Why is it said that Muyuan can subvert the pig industry?

After watching “Top of the Wave” and studying Ali’s cloud computing, I really understood the meaning of intelligent farming. Some people think that the so-called intelligent farming is just a concept and a gimmick, but the real intelligent farming is actually an industrial innovation brought about by the fourth industrial revolution. In the third industrial revolution, the Internet + traditional industries = new industries. The Internet has made many traditional industries disappear, and at the same time, many new industries have been born from traditional industries. This is the so-called new things from the matrix of original things in Marx’s principle Brew and make progress by denying yourself. The fourth industrial revolution is an intelligent revolution, and Google has defined the development of AI – artificial intelligence based on big data. Whether it is Alpha or other artificial intelligence, the premise of deep learning is based on existing data. Without data, there is no way to learn, data-feedback-adjustment-data, and then adjust after getting data again and again until it is close to the optimal solution.

The idea of ​​intelligent pig raising in China was not proposed by Muyuan, but by NetEase. That’s right, it was Ding Lei’s NetEase. Around 2010, NetEase adopted intelligent pig raising to reduce labor costs and improve production efficiency. The entire pig farm only needed 6 people to manage 20,000 pigs. However, NetEase took the high-end route, raising black pigs, and directly Sales, they didn’t intend to really enter the smart pig farming industry at the beginning, and it felt like they were just doing it for fun (NetEase’s first pig farm was called Weiyang, and they sold high-end pigs, with an average of 200 yuan per catty).

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The birth of 5G is an epoch-making timeline. After 5G, it will really make the Internet of Things and artificial intelligence possible, and cloud computing will also benefit from the development of 5G. The emergence of 5G will make intelligent pig farming more refined. If I remember correctly 2018 was the time for 5G commercial use. At that time, some people already had the right to use 5G. The official commercial use was in 2019 (mainly because the hype of Eastern Communications was too hot back then. I also made a small profit in it, so remember It’s clearer). In 2018, Ali, Huawei, and JD.com all tried to get a share of intelligent pig raising. In 2019, JD.com’s “AI pig raising” experiment results were released, and the time for pigs to be slaughtered was shortened by 5-8 days . The cost of raising pigs has been reduced by 80 yuan. According to calculations based on this data, the annual cost of the pig raising industry can be reduced by at least 50 billion yuan, and at the same time, breeding enterprises can save more than 30% of labor costs. But the cost of equipment is extremely expensive, and if you copy it to an enterprise, you have to pay JD software fees, so the overall cost will be much higher.

In the same year of 2018, Muyuan also began to prepare for intelligent pig farming. After frenzied expansion, Muyuan began to recruit people with various mechanical and computer majors. At the same time, New Hope and Tianbang also began to try intelligent breeding. Now New Hope There are already intelligent breeding platforms such as “Huiyang Pig” and “Cloud Stocking” platforms, but the cost is still high. Intelligentization is an inevitable trend in the future of the pig farming industry, and it is an irreversible wave. You can deny that Muyuan will grow into a super giant in the future Possibility, but you can’t deny the overall intelligent trend of pig farming. Let me make a more interesting point. If you carefully look at the development strategy of Wen’s shares, you will find that he is also moving towards intelligence in the end. Companies plus farmers How to be intelligent? Wrong, Wen’s next step is to achieve “self-propagation and self-cultivation” first, and then intelligentize. The company’s original words are: implement the “company + modern breeding community + farmer” model, and the breeding community will be based on modernization and scale. The standard construction of modernized, intelligent and automated farms has further improved production efficiency and effectiveness, and the number of cooperative farmers has decreased. What do you mean? It means that in the future, Wen’s will also be self-propagating and self-supporting, and farmers will only come to work, and the company and farmers will be hired relationship, not parental relationship.

The trend of intelligent pig farming is irreversible, and all companies want to get a share of it

I predict that there will be two models in the future – “1” the pig farm develops its own intelligent platform and customizes intelligent equipment; “2” the pig farm uses platform software and equipment from Internet companies

Just as the traditional pig farming industry has been able to accommodate the two farming models of companies plus farmers and self-breeding for decades, future intelligence can also accommodate two models of outsourcing and self-sufficiency. At present, some medium-sized pig farms and small companies such as Ao Nong and other companies have begun to cooperate with Internet companies such as Nongxin Digital, and they all use the software Zhu Xiaozhi.

So let’s get back to the topic, why is it said that Muyuan will subvert the entire pig industry? Isn’t there a lot of players on this new track?

First of all, just as companies and farmers are ultimately no match for self-propagation and self-support, outsourced smart platforms will eventually not be no match for self-developed platforms . If you really understand the whole process of raising pigs, you will know how important the construction of pig houses is to reduce costs. The construction of pig houses of various small and medium-sized companies or pig farmers is very different, no matter the area of ​​the trough used, the head The average area, ventilation facilities, and pig shed design are all different. Even if the miscellaneous data collected by your outsourcing company can really make the pig farm optimal, this optimal is only a vertical optimal, that is, for The client company is the best, not the best for the entire pig industry. What is the ultimate goal of intelligent pig farming? It is to reduce costs . Intelligentization cannot reduce the cost to a low enough position, you will still lose money, and you will still be eliminated, and even the higher cost brought by intelligentization will only speed up your exit. Only independent research and development can achieve the best in the industry. In addition, Wen’s is cooperating with Huawei.

Second, data. The underlying resource of intelligence is data. Without data, you cannot be intelligent. Just like the genetic improvement of breeding pigs requires a large number of different batches of breeding pigs, intelligent breeding also requires a large number of fattening pigs to provide data (mostly fattening, of course. Sow breeding and mating will also be intelligent). Whoever has the most pigs means who has the most resources. At present, Muyuan has 61 million pigs, Wen’s has 18 million pigs, New Hope has 15 million pigs, and Zhengbang has 9 million pigs. The last three of the four major pig companies combined do not have Muyuan’s 2 pigs. /3 has a lot of pigs, how did their intelligence win Muyuan? Unless the luck is extremely good and the joint optimal solution of all variables is reached at once, the probability is probably about the same as winning the lottery.

Finally, there is funds. Funds are also the source of data and the premise of data. Why do you say that? Because how many pigs can be raised ultimately depends on how much cash the company has. If you have more cash, you can raise more pigs. Let’s take a look at the current cash flow of the four major pig companies?

(The short-term debt here and the long-term debt only refer to the money owed to the bank or the issuance of bonds. These money must be returned in time, and the payables can be delayed)

The short-term debt of Wen’s shares seems to be very small, because it is a company plus farmer household model, and the payment of child care fees is included in other accounts payable. The unused credit line of New Hope seems to be very high, but many of them are New Hope The credit line of real estate, the total credit line of New Hope Real Estate is as high as 68 billion, needless to say Zhengbang, this year lost more than 20 billion, and now the Jiangxi provincial government is busy wiping his ass. Now the debt gaps of major leading pig companies are frighteningly high, tens of billions at every turn. In addition, pig companies have been losing money in the second half of last year and the first half of this year, and they will default on their contracts sooner or later.

When is the key moment for pork companies to make up for these debt gaps? If these gaps are not filled, banks will not dare to give these companies more financing. For pig companies, the cash flow brought by profits cannot be used for expansion, and more is used to fill losses. Whoever can fill up the losses and debt gap first will be able to start the next round of high-leverage financing expansion. Judging from the current profitability, I think Muyuan is the most likely to pay off the debt first and start the next round of high-speed financing expansion. Yes, assuming that the cost of pastures can be reduced to 14.5 next year, based on the average price of 16 yuan/kg, it will take less than 5 years to make up for the debt gap with 6,200W head of slaughter. If the slaughter volume reaches 7,500W, it will only take 4 years. If the cost is lowered, it will only take three years. What about other businesses? New Hope’s profitability is still a mystery. The highest profit in 20 years is only 5 billion. I don’t know how long it will take to make up for the debt gap in the future. Wen’s business of the yellow feather chicken is not bad this year, and the debt itself is not too much. The debt period should be shorter than that of Muyuan, but it is more important for Wen’s to upgrade the company and farmers to the stage of self-propagation and self-support, otherwise he will not be able to start intelligentization. As for Zhengbang, needless to say, Zhengbang has already been eliminated.

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This week I have been delving into the books on the pig raising industry crazily. I have a general understanding of the entire pig raising process and all the details and influencing factors of all the costs in it. Among these three books, I recommend “Modern Pig Raising Production Technology” the most, although it sells for more than 100 yuan. , but there are really a lot of dry goods in it! The other two books can be bought or not. There are not many really useful parts. Many of them are statistical mathematical models. Don’t say you can’t understand them. I, a statistics major, can’t understand them. After I finish reading the other two books and digest and absorb them, I will write out the in-depth analysis of Muyuan, and I should see it next week.

#今日话论# @今日话论@雪球creator center $Muyuan shares (SZ002714)$ $Wen’s shares (SZ300498)$ $New hope (SZ000876)$

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