Beijing: A poultry company from eastern China said its profit will soar as much as 2,693% thanks to higher prices of white-feathered chickens.
Shandong Yisheng Livestock and Poultry Breeding Co expects to report first-half net income of 900 million to 905 million yuan (US$131mil), compared with just 32 million yuan in the same period last year, according to a filing to the Shenzhen stock exchange. The profit guidance followed “significant price hikes” on white-feathered broilers due to tight supply. Broilers are chickens raised for meat production.
Yisheng’s shares rose as much as 7.5% yesterday before paring the gains and closing little changed. They’ve now advanced 200% this year.
“The way a company’s earnings can go up more than 2,000% is sure to attract attention, but even with a shortage in supply, that kind of growth can only show it had a very low base to begin with,” said Yang Hao, an analyst at China Post Securities Co in Beijing.
“Earnings that fluctuate like this do not belong to companies of high quality.” — Bloomberg