Shares of Chinese pig-breeder New Hope expected to keep fattening up even after stock has more than doubled this year
- Shares of New Hope Liuhe have soared 151 per cent this year but are predicted to go up 30 per cent more in next 12 months
- African swine fever has upended pork supply in China and driven up prices
The price of New Hope Liuhe’s stock has already soared 151 per cent this year. But analysts say shareholders’ gains on this Chinese pig breeder stand to get even fatter.
Analysts predict New Hope’s share price will rise to 23.70 yuan over the next 12 months – or a whopping 30 per cent above its current level. That is the consensus of analysts covering it and tracked by Bloomberg.
The Shenzhen-traded stock is also the third best performer on the CSI 300 Index this year, as the spread of African swine fever forced culling of herds and strained supply, driving up prices of pork and chicken, which New Hope also breeds.
New Hope, which is headquartered in the southwest province of Sichuan and is available for trading outside the mainland through the Stock Connect, was riding on the pig play.
The company said it sold 82 per cent more hogs last month than a year earlier and the average sales prices increased 28 per cent to 15.84 yuan per kilogram. The stock slipped 0.4 per cent to 18.27 yuan on Wednesday trading, close to a record high set in June.
“The African swine fever is hard to be eradicated in the short term and pork prices are expected to hit a new high,” said Wu Li, an analyst at Tianfeng Securities. “The company’s rapid expansion of capacity will further strengthen its profitability in the sector.”