreased by 1% year over year to 32.3 million heads. In the U.S., the average hog price was $1.44 per kilogram, up 14.1% year over year.
In Europe, the average hog price was €1.41 per kilogram, down 11.8% year over year. The average pork cutout value in the U.S. was $2.09 per kilogram in the first quarter of 2025, increase of 5.9% year over year. Industry market spread narrowed as the hog price increased more than pork values. In China, in the first quarter, the operating profit was $215 million, 14.3% lower than last year. In packaged meats, operating profit was $203 million, 22.5% lower than last year. Pork business operating profit was $16 million, 77.8% higher than last year. In North America, the operating profit increased significantly by 72.8% to $330 million. In packaged meats, the profit decreased by 7.6% to $266 million.
In pork business, the operating profit was $93 million, which is a year-over-year improvement by $155 million. In Europe, our business operating profit was $53 million, 10.2% lower than last year. Packaged meats, operating profit $32 million, 6.7% higher than last year. In pork, the operating profit was $22 million, 15.4% lower than last year. In terms of our strategies, WH Group will continue to consolidate its global resources, leverage synergies, adhere to the business philosophy of improved mix, adjust price, and control costs, and a strategy of industrialization, diversification, internationalization, and digitalization to enhance our leading position in the global meat industry.
In terms of business priorities, number one, we will continue to improve pork business, grow the volume, and strengthen its market competitiveness to support continuous growth of the company. In packaged meats, we will adhere to the two adjustment one control, expand market network, adapt to market changes, strengthen competitive edges to drive steady improvements in sales volume and results. Number three, we will continue to optimize our business portfolio, steadily achieve diversification, further strengthen its global business footprints, mitigate risks, improve quality, and enhance efficiency and promote sustainable development and value creation. With the joint efforts of the entire team, we will strive to continue the positive business momentum in 2025 and lay a solid foundation for the steady development of the company in the long term. Thank you. IR will host the Q&A session.
下面我们进入问答环节。如有问题，请在会议系统中按举手键示意。首先我们有请美银证券的罗晨提问。罗晨，您请。
可以听见我的声音吗？
可以。
是的，是的，可以听到。好的，谢谢管理层。恭喜出色的业绩。我这边有两个问题，先问一下中国这边的。我们注意到一季度中国的肉制品，不管是从单吨、吨利还是从量上来看，都是有所下降的。能不能请管理层跟大家去介绍一下背后的原因？那么展望未来的话，我们会对于今年的肉制品的量有什么样的看法，以及我们会采取哪些措施来推动肉制品的量能够恢复增长？另外的话，看单吨利润方面，我们会对于全年的展望是什么样子？最后的话，因为考虑到去年二季度肉制品在去库存，所以基数很低，同时吨利也是比较低位。所以我们看二季度的话，对于肉制品的吨利和量有什么样的展望？好，谢谢。
The first set of questions from Luo Chen of BOFA. The first question relates to the China packaged meat business. In the first quarter, the packaged meat business has decreased both in terms of volume as well as profit per metric tons. What's the reason behind that? What's the outlook in terms of volume for the remainder of the year? What measures is the company taking to return the packaged meat business to growth? What's the full-year guidance for the profit per ton? Secondly, considering the low base of 2024 second quarter due to the destocking of the inventories, what will be—and the profit per ton was also relatively lower in the second quarter 2024. What would be the outlook for the second quarter of 2025?
这个问题请双汇发展的总裁马向杰先生回答。请马总。
我来回答这个问题。出现肉制品量的下降原因主要是三个方面。一个方面，我们观察到中国的市场消费不足，整个市场是疲软的。第二点是无论中端客户还是经销商都在降库存。库存减少体现在我们财务报表上它就是减量。第三个是现在渠道细分，新兴渠道的扩张，我们应对不足。在别的投资渠道，像休闲渠道、便利店、会员超市，我做得不够。尽管是增长的，但极少低。就是新兴渠道这些增长，美农、美服全能渠道的下降，这是三个原因。
In terms of the decline in packaged meat business in the first quarter, there are three reasons. First is the general consumer demand in the market remains soft. Secondly, the customers or the distributors as well as the end customers are destocking. Thirdly, there is a shift and change in the market channels. There are a lot of emerging high-growth channels such as the snack stores, snack retailers, convenience stores, and membership-based supermarkets. We do not have a significant exposure to these new channels, even though our growth in these channels is relatively fast. Our overall adaptation to the changes in the channel was not good enough.
根据目前的市场情况和我们企业的现状，为提高下一步的销量，我们采取八个方面的措施。第一是推进肉制品的组织机构的改革，实行专业化运作。就是把我们的综合业务转成四个高温低温主动和临时四个专业的团队，把业务做得更精准。这是第一个。第二个措施是实施客户的立体化网络建设，扩大客户的群体，支撑销量提升。第三个是抓好网点备能，增加销售网络。第四个是强化市场调研，精准开发新产品。第五个，实施渠道的精细化管理，深化渠道运作。这个精细化主要是在商超、便利店、临时、B端、线上、O2O等业务分别成立专业的团队，针对性地去运作市场。第六个是加大市场投入，积极参与市场竞争。第七个是抓好数字化的推广，辅能市场销售。第八个措施是加大业务激励，激发对物的获利。这是八个措施。
In light of these challenges, we are taking eight measures to return the packaged meat business to growth. First is to specialize our sales forces. It is an organizational change of our packaged meat business. We will have specialized forces dedicated to high-temperature products, low-temperature products, frozen products, and snack products. Secondly, we will have a matrix-style management of the customer base and also expand our customer base. Number three, we will continue to push through the double network initiative to expand the number of point of sales. Number four, we will conduct more market surveys and high-quality surveys to help us develop more new products successfully. Number five, to enhance the management of our channels and our point of sales. Number six is to step up our investments in the marketing to actively participate in the market competition. Number seven is digitalization. Number eight is to optimize the incentive mechanisms of the sales force.
这几项措施目前正在陆续推出，效果初步显现。我们预计二季度的销量会止跌回升，下半年增长的幅度会很快抵消一季度的下降，全年有望保持增长。
All these initiatives are in progress, and we have seen some initial results from these initiatives. We believe as the effects of these initiatives continue to impact our performance, we believe the second quarter packaged meat business will stop the decrease and gradually recover. In the second half, we believe the growth will offset the declines in the first half. The full-year packaged meat business will maintain growth in both volume and profit.
第四个，关于吨利，我们过去的吨利一般都在¥4,000左右。去年由于成本下降的原因达到了¥4,000起。今年我们预计会加大市场内的投入。另外，我们推出一些高性价比的产品，吨利会在去年的基础上有所下降，但依然处于历史高位。
In terms of profit per ton, in the past, we usually have a profit per ton of ¥4,000. Last year, because of low raw material cost, we achieved ¥4,700. But as we continue to step up our investment in marketing and also as we launch more value for money products, we believe the profit per ton will be lower, but will continue to remain at a relatively high level.
回答完了。
感谢马总。我再追问一下，就是听您刚才意思的话，我们的量应当会全年会有一点增长，但吨利有所下降。所以是不是可以理解我们的肉制品盈利在今年跟去年比起来是大致稳定的？所以整个双汇发展的业绩增长可能更多的是要靠其他板块来推动。谢谢。
您的问题是对的。今年我们的肉制品的量是稳中有增，或者保持稳定。其他产业是增长的，尤其是两个养殖业。去年我们是大额的亏损，今年养猪也好，养鸡也好，宰鸡也好，都有望实现扭亏增盈。这一块会增加较大幅度的利润。
The follow-up question was that given it looks like the volume of packaged meat business for the full year will increase, whereas the profit per ton will decrease, the overall profit from packaged meat business will be relatively stable, which means the growth of Shanghui's profit will be primarily driven by other business. The answer is that this is largely consistent with the management's view. For the packaged meat business, our profit as well as volume will be stable in 2025, whereas we will see more improvements in other business, including the poultry business as well as the hog production business, where we had significant losses in 2024, but we'll see significant improvement in 2025.
好的。下一位提问的是摩根士丹利的Lilian，楼超，Lilian，请。
喂，我还有个问题。
听得到我的声音吗？
喂，听到，请讲。
喂，好的。我有两个问题。第一个也是关于中国，接着刚才马总对养殖和上游业务的一个说法。就是我记得在年报的时候，对今年中国猪价的一个预判是今年的平均猪价还是会比去年会下探，大概平均下跌¥2左右。那么根据现在整个猪价的，我看一季度也有反弹了。那么对猪价的预测会不会有一个新的判断？那么另外如果是上游会扭亏为盈的话，后面我们这个盈利是来自哪里？如果猪价整个的趋势没有大的一个跟上一次的预判没有大的改变的话，那么一季度我们的整个上游是亏损还是盈利的？这是第一个问题。待会儿我再问第二个。
First question from Lilian of Morgan Stanley. Following up to Mr. Mark's comments on the hog production business, so in China, in the full-year results earnings call, the management has provided outlook for the full-year hog price in China, which is expected to be lower than last year by around ¥2 per kilogram. But based on the actual numbers in the first quarter, the hog price actually rebounded. So given that, the changes in the hog prices, what would be the drivers for the hog production improvement?
我来回答这是两个问题。第一个对猪价的预测，今年以来我们一直坚持两个观点。第一个是全年的猪价比去年会有明显下降，预计降¥2左右。第二个是全年的猪价的趋势属于窄幅震荡的趋势，没有大的动荡机会。这是个判断。目前根据我们市场调研的情况，这个判断不改。而且我们更加坚定了全年的猪价比去年会有¥2的下降。这是猪价的预测。
In terms of hog price outlook, as we discussed in the full-year result announcement, we expect the hog price will be lower, on average will be lower by ¥2 per kilogram compared to last year. The fluctuation in the hog prices will be relatively low. Based on our latest market research and survey, we continue to have this view.
关于第六个问题，您应该不是一个问题，是一个疑问。是猪价下降了，为什么我们养猪会赚钱？其实是这样的，我们过去猪养得比较差，我们的完全成本很高。无论猪价高低，我们过去这两年都是亏钱的。今年是我们的养猪的完全成本比去年大幅度下降。这个盈利主要是来自于我们完全成本的下降。我们完全成本的下降的幅度明显大于猪价的下降的幅度。所以它是盈利的。全年预计养鸡、养猪，包括宰鸡，这两个产业预计盈利在5个亿以上，一季度在1个亿以上。
In terms of the reasons for the improvement in hog production, it's not really driven by the hog prices; it's driven by our raising costs. Historically, our KPIs in the hog production business were not very good. We were not able to make profits even when hog prices are relatively higher. But we have done a lot of work to improve the KPIs in hog production. Our raising cost is reducing significantly. For the full year, we believe we expect between poultry and the hog production business, we will see year-over-year improvement in profits by around ¥500 million. In the first quarter, we have seen around ¥100 million of improvement.
好，谢谢马总。那么第二个问题是关于美国业务。美国的业务今年上游大幅扭亏为盈。那么想了解一下在二季度我们现在看整个的上游的趋势，特别是在猪肉的和养殖，就是和猪的成本之间的价差在缩窄的情况下，我们对整体上游利润的二季度的判断是什么？另外的话，再看肉制品的美国的利润，上半年一季度虽然有点收窄，但是看二季度如果通过效率提升的话，是不是在二季度我们的肉制品的利润会比一季度同比来说有一些改善的趋势呢？谢谢。
The second question for the U.S. business. In the first quarter, the U.S. hog production has improved significantly year-over-year. What is the latest trend in the second quarter, particularly given the market spread is narrowing in the U.S.? What will be the outlook for the second quarter in the U.S. pork business? In the packaged meat business, we noticed the profit has narrowed slightly in the first quarter. Are we expecting some recoveries in the second quarter as the efficiencies improve?
Thanks, Yaming. I'll take the first question. As it relates to hog production, we did have a good first quarter, year-over-year, improved over $175 million. That was a combination of both cost initiatives and decreasing our raising cost through things like genetic transformation, herd health initiatives, nutrition, things like that. But it's also we had a much stronger hog price in the first quarter. CME was up about 14% quarter over quarter.
As we look forward to the second quarter, if you look at the futures curves or the crush, so the difference between the corn and soybean mill on the input side and hog prices on the output side, it does indicate that the industry will have a profitable second quarter. That's normal for U.S. hog production. Typically, from our hog production cycle, you would lose money or break even in the first and the fourth quarters and typically make money in the second and third quarters. So we believe that the industry is back to normalization, and we expect to see that trend continue.
对，关于生猪养殖业，我们第一季度在美国确实有差不多$1.7亿的一个改善。这里面包括主要是一方面是有养殖成本的一个下降，由于我们的之前的基因改造，由于我们的猪群的健康，还有我们的饲料配方的营养的一些改善。另一方面也是因为美国的一季度的生猪价格是有所上涨，芝加哥商品交易所的指数上涨了14%。二季度从目前的期货的情况来看，整个行业生猪养殖业应该还是赚钱的。这个也是和美国整个市场的季节性是一致的。美国的生猪养殖市场的季节性一般就是一季度和四季度会出现亏损，二季度和三季度会盈利。所以今年看这个情况应该也是和回归到一个市场正常的一个周期。
Yaming, on the packaged meats question, really driven in the first quarter by higher raw material cost and a later Easter holiday. Raw material cost for packaged meats, so bellies were up about 15% year-over-year in the quarter, and pork trimmings were up upwards of 30%. The Easter holiday was three weeks later this year as compared to the prior year, which shifted profits into the second quarter. I would say that the Easter season is shaping up largely as we expected. We'll see that volume pick up in the second quarter.
Volume results will be better versus the prior year than they were certainly in the first quarter. We continue to see a challenged consumer in the U.S. in terms of trading down across the value spectrum. That's one of the core strengths of Smithfield, is that we appeal to consumers across that price spectrum. We have an offering, a high-quality branded or private label offering that meets their budgetary constraints, which is unique versus competition.
关于肉制品第一季度，我们有两个挑战，一个是原材料价格的上涨，比去年同期上涨了约15%。第二个是因为今年的复活节比去年晚了三周，所以有一些复活节相关的销量会延展到第二季度。目前整个复活节的销售情况和我们预期也是差不多的，所以我们预计二季度的销量会有所改善。另外我们在美国也看到消费者消费的情绪使得出现了一些消费降级的情况。但是这个对于我们来说，我们其实在各个价格带都有很好的产品，无论是我们高质量的自有品牌的产品，还是我们高质量的贴牌产品，使得我们可以在不同的价格带都能够服务我们消费者的需求。
That's all. This is all my questions. Thank you very much. Thank you, Lilian.
Thank you.
下一个问题来自瑞银的宋婷，Veronica，您请提问。
哎，你好，请问可以听到吗？
可以听到，请讲。
好，我第一个问题是想接着问一下美国肉制品这一块。因为去年二季度我们肉制品的吨位做到了一个历史高点，那里面可能也有一些一次性的，包括政府补助的一个贡献。所以在这个基数下，我们去判断今年二季度肉制品的吨位会朝着什么样的方向去走呢？那这是短期的问题。然后中长期的话，我们觉得肉制品的吨位在去年已经做到超过$900的基础上，还有多大的一个向上的空间？谢谢。
Question from Veronica of UBS. It's also related to the U.S. packaged meat business. In the second quarter of '24, we had achieved a historical record level of profit per ton in packaged meat business in the U.S. We understand some of that is driven by certain one-off items such as the ERC. In the second quarter of 2025, what is the trend or the outlook? From a long-term perspective, given in '24 we already achieved more than $900 per metric ton of profit in packaged meat, what is the upside for further improvement in terms of this metric for packaged meats in the longer term?
Yeah, so you're correct. In the second quarter of 2024, we had about $38 million of ERC credit that was flowing through last year's results, and that will not repeat this year. As I indicated in the prior question, we're facing an environment of higher raw material costs, so our formula pricing will take time to catch up as the raw material prices continue to increase.
Now, they will moderate somewhat in the second quarter relative to the first quarter, but the cost will continue to be up as compared to the prior year. But again, it's about appealing to that consumer across the pricing spectrum with that challenged consumer looking for value. We continue to take costs out of our operations across manufacturing, supply chain, and SG&A. I would say that the long-term algorithm for packaged meats profitability has not changed. We continue to improve our mix, but it's just dealing with higher raw material costs right now and a more cautious consumer.
去年二季度在肉制品有差不多3,800万美元的和新冠相关的一个税务的抵减。所以去年二季度这个吨位也会比较高。今年的话，我们二季度因为我们现在面临的一个情况是肉制品它的原材料的价格有所上涨。当然我们有不少产品它都是按照公式定价，公式定价它的价格的调整也需要一段的一个时间。所以我们和一季度相比，随着公式定价它对产品价格的调整，我们二季度和一季度相比，它会吨位肯定会有一些改善。但另一方面，我们也面临着整体的原材料价格上涨的一个背景。另外就是从长期来看，我们也采取很多的措施来降低我们肉制品的成本，包括生产成本，包括销售管理费用方面的一个成本。还有我们也不断地在改善优化我们的产品结构。所以这些举措都使得我们对长期的肉制品的利润还是有信心的。
非常清楚，谢谢管理层的回答。
Yeah, thank you, Mark.
好的，下一个提问是来自于高盛的周阳，Valery，您请提问。
谢谢这个提问的机会，我是高盛的消费分析师周阳。我这边有两个问题想再请教一下。第一个还是关于咱们的肉制品业务，非常高兴能看到公司现在开始有一个更精细化的专业性的运作。能不能也请管理层帮我们理解一下，我们现在看到四个事业部今年主要聚焦的一些核心的方面，以及我们今年怎么去看这各个部门的KPI。长期去看的话，我们怎么去看这四个品类或四个事业部在我们肉制品这边的一个销售贡献？这是我第一个问题。
中国吗？中国。So this relates to China packaged meat business from Valerie of Goldman Sachs. The first question, on the China packaged meat sites, we understand the company are having more specialized sales forces dedicated to four different kinds of products, such as high temperature, low temperature, frozen, and snack. Can management provide more colors on the focus areas of these four teams, and what are the KPIs? And in the longer term, what is the outlook in terms of contribution across these four categories?
现在我来回答，人民社会问题是这样的。首先，我们肉制品事业部不是分成了四个事业部，还是肉制品事业部只是销售队伍专业化了。卖高温产品的业务就是卖高温产品的，卖低温就是卖低温的，完全专业化了。这样带来的我们的班组，就销售班组，我的客户都专业化了。高温客户就是高温客户，高温班组就是高温班组，速冻班组就是速冻班组，这是专业化。对于财务报表还是给咱们报表，还是来自肉制品事业部，这是一个说明。第二个，下一步的数据，我们公开数据，像工业局不公告，它还是一个合并的数据，我们内部是有跟踪的，但是财务报表上还是有个公开的一个数据。这四类的下一步的规划上讲，高温可能相对稳定，我们规划的是稳中有增，低温的增幅要大于高温的增幅，速冻的增幅要实现，两个数的高于低温的增幅，零食是大幅度增长，大概这四类是这样一个趋势。
First of all, to clarify that we're not breaking the packaged meat business into four different segments or four different businesses, it's still the same packaged meat business, but we're having more specialized and dedicated sales force dedicated to the four different product categories. We will not be breaking down the financials for the four specialized categories. In terms of the outlook for these four categories, on high temperature, we expect stable growth; in low temperature products, we expect faster growth than the high temperature products. For the frozen products, we expect double digit growth, and for the snack products, we expect more rapid growth.
非常清楚。那我第二个问题也想再请教一下猪价这一边，刚才管理层也提到了我们对猪价全年的一个判断，那也想再请教一下我们怎么去考虑关税在其中的影响，尤其是对饲养成本以及中国猪价和美国猪价的一个判断，谢谢。
The second question is related to the hog price in China, so how will the tariff impact the hog price, and how will the tariff impact the raising cost of the hogs, as well as the relationship or the dynamics between the U.S. and China hog price?
这从两个方面来讲，首先猪价的变化，我们更认为影响最大的是供需关系，就是供应量出栏量的大小，这是影响猪价的最根本的原因。成本的影响是第二位的，这是第一个观点。第二个是现在的关税的增加，影响了国内饲料的价格，这对当期的猪价影响是很有限的，不明显，将来可能对明年或者后年的猪价会有影响。
For the hog price, we believe the primary drivers of hog price are the supply and demand balance, and the raising cost is relatively secondary compared to supply and demand. The tariff will increase the raising cost in the longer term; the impact in the short term is relatively limited, so we believe the tariff impact on the raising cost on the feed will take effect next year or the year after.
这个问题稍微复杂，我再进一步解释一下。第一个是为什么关税对现在的猪价不会有明显的影响。现在的猪价从四月五月份之后一直到春节前，出来的生猪现在要么就在猪圈里放着呢，要么就在母猪肚子里，或已经怀上了。所以今年五月份到十月份的国内的猪的供应量基本已经确定，需求量是那样稳定的。现在我们判断猪价的供应应该是略大于它的需求的，因为市场需求不足。所以猪价是下行的，猪价不高。即便是目前的粮食价格、饲料价格上涨，只会影响养猪业的利润，但影响不是很大，它不会影响猪价，这是第一个解释。第二个，为什么现在的关税会对后期的猪价有影响？因为关税的增加，饲料成本的上升会影响养殖业的利润，一部分养殖水平不高的企业会减少母猪的存栏量，会减少明年的出栏量。出栏量减少就有了猪价可能会有所上升，但这目前来看幅度不会很大，这是一点解释。
To further elaborate on why we believe the tariff impact on the hog price will be limited in the short term, from May all the way till the end of the year, the supply of the hog is pretty much already determined because of the growth cycle of the hogs. The hog supply for the remaining time of the year is either in pregnancy in the breeding stock or is already in the barns, which means the supply is pretty much fixed. Based on the demand, it's also relatively stable.
Based on our research, we believe the supply is slightly larger than the demand. The tariff will impact the feed cost, it will impact the profit of the hog producers, but will not necessarily impact the price of the hogs. The reason in the longer term the tariff will impact the hog price is because as tariffs impact the feed price, it will impact the profit of the hog producers. Some of the underperforming hog producers may lose money, and they may decrease the size of their breeding stock herd, which will reduce the supply of the hogs in the relatively longer term.
非常清楚。然后我最后一个问题是想再请教一下，因为咱们美国这边是在降低上游的生猪养殖产能，但是中国这边是有一个产能的爬坡。想理解一下咱们对上游养殖这边布局的不同的考量主要是什么，以及长期来看的话，我们对中国这边的上游养殖大概是一个什么样的想法。谢谢，这是我最后一个问题。
The last question is that we noticed the hog production in the U.S. is shrinking, whereas we're seeing some increase in the capacity in China hog production. So what's the company's long-term strategy in hog production?
我来回答这个问题。养猪业对于我们企业来说应该是一个配套的产业。我们没有把它当成一个猪业或者猪业种的猪业。环球进口的方针，我们就是要向产业化、多元化、国际化、数字化这个大的方向调整，和中国双汇的方向基本上是一致的。养猪业的多少是为了给我们的猪肉产业的配套相结合，实现我们的比较理想的产业化。养猪业和我的政策不一样，管理的水平也不一样。所以我们会根据我们中美欧下属企业的养猪业的政策和管理的水平进行配套我们的养猪业。
Hog production is a supporting business for us and considered business rather than a core business. The purpose of hog production is really to support our fresh pork and packaged meat business, so that we can continue to execute on our strategy of industrialization, diversification, digitalization, and globalization. In hog production, in different markets, there are different dynamics, there are different policies, and different market environments. We will tailor our scale of hog production in each market based on their local conditions, including the market environment, as well as the KPIs of the hog production business.
中国的养猪业政策好，免税，而且中国又是一个猪肉消费的大国。所以在中国的养猪业，我们还是要给我们的屠宰业配套好。但是我们中国的养猪业这么多年来，我们始终没有做好，而且量还比较小。所以这几年来我们对养猪业进行了多次的整顿。刚才马总在回答我们的今年的产业的变化的时候，最近尤其是今年以来，我们对养猪业进行整顿以后有一个明显的变化，而且变化还是很大的。所以我们针对中国养猪业的政策，免税这个政策需要足够量大的条件，我们下一步会适度配套中国的养猪业，那就跟我们的屠宰业、肉品加工业相配套。怎么配，我一会儿讲这个事情。
In China, there are some good policies for policy support for hog production. For example, there are some tax exemptions for the hog production business. China is a huge pork consumption market, so there are a lot of potentials for hog production in China. In the past, our performance in hog production business was not very good, and the scale was also very small. In recent years, we have taken a lot of measures to reform and improve the hog production business, and we have started to see some positive impact this year. As Mr. Ma has mentioned earlier, we see a significant improvement in hog production in the first quarter of 2025.
美国的养猪业政策不好，没有什么免税的政策，跟其他企业一样。但我们的美国的养猪业这么多年来做得也不好，所以我们现在对美国的养猪业正在压减，减少养猪业。
In the U.S. market, the dynamics are obviously different, and there are no tax exemptions or any tax benefits compared to China. More importantly, in the past, our KPIs and the performance in hog production in the U.S. were also not very satisfactory. So we are working to shrink the scale or the capacity of our hog production business in the U.S.
美国的养猪业有前几年的1,700万头，今年要降到1,100万头。如果做好了，我们会降到1,000万头以下，再差的话，我们会降到700万头左右以下。
The scale of our hog production business has decreased from 17 million heads per year to around 11 million this year. If the hog production can deliver good results, we will target a level of around 10 million. If the performance is not satisfactory, we may even further reduce the scale to 7 million.
我们欧洲的养猪业，一个是政策好，再一个欧洲的养猪业管理也好。欧洲的养猪业和屠宰业的配套现在还可以，比较合适。所以欧洲的养猪业我们就保持合理的配套向前发展。
In Europe, there are a lot of policy supports for hog production business, and the KPIs of our hog production are also very strong. We believe the current level of vertical integration between hog production and fresh pork is proper in Europe. We'll keep the current degree of vertical integration in Europe.
所以我们环球国际进口长期的发展战略，我们要始终保持环球国际在全球的猪肉加工业老大的地位。所以我们进口的方针就是要以猪肉为主，把它产业链逐步做完善。但我们根据各个国家的情况，养猪业和屠宰业、肉制品业，我们的发展还是以屠宰业、肉制品业为主。这两个产业说我们的猪业，肉制品说我们猪业的猪业要优先发展，来带动我们上中游的产业的发展。
For WH Group, our long-term strategy is to strengthen and solidify our number one position in the global pork industry, and we will focus on the pork and focus on the pork business. We will tailor our strategy and vertical integration in each market based on different market conditions. But our strategic focus remains unchanged. It's our fresh pork and packaged meat business. The packaged meat business is the priority among the core businesses. It will continue to drive the growth of the company.
所以养猪业在我们企业当中只能说是一个配套的产业。根据中美欧我们下游企业的情况和当地的政策，我们与屠宰业配套的比例有20%、30%，最多不能超过50%。
Hog production in this context, hog production is only a supporting business for us to support our fresh pork and packaged meat business. We will design the different vertical integration strategies in different markets based on their market environment, the government policies, as well as our KPIs. The vertical integration level may be 20% or 30%, but in any case, will not exceed 50%.
这就是我们今后发展养猪业的基本的一个想法。我回答就完了。
Those are our strategies for hog production of WH Group in the long term.
谢谢董事长，非常清楚，亮眼，恭喜公司有个非常亮眼的一季度业绩，谢谢。好的，谢谢。下一位提问的还是来自美银的罗晨，罗晨请提问。
好的，谢谢。因为刚才问题没问完被禁言了，所以我这次就把两个问题一起问了。第一个关于中国，就是因为今年的整个的中国利润增长，很大程度上是靠上游养殖业务的复苏。我想请教一下，我们目前的生猪养殖，每公斤的养殖成本是多少？因为现在行业的有一些龙头企业已经可以做到¥12多。我想了解一下我们这块现在达到什么样水平。然后第二个就是关于美国业务。
The second question is about the U.S. business. It seems that the recovery of the hog production business should be the key earnings driver to the U.S. business in 2025. I'd like to get more color on the impact from the tariff wars, as we all know that the U.S. pork business has got some pretty big exposure to the export side. Because of all the noises from tariff wars, will that impact the export business of U.S. pork, which may in turn impact the hog price in the second half?
Currently, the hog price is now in the upcycle. My concern is whether the tariff war may actually impact the hog price outlook in the second half. Meanwhile, because of tariff wars, there will be also rising costs. If there's going to be any pressure to the hog price, meanwhile, the rising costs will increase. Are we going to see shrinking hog production margins or unit profitability in the second half this year? That's my question on Smithfield in the U.S. Thank you.
我回答第一个问题。中国的养猪业目前的规模很小，去年20万头，今年会大幅增长，就要出栏200万到600万头。今年我们现在的养殖成本比较明显下降。所以我们现在目前当然还高于行业的平均水平，高于目前的猪价。所以目前我们养猪业是亏损的，但是同比是大幅减亏的。这是一个观点。第二个是预计今年猪价成本是越来越低，四季度能达到行业的平均水平。
The first question on the China hog production business. The hog production in China improvement will contribute significantly to the improvement in the increase in the profits. What's the company's current raising cost? And how does that compare to some of the industry leading raising cost of around $12 million per kilo? For Shuanghui, our hog production is relatively small. It's 200,000 heads last year, and we expect around 600,000 in '25.
Our raising cost has reduced significantly this year, but it's still higher than the industry average level, and it's also higher than the hog price. Our hog production business is still losing money, but the loss has narrowed very significantly. And we believe our raising cost will continue to decrease throughout the year and will be close to the industry average in the fourth quarter. Shane and Mark, do you want to take the second question on tariff?
Yeah, I'll take the second question. As it relates to the tariff impact on hog production, there's a couple of things in there. You touched on a couple of those. We are in an upcycle right now. When we look at the hog prices across the remainder of this year, just on the futures market, it does indicate relatively strong profitability in hog production in Q2 and Q3, and then that typical return to seasonality in Q4. As it relates specifically to tariffs, our hog production operations, the corn and soybean mill that we source to feed our livestock is sourced here from the U.S.
That output is sold into our fresh pork plants here into the U.S. as well. Where we do think we could see an impact on hog prices is as it relates to the impact on meat. For example, in 2024, China was over $1 billion of revenue for the industry. It's a very important market to the U.S. That's in the context of what we're sending to China in the form of offal and variety meats for overall hog purchase balance. Where we saw the manifestation in hog production of tariffs is on the revenue side.
In the 10 days following the announcements of tariffs, we did see a lot of volatility on the revenue side in hog production, where producers across the industry saw about a $12 a head decrease in revenue, roughly. Now that has since rebounded. We've seen that come back. That's really because we still have a strong meat market here in the U.S. thinking about the cutout. Xiaoming, I'll let you translate, and then I'll continue.
第二个问题是关于关税对于美国的猪价的一个和美国生猪养殖业的一个影响。因为美国的话有比较多的猪肉是要出口。那么关税的话会不会通过影响猪价、肉价而进一步的影响到猪价，然后会影响到我们生猪养殖业的利润？那么大神的回复，首先是我们二季度、三季度历史上从季节性来看，也确实是生猪养殖业的一个旺季，一个比较好的一个季节。那么第四季度会是一个生猪养殖业的一个淡季。那么这个也是对短期内的一个生猪养殖业的一个展望的一个情况。那么关于关税，首先我们生猪养殖业的原材料玉米和豆粕都是从美国采购的。然后它的产品猪肉也都是出售给我们的，内转给我们的屠宰工厂也都是在美国的。所以它关税对于这两方面并没有一个直接的影响。那么影响到它的更多的是一个肉价而带动的猪价的一个影响。因为2024年整个美国猪肉行业有差不多$10亿美元对中国的出口，主要是副产品。那么在关税宣布公告之后的消息之后的10天左右，其实美国的猪价也是有比较大的一个下降。所以导致了每头$12美元的一个下降。但是自从那个之后，其实猪价也都反弹回来。主要原因是因为在美国对肉的需求还是比较的强劲。
As it relates specifically to Smithfield, only about 3% of our total revenue comes from exports to China. So we have a very diversified business where we build in a lot of levers in our fresh pork business that we can change between what we use in our packaged meats operation. Then as we go down to our domestic business, our adjacent businesses, so you can think of our pharmaceutical business and other export markets. We feel like we have a pretty resilient business model that prepares us better for this. Again, as it relates specifically to the question around hog production outside of the revenue side being impacted by meat prices, I don't think we will see a significant impact on raising costs.
Yeah, the only thing I would add, Xiaoming, is we believe that the risk of tariffs is comprehended in our guidance that we provided and affirmed today.
对于Smithfield来说，其实我们整个的业务还是比较有韧性的。我们对中国的出口占我们的总的销售额只有3%左右。因为我们有很多的渠道可以消化我们的肉的产品，包括我们的肉制品，包括我们国内的市场，包括一些附属的渠道，包括医药渠道，还有一些其他的出口市场。所以我们有很多的办法可以调整这些对中国的一个出口的产品。所以我们整个的业务还是非常的有韧性。那么对于生猪养殖业来说，关税的影响可能会影响它的一个收入，影响一定程度上会影响到猪价，但是对于成本应该不会有影响，因为它都是美国本土采购的。那么另外我们其实在今天美国Smithfield给出的全年的指引当中，也已经考虑到了关税相关的影响。
Thanks a lot. This is really helpful. I believe my U.S. colleague who covers Smithfield, Peter Gabel, will have more questions at the Smithfield call later. And 同时也非常感谢马总刚才对我的中国的生猪养殖问题的回答。谢谢。
谢谢。下一位提问的是来自中金的吴雨欣。吴雨欣，您请提问。
好的，谢谢。感谢提问的机会。关一聪，晚上好。我是中金食品组的雨欣。首先非常恭喜公司取得出色的成绩。我这边的两个问题主要是关于国内的业务。首先想问一下，就是国内的肉制品的业务，一季度因为组织的调整，我们出货的口径压力比较大。但是从终端的表现，包括就是动销的口径上，不知道我们是否有一些数据。然后另外就是整体一季度的肉制品的库存应该是在一个比较低的位置。我们现在如何去预期二季度的销量上的一个回升？谢谢马总。
Two questions from CICC. The first one relates to both relates to the packaged meat business. First is that we have seen significant decrease in the packaged meat sales or the ex-factory sales. But what's the actual sale through in the retail end? What's the sales situation in the point of sales? And secondly, given the destocking in the first quarter, the inventory in the channel should be relatively low. How will that impact the second quarter sales?
这是两个问题。第一个关于肉制品中端的情况。我刚才讲到一季度我们同比降幅比较大，主要是三个原因，其中有一个我们影响最大的是库存的下降。就中端库存和进口商的库存的影响，当然也有我们渠道运作不利的影响，还有市场消费信心不足的影响。我们也做了个调查，按中端口径，根据我们自己的数字化系统展现出来的数据，大概同比下降在5%左右，应该不到5%。这是一个中端口径。第二个，目前的库存我们认为降到了低点。如果再低的话，可能就会影响供应。所以目前进口商再降库存的空间已经基本没有了。二季度我们预计会触底反弹，肉制品的量和力都会出现止跌回升的一个状况。谢谢。
First of all, as we explained earlier on the reasons for the decrease in packaged meat volume in the first quarter, the primary reason is the channel destocking. Obviously, the soft market demands as well as our changes in our slow adaptation to the market channel shift also played a role. But we believe the channel destocking is the most important driver of the decrease. Based on our survey and research, we believe at the retail end, the sales decline was around 5%. In terms of the current channel inventory, we believe it is already very, very low. It's close to the bottom. It is unlikely that the distributors will continue to destock. We believe our packaged meat profit and volume will both bottom out in the second quarter.
谢谢关一聪的解答。还有一个补充的小问题，就是关于国内肉制品的划分来看的话，因为速冻和零食这两块增长目标定得比较高，所以想问一下，就是这两个板块大概占到肉制品整体的体量会占到多少的一个比例？然后另外就是今年的零食的渠道的话，从体量级上来看，我们预估能够达到多少亿的体量级别？谢谢。
The follow-up question on the different product categories. As the management explained earlier, we expect relatively fast growth in frozen products as well as snack products. But on a relative basis, what's their expected percentage contribution to the total volume? Also for the snack business, what is the expected absolute scale?
是这样个概念。目前我们的速冻和零食占比很低，两个加在一起也就是5%左右。根据目前我们的增长情况以及全年的预计，到年底能占比能增加到8%左右。
The frozen and snack products are relatively small. Currently, it's around 5% of total packaged meat volume. Given its faster growth, we expect the contribution will increase to 8% by the end of the year.
好的，谢谢关一聪的详细解答。住院公司持续提升业绩长红。谢谢。
谢谢。下一位，因为时间关系，我们现在接受最后一条提问。那么下一位提问的是来自花旗的Tiffany冯丹丹，Tiffany，您请提问。
好的，谢谢关一聪。谢谢，感谢这个提问的机会。我也是两条问题。第一个是关于中国的养殖业务这边想再跟进一下。就是说我们预期四季度就会达到一个行业平均的成本了。那是不是就在这个理想的状态下，我们从明年开始就要继续去扩大养猪的规模来配套，就是达到刚刚董事长讲的20%到30%的这样一个配套比例？那么在这种情况下大概多长的时间去做到这样的一个规模？然后我们对更中长期，比如说明年后年对养殖板块的盈利的规模是怎么看的？就是今年主要是靠管理效率，改善成本，下降完了之后是不是就会随着行业的价格的周期来波动？这是第一个关于中国的养殖。第二个是美国业务这边，就是刚刚管理层介绍了二三季度是旺季，就是盈利水平会比一季度要好。那么如果是看我们猪肉这个板块，就包括了上游的养殖和屠宰，就合在一起看的话，是不是也意味着二季度的盈利的水平会高于一季度？因为一季度其实已经是挺不错的一个盈利水平了。想看看二三季度是不是会更高？谢谢。
Two questions from Tiffany of CT. The first one relates to China hog production. As the management has explained earlier, we expect in the fourth quarter, the raising cost will be close to the industry average level. If that's the case, does that mean the company will be scaling up the hog production of China to achieve a vertical integration of around 20% to 30%, as Chairman has alluded to earlier? If that's the case, what's the timeframe for achieving that level of vertical integration?
Also, given the improvement of the KPIs and the raising cost, in the mid to longer term, will the profit in China hog production be primarily driven by the market price? The second question relates to the U.S. pork business, which includes fresh pork and hog production. As Shane and Mark explained earlier, the second quarter and the third quarter typically has a better performance for hog production. Does that also apply to the pork business? Do we expect the second quarter profit per ton for the pork business to improve versus the first quarter?
我来回答第一个问题。目前中国双汇养猪的产能是100万头，今年预计出栏60万头。到年底，养殖水平或者完全成本达到行业平均水平之后，明年我们首先考虑的是适度增加规模，让我们的产能发挥得更好。这是第一个观点。第二个，刚才关一聪讲到了，我们是以屠宰和肉制品为主的，养猪是配套，它是服务于屠宰和肉制品的。所以我不一定是非要自己掏钱去建猪舍。我可以和其他的在养的企业搞战略合作，搞战略供应合作，或者适当参股。所以暂时没有扩大产能投资的项目。
To answer your first question, for 双汇's total capacity of hog production is 1 million heads per year. For 2025, we expect the production volume to be 600,000. If we are able to achieve industry average raising cost by the fourth quarter of '25, our priority will be to increase the utilization of our capacity rather than to increase the capacity. As Chairman Wang has mentioned earlier, our focus and core business are fresh pork and packaged meat.
Hog production is to support fresh pork and packaged meat business. In the future, even if we need to increase hog production, we do not necessarily need to invest in new capacities. We can partner with other suppliers or even invest in some minority stake in other suppliers to secure supplies for the fresh pork and packaged meat business. At this point, we do not have plans to increase the capacity of our hog production in China.
I'll take a second question, Zhao Ming. Thank you, Tiffany. You're correct, in the pork business, if you look at hog production, again, from a seasonality standpoint, the first and fourth quarters are typically break-even to lost quarters, with the second and third quarters being where you see profitability. It's the opposite in fresh pork. You would typically have a stronger first and fourth quarter and a weaker second and third quarter.
However, I will tell you, in our fresh pork operations, we've done a number of things to offset some of that seasonality from improving our efficiencies and really focused on reducing our cost, as well as looking for the next best sale and changing our approach to how we approach the markets. In the pork business, the combination of hog production and fresh pork, we're really well positioned. Again, we reaffirmed our guidance this morning as it relates to both hog production and fresh pork. We feel like we are in a really good position in both of those segments of our business.