infinityarcade| Victims of the pig cycle: Keqian Biotech's IPO project was terminated after four years of investment

Pig companies are not the only ones affected by the downward trend of the pig cycle.

After May 20, the pre-science biological announcement, which mainly deals in veterinary biological products, will terminate the original initial investment project "Technical renovation Project of Animal Biological products Workshop" and use the project to raise funds for the "High-level Animal Vaccine industrialization Base Construction Project (Phase I)". The main reason for the change in fund-raising projects is that the downstream pig farming industry continues to be in the doldrums and the company's capacity release slows down.

The construction period only takes one year for the first project, and after 4 years, zero investment is terminated.

At the time of IPO, pre-science biology plans to raise 17Infinityarcade4.7 billion yuan, respectively, used for animal biological products industrialization construction projects, animal biological products workshop technical renovation projects, R & D center construction projects, marketing and technical service network construction projects, information construction projects, scientific research and innovation projects and supplementary liquidity.

On September 22, 2020, pre-science biology officially landed on the science board, with an actual net fund-raising amount of 11.Infinityarcade420 million yuan.

According to the plan, the technical renovation project of the animal biological products workshop will carry out technical transformation and upgrading of the company's original production line according to the latest national GMP standards, with a construction period of one year. After reaching production, the project will produce 344 million milliliters of inactivated vaccine and 223 million doses of live vaccine. After the completion of the project, the average annual income is 475 million yuan.

Graphic sourceInfinityarcadePre-science biological prospectus

However, in the special report on the deposit and use of raised funds from 2020 to 2023, the amount of investment in the above-mentioned projects this year is 0.

Different from the construction cycle disclosed in the prospectus, the special report of pre-science biology from 2021 to 2023 disclosed that the date for the project to reach its intended usable state was May 31, 2024.

Until after the market on May 20, pre-science biology announced that it would change the fund-raising investment project and change the technical renovation project of the first animal biological products workshop into a high-level animal vaccine industrialization base construction project (Phase I).

As for the reasons for the change, pre-science biology said that there are three reasons: the downstream pig breeding industry continues to be in the doldrums, and the release rate of the company's production capacity is slowing down.InfinityarcadeThe company's existing production capacity in line with the new version of "Veterinary Drug GMP Code" meets the existing market demand; the company urgently needs to build a high-level animal vaccine industrialization base construction project to meet the new situation of major animal epidemic prevention and control.

Pre-science biology explained that in recent years, pig prices have continued to fluctuate at a low level, the production capacity of the pig farming industry has continued to decline, the prosperity of the downstream pig farming industry has been depressed, and the immune willingness of farmers has declined, affecting the company's product sales and marketing progress. as a result, the release rate of the company's production capacity slows down.

Net profit has declined for two years in a row

In fact, the downside of the pig cycle affects not only the company's fundraising projects, but also the company's performance.

There is a certain periodicity in the pig industry, it takes 10 to 12 months from mating pregnancy to going out of the column, from the price to expand production, to reach the peak of production capacity and the price to decline, it is about 20-24 months. Upward 20-24 months, downward 20-24 months, so the pig cycle presents a cycle of about 4 years.

The sixth pig cycle in China began in April 2022, however, due to the relative overcapacity of pigs, although pig prices briefly rebounded above the loss line in the middle of the year, the annual average price is still on the low side.

In the 2022 annual report, pre-science biology said that it was mainly affected by the market situation, and its sales in that year were lower than those in the previous year. In 2022, the company's revenue was 1.001 billion yuan, down 9.22% from the same period last year, and the net profit was 410 million yuan, down 28.25% from the same period last year.

In 2023, although the company's revenue grew by 6.27% from a year earlier, net profit continued to decline, down 3.32% from the same period in 2022.

It is worth mentioning that in the first quarter of this year, the company's revenue and net profit fell sharply, and revenue and net profit fell by 26.68% and 35.64% respectively compared with the same period last year. Pre-science biology to explain the reasons mentioned that the downstream supply chain pressure, revenue decline, net profit decreased.