Chinese listed firms go Hog Wild

Chinese listed firms go Hog Wild

Chinese A-share listed firms get into the hog business

The global slowdown has many Chinese A-share listed firms looking for new sources of revenue outside of their core businesses and it seems that the rise in pork prices and issues with food safety in China have several of them looking at opportunities in the hog business.

It’s estimated that there are nearly thirty companies in the A-share market (Domestically listed in China) who are already involved in the hog breeding business; many of these companies originally had nothing to do with the agricultural industry but have found it to be an attractive business.

David Nealis

Some concerns for their success in this new industry are that with draughts in China and in the Midwest of the USA this year, livestock feed costs have increased dramatically and to avoid social arrest the central government may put price controls in place which could reduce profits in this industry.

What many analyst are watching is how do these firms manage their new ventures on a day to day basis after they have injected their capital into them, in addition to the other hog industry risks like a disease outbreak.

Critics are complaining that these companies are not focused enough on their core businesses, but for many of them who are tightly connected to the global economy finding new growth industries may be vital to their survival.

China, the world’s 2nd largest economy, continues to be the most important market for companies looking for growth and Chinese companies continue to globalize by investing and selling their products in new markets; what is your company’s strategy for engaging China?

Futures and Options Risk Disclosure
Trading futures and options involves the risk of loss. You should consider carefully whether futures or options are appropriate to your financial situation. You must review the customer account agreement and risk disclosure prior to establishing an account. Only risk capital should be used when trading futures or options. Investors could lose more than their initial investment. Past results are not necessarily indicative of futures results. The risk of loss in trading futures or options can be substantial, carefully consider the inherent risks of such an investment in light of your financial condition.