WH Group Ltd

HKEX:288

Q1-2025 Earnings Call

[Lijun Guo, executive]

[Interpreted] 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 Lijun.

Attending today's earnings call include senior management of WH Group and our subsidiaries, Shuanghui Development, Smithfield Foods as well as Morliny Foods. They are Chairman and Executive Director of WH Group, Chairman Wan Long; Vice Chairman of WH Group, Chairman of Shuanghui Development, Wan Hongwei; Executive Director of WH Group and the CEO of Shuanghui Development, Ma Xiangjie; Executive Vice President and CFO of Shuanghui Development, Liu Songtao; CEO and President of Smithfield Foods, Shane; and the CFO of Smithfield Foods, Mark; CEO of Morliny 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.

So firstly, let us -- let me introduce the first quarter performance of the company. In the first quarter of 2025, the total packaged meats 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, USD 6.554 billion, 6% higher than last year. EBITDA, USD 786 million, 16.6% higher than last year. Operating profit, USD 598 million, 19.4% higher than last year. Profit attributable to the owners of the company, USD 364 million, 20.9% higher than last year. Basic earnings per share, USD 0.0284, 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 USD 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 number of slaughter hogs in -- the average hog price in China was RMB 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 USD 1.44 per kilogram, up 14.1% year-over-year. In Europe, the average hog price was EUR 1.41 per kilogram, down 11.8% year-over-year.

The average pork cutout value in the U.S. was USD 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 USD 215 million, 14.3% lower than last year. In packaged meats, operating profit was USD 203 million, 22.5% lower than last year. Pork business operating profit was USD 16 million, 77.8% higher than last year.

In North America, the operating profit increased significantly by 72.8% to USD 330 million. In packaged meats, the profit decreased by 7.6% to USD 266 million. In pork business, the operating profit was USD 93 million, which is a year-over-year improvement by USD 155 million.

In Europe, the our business has -- the operating profit was USD 53 million, 10.2% lower than last year. Packaged meats operating profit, USD 32 million, 6.7% higher than last year. In pork, the operating profit was USD 22 million, 15.4% lower than last year.

In terms of our strategies, WH Group will continue to consolidate its global resource leverage synergies, adhere to the business philosophy of improved mix, adjust price and control costs and a strategy of industrialization, diversification, internalization 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'll adhere to the two adjustments: one control, expand market network, adapt to market changes strengthen competitive edges to drive steady improvements in sales volume and results.

And number three, we'll continue to optimize our business portfolio, steadily improve -- achieve diversification, further strengthen it in global business footprint, 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.

[Unknown Executive]

So IR will host the Q&A session.

[Unknown Executive]

[Foreign Language] [Interpreted] The first set of questions from Luo Chen of BofA.

[Chen Luo, analyst]

[Foreign Language] [Interpreted] The first question relates to the China packaged meat business. So in the first quarter, the packaged meat business has decreased both in terms of volume as well as profit per metric tons. So what's the reason behind that? And what's the outlook in terms of volume for the remainder of the year? And what measures the company are taking to return the packaged meat business to growth? And what's the full year guidance for the profit per ton?

And secondly, considering the low base of 2024 second quarter as the -- due to the destocking of the inventories, what will be -- and the profit per ton was also relatively lower in the second quarter 2024. So what would be the outlook for the second quarter of 2025.

[Unknown Executive]

[Foreign Language] [Interpreted] So 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. And secondly, the customers or the distributors as well as the end customers are destocking. And 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. And we are -- we have -- we do not have a significant exposure to these new channels, even though our growth in these channels are relatively fast, our overall adaptation to the changes in the channel was not good enough.

And in light of these challenges, we are taking eight measures to return the packaged meat business to growth. First is to have a specialized -- is to specialize our sales forces. We will -- 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. And secondly, we will have a matrix style management of the customer base and also expand our customer base. And number three, we will continue to push through the doubling 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. And number six is to step up our investment in the marketing to actively participate in the market competition. Number seven is digitalization. And number eight is to optimize the incentive mechanisms of the sales force.

So we believe these -- all these initiatives are in progress, and we have seen some initial results from these initiatives. And we believe as we -- 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. And in the second half, we believe the growth will offset the declines in the first half. So the full year packaged meat business will maintain growth in both volume and profit.

In terms of profit per ton, in the past, we always -- we usually have a profit per ton of RMB 4,000. Last year, because of low raw material cost, we achieved RMB 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.

[Chen Luo, analyst]

[Foreign Language] [Interpreted] So the follow-up question was that given the -- it looks like the volume of packaged meat business for the full year will increase, whereas the profit per ton will decrease.

[Unknown Executive]

[Foreign Language] [Interpreted] So the overall profit from packaged meat business will be relatively stable, which means the growth of Shuanghui's profit will be primarily driven by other business. And the answer is that this is largely -- this is consistent with the management's view. So 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 a significant improvement in 2025.

[Unknown Executive]

[Foreign Language] [Interpreted] First question from Lillian Lou of Morgan Stanley.

[Lillian Lou, analyst]

[Foreign Language] [Interpreted] Following up to Mr. Ma's comments on the hog production business. So in China, we -- 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 RMB 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?

[Unknown Executive]

[Foreign Language] [Interpreted] So 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 last year by RMB 2 per kilogram compared to last year and the fluctuation in the hog prices will be relatively low. And based on our latest market research and survey, and we continue to have this view.

And in terms of the reasons of the improvement in hog production, it's not really driven by the hog prices. It's driven by our raising cost. Historically, our KPIs in the hog production business was not very good. So we will not be able to make profit even when the hog prices are relatively higher, but we have done a lot of work to improve the KPIs in hog production. So our raising cost is reducing significantly. And so for the full year, we believe we expect between poultry and the hog production business, we will see year-over-year improvement in profit by around RMB 500 million. And in the first quarter, that we have seen around RMB 100 million of improvement.

[Lillian Lou, analyst]

[Foreign Language] [Interpreted] 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. So 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. So are we expecting some recoveries in the second quarter as the efficiencies improves?

[Unknown Executive]

Okay. Thanks, [ Xiaoming ] I'll take the first question. As it relates to hog production, we did have a good first quarter year-over-year, improved over USD 175 million, and 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.

Now 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. And that's normal for U.S. hog production. Typically, from our hog production cycle, you would lose money or breakeven in the first and the fourth quarters and typically make money in the second and third quarters. And so we believe that the industry is back to normalization, and we expect to see that trend continue.

[Unknown Executive]

[Foreign Language]

[Unknown Executive]

Then on the packaged meats question, really driven in the first quarter by higher raw material costs and a later Easter holiday. So raw material costs for packaged meats, so bellies were up about 15% year-over-year in the quarter and pork trimmings were up upwards of 30%. And then the Easter holiday was 3 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. And so we'll see that volume pick up in the second quarter. So 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, but that's one of the core strengths of Smithfield is that we appeal to consumers across that price spectrum. So we have an offering, a high-quality branded or private label offering that meets their budgetary constraints, which is unique versus competition.

[Unknown Executive]

[Foreign Language]

[Unknown Executive]

[Foreign Language] [Interpreted] Question from Veronika of UBS.

[Unknown Analyst]

[Foreign Language] [Interpreted] 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. And in the second quarter of 2025, what is the trend or the outlook? And more from a long-term perspective, given in '24, we already achieved more than USD 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?

[Unknown Executive]

Yes. So you're correct. In the second quarter of 2024, we had about USD 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 those -- 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. And we continue to look to take costs out of our operations across manufacturing, supply chain and in SG&A.

So 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.

[Unknown Executive]

[Foreign Language] [Interpreted] So this relates to China packaged meat business from Valerie of Goldman Sachs.

The first question, also on the China packaged meat side, we understand the company are having more specialized sales forces dedicated to four different kind 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?

[Unknown Executive]

[Foreign Language] [Interpreted] First of all, to clarify that we are not breaking the packaged meat business into four different segments or four different businesses. It's still the same packaged meat business, but we are having more specialized and dedicated sales force dedicated to the four different product categories. So we will not be breaking down the financials for the four specialized categories.

And in terms of the outlook for these four categories, on high temperature, we expect a stable growth. In low-temperature products, we expect faster than -- the growth that is faster than the high-temperature products. For the frozen products, we expect double-digit growth. And for the snack products, we expect a more rapid growth.

[Unknown Executive]

[Foreign Language] [Interpreted] And second question 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.

[Unknown Executive]

[Foreign Language] [Interpreted] For the hog price, we believe the primary drivers of hog price, it is 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.

And to further elaborate on why we believe the tariff impact on the hog price will be limited in the short term because from May all the way until the end of the year, the supply of the hog is pretty much already determined because either this because of the growth cycle of the hogs. So 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. And based on -- the demand is also relatively stable. And based on the -- our research, we believe the supply is slightly larger than the demand.

So 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. And the reason in the longer term, the tariff will impact the hog price is because as tariff impact the feed price, it will impact the profit of the hog producers. So they -- 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.

[Unknown Executive]

[Foreign Language] [Interpreted] And the last question is that we noticed the hog production in the U.S. is shrinking, whereas we are seeing some increase in the capacity in China hog production. So what's the company's long-term strategy in hog production?

[Unknown Executive]

[Foreign Language] [Interpreted] So hog production is a supporting business for us or an ancillary business rather than a core business. So 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. So in hog production, in different markets, there are different dynamics. There are different policies and different market environment. So we will tailor our scale of hog production in each markets based on their local conditions, including the environment -- the market environment as well as the KPIs of the hog production business.

In China, there are some good policies for -- good policy support for hog production. For example, there is some tax exemptions for the hog production business. And also China, it's a huge pork consumption market. So there are a lot of potentials for hog production in China. But in the past, our performance in hog production business was not very good. and it has -- 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 '25.

In the U.S. market, the dynamics is obviously different, and there's no tax exemptions or any tax benefits compared to China. And more importantly, in the past, our KPIs and the performance in hog production in the U.S. was also not very satisfactory. So we are working to shrink the scale or the capacity of our hog production business in the U.S.

So the scale of our hog production business has decreased from 17 million heads per year to around 11 million this year. And if the hog production can deliver good results, we will target a level of around 10 million. And if the performance is not satisfactory, we may even further reduce the scale to 7 million.

In Europe, there are a lot of policy supports for hog production business and the KPIs of our hog production is also very strong. So we believe the current level of vertical integration between hog production and fresh pork is proper in Europe. So we'll keep the current degree of vertical integration in Europe.

So, for WH Group, our long-term strategy is to strengthen and solidify our #1 position in the global pork industry, and we will focus on the pork and focus on the pork business. And 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. And the packaged meat business is the priority among the core businesses. It will continue to drive the growth of the company.

So hog production, in this context, hog production is only a supporting business for us to support our fresh pork and packaged meat business. And we will design the different vertical integration strategies in different markets based on their market environment, the government policies as well as our KPIs. So the vertical integration level may be 20% or 30%, but in any case, will not exceed 50%.

So that's our strategies for hog production of WH Group in the long term.

[Unknown Executive]

[Foreign Language] [Interpreted] 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 into 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. But 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 second half. Currently, the hog price is now in the up cycle. So my concern is whether the tariff war may actually impact the hog price outlook in second half.

And meanwhile, because of tariff wars, there will be also rising reading cost. So if there's going to be any pressure to the hog price, meanwhile, the rising cost will increase. So are we going to see shrinking hog production margins or unit profitability in second half this year? So that's my question on Smithfield in the U.S.

[Unknown Executive]

[Foreign Language] [Interpreted] So the first question on the China hog production business. So the hog production in China improvement will contribute significantly to the improvement in the increase in the profit. So what's the company's current raising cost? And how does that compare to some of the industry-leading raising cost of around [ RMB 12 ] per kilo. So 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.

So 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?

[Unknown Executive]

Yes, I'll take the second question. So as it relates to the tariff impact on hog production, there's a couple of things in there. And you touched on a couple of those. So we are in an up cycle right now. And so 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 a 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. And then 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. So for example, in 2024, China was over USD 1 billion of revenue for the industry. So it's a very important market to the U.S., and that's in the context of what we're sending to China in the form of offal and variety meats for overall hog [ porcus ] balance.

Where we saw the manifestation in hog production of tariffs is on the revenue side. And so 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 USD 12 a head decrease in revenue roughly. Now that has since rebounded. So we've seen that come back, and 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.

[Unknown Executive]

[Foreign Language]

[Unknown Executive]

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 built 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.

So we feel like we have a pretty resilient business model that it prepares us better for this. And 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 cost.

[Unknown Executive]

Yes. And the only thing I would add [indiscernible], we believe that the risk of tariffs is comprehended in our guidance that we provided and affirm today.

[Unknown Executive]

[Foreign Language]

[Unknown Executive]

This is really helpful. I believe my U.S. colleague who covers Smithfield, [ Peter Gabriel ] will have more questions at the Smithfield call later.

[Unknown Executive]

[Foreign Language] [Interpreted] So two questions from CICC. The first one relates to -- both relates to the packaged meat business. First is that we have seen a significant decrease in the packaged meat sales or the ex-factory sales. But what's the actual sell-through in the retail end? So what's the sales situation in the point of sales?

And secondly, given the destocking in the first quarter, so the inventory in the channel should be relatively low. So how will that impact the second quarter sales?

[Unknown Executive]

[Foreign Language] [Interpreted] So first of all, we -- as we explained earlier on the reasons for the decrease in profit in the packaged meat volume in the first quarter, the primary reason is the channel destocking. And obviously, the weak -- the softer market demand as well as our changes in the -- 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%.

And in terms of the current channel inventory, we believe it is already very, very low. It's close to the bottom. So it is unlikely that the distributors will continue to destock. And we believe our packaged meat profit and volume will both bottom out in the second quarter.

[Unknown Executive]

[Foreign Language] [Interpreted] And the follow-up question on the different product categories. So as the management explained earlier, we expect a relatively fast growth in frozen products as well as snack products. But on a relative basis, what's their expected contribution percentage contribution to the total volume? And also for the snack business, what is the expected absolute scale?

[Unknown Executive]

[Foreign Language] [Interpreted] So the frozen and snack products are relatively small. Currently, it's around 5% of total packaged meats volume. Given its faster growth, we expect the contribution will increase to 8% by the end of the year.

[Unknown Executive]

[Foreign Language] [Interpreted] So two questions from Tiffany of Citi. The first one relates to China hog production. So as the management has explained earlier, we expect in the fourth quarter, the raising cost will be close to the industry average level. So 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. And if that's the case, what's the time frame for achieving that level of vertical integration? And 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?

And the second question related 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? And so do we expect the second quarter profit per ton for the pork business to improve versus the first quarter?

[Unknown Executive]

[Foreign Language] [Interpreted] To answer your first question, for Shuanghui, the total capacity of hog production is 1 million heads per year. And 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 Wan has mentioned earlier, our focus and the core business are fresh pork and packaged meat. Hog production these to support fresh pork and packaged meat business. So in the future, even if we need to increase hog production, we will not -- 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.

[Unknown Executive]

And I'll take the second question, [ Xiaoming ]. So thank you, Tiffany. You're correct in the pork business, so if you look at hog production, again, from a seasonality standpoint, the first and fourth quarters are typically breakeven to last quarters with the second and third quarters being where you see profitability. It's the opposite in fresh pork. So you would typically have a stronger first and fourth quarter and a weaker second and third quarter.

However, I would 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. So I'd say in the pork business, the combination of hog production and fresh pork, we're really well positioned. And again, we reaffirmed our guidance this morning as it relates to both hog production and fresh pork. So we feel like we are in a really good position in both of those segments of our business.

[Unknown Executive]

[Foreign Language]

[Unknown Executive]

[Foreign Language] [Interpreted] So thank you all for attending today's earnings call, and we conclude today's session. Thank you all very much.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]