Haid Group: Sets 2030 Global Sales Target of 51.5 Million Tonnes; Overseas Markets to Become Core Growth Engine

Overview

Based on information obtained from UBS's attendance at Guangdong Haid Group's Annual General Meeting, this report provides a detailed interpretation of the company's newly released '2030 Strategy' and its 2026 operational outlook. The core conclusion is that Haid Group is accelerating its transformation from a domestic leader to a global giant, explicitly positioning overseas markets as the core growth engine for the next decade. Despite weak domestic consumption, the company is poised for steady growth driven by industry consolidation and its absolute dominance in high-end aquafeed. UBS maintains a 'Buy' rating with a target price of RMB 68.70, believing that strong cash flow, a clear globalization roadmap, and potential IPO plans for overseas subsidiaries will continue to unlock long-term value.

Core views

2030 Strategic Vision and Profit Structure Reshaping Management outlined ambitious 2030 targets at the AGM: global feed sales volume reaching 51.5 million tonnes, comprising over 40 million tonnes domestically and approximately 9 million tonnes overseas. The net profit target is set at RMB 10 billion, with domestic feed contributing ~RMB 4 billion and overseas feed contributing ~RMB 3 billion. This structural shift highlights the significantly increased weight of overseas business. The report notes that aquafeed is positioned as the highest-value segment in both domestic and overseas markets, serving as the core source of company profits. 2026 Short-Term Outlook: Stable Domestic Demand, Accelerating External Demand For 2026, the company guided for total feed sales volume growth of approximately 3.1 million tonnes, a 10% YoY increase. Among this, overseas sales volume is expected to rise by ~80k tonnes, a substantial 23% YoY growth. This divergence in growth rates indicates that while domestic business remains constrained by a weak macro consumption recovery, it can still maintain moderate growth; meanwhile, contributions from international business are accelerating, aligning with its long-term globalization strategy. Domestic Competitive Landscape and Core Barriers In the domestic market, management emphasized that industry consolidation is ongoing, with the top 20 players now holding over 50% market share. Haid Group's core competitiveness lies in its focus on the main feed business and its integrated service capabilities across 'Seedlings-Feed-Animal Health'. Particularly in aquafeed, the company reiterated its leadership position and raised its 2030 aquafeed sales target to 10 million tonnes, aiming to capture 50% market share. Simultaneously, through pricing discipline and operational efficiency improvements, the company can support profitability enhancement and market share gains in poultry and swine feed segments. Overseas Expansion Path and Market Potential Overseas markets have been established as a key growth pillar for the next decade. The company currently has operations in Southeast Asia, Africa, and Latin America, with long-term plans to enter European and US markets. Strategically, the company prioritizes aquafeed development in all markets, followed by poultry and swine feed. The goal is to become the No. 1 player in aquafeed (~30% share) and a top-three player in total feed sales in each country. By 2030, overseas feed sales guidance is 9 million tonnes, while the long-term potential scale could reach 30-40 million tonnes, including ~10 million tonnes of aquafeed, indicating significant upside ceiling. Financial Health and Shareholder Return Policy The company maintains a debt-to-asset ratio of ~40%, with annual net operating cash flow ranging between RMB 7-10 billion in recent years, reflecting a solid financial foundation. Looking ahead, beyond regular dividends, the potential IPO of an overseas subsidiary (Haid International) could serve as a key catalyst for unlocking value. Management has set a long-term shareholder return target exceeding 70% over time (65% in 2025), demonstrating a high commitment to shareholder interests.

Analysis framework

UBS employed a 'Strategy Breakdown + SOTP Cross-Validation' analytical framework in this report. First, it extracted the company's long-term strategic anchors (2030 sales and profit targets) from AGM minutes, decomposing overall growth into two drivers—'Stable Domestic Base' and 'High-Growth Overseas Engine'—to assess feasibility and market space separately. Second, regarding valuation, it primarily used a DCF (Discounted Cash Flow) model to capture the intrinsic value of long-term free cash flows, particularly considering incremental future cash flows from overseas expansion; simultaneously, it used SOTP (Sum-of-the-Parts) valuation for cross-validation to ensure fair reflection of value across different business segments (e.g., high-margin aquafeed vs. more cyclical livestock feed). This approach helps investors understand why institutions remain bullish on long-term valuation re-rating despite short-term domestic consumption weakness.

Methodology notes

• Valuation MethodDCF Model

  DCF Valuation

  The report uses a DCF model to calculate the target price. This method evaluates enterprise intrinsic value by discounting expected future free cash flows to present value, particularly suitable for growth-oriented manufacturing companies like Haid with clear long-term capex plans and cash flow forecasts.

• Valuation MethodSOTP Valuation

  SOTP Valuation

  The report uses SOTP as a cross-validation tool. Given Haid's diverse business segments with varying growth attributes and margin levels (domestic/overseas, aqua/livestock), SOTP valuation more accurately reflects the independent value of each part, avoiding biases inherent in single-multiple valuations.

• Industry Analysis FrameworkSupply-demand framework

  Industry Concentration & Supply-Demand Dynamics

  The report analyzes supply-side consolidation trends in the domestic feed industry (top 20 share >50%), noting that amid weak demand-side consumption, increased supply-side concentration favors leading enterprises achieving counter-cyclical growth by squeezing out smaller players.

• Competition & Strategy FrameworkMoat / competitive advantage

  Integrated Synergy Effects

  The report emphasizes Haid's integrated 'Seedlings-Feed-Animal Health' capability as its core moat. This full-chain service model not only increases customer stickiness but also enhances product value-added through technology and service premiums, particularly evident in the technically demanding aquafeed sector.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Guangdong Haid Group (002311.SZ)

  Direct Beneficiary

  Strengths

  Global leader in aquafeed with integrated 'Seedlings-Feed-Animal Health' barriers; early overseas layout with high growth potential; abundant cash flow and stable dividends.

  Weaknesses

  Domestic livestock cycle volatility may impact short-term feed demand; raw material price fluctuations affect per-tonne net profit.

  Comparison

  Compared to purely domestic feed companies, Haid possesses stronger counter-cyclical resilience and a second growth curve overseas; compared to other companies expanding abroad, Haid has higher technological and brand barriers in the aquafeed sector.

  Risks

  Overseas geopolitical risks; FX volatility; overseas expansion falling short of expectations.

Key data

• 2030 Global Feed Sales Target51.5 Million TonnesDomestic >40m tonnes; Overseas ~9m tonnes
• 2030 Net Profit TargetRMB 10 BillionDomestic feed contrib. ~RMB 4bn; Overseas feed contrib. ~RMB 3bn
• 2026 Total Sales Growth Guidance+10% YoYExpected increase of ~3.1m tonnes
• 2026 Overseas Sales Growth Guidance+23% YoYExpected increase of ~80k tonnes
• 2030 Aquafeed Sales Target10 Million TonnesTargeting 50% market share
• Debt-to-Asset Ratio~40%Solid financial structure
• Annual Net Operating Cash FlowRMB 7-10 BillionRecent years average
• Long-Term Shareholder Return Target>70%65% in 2025

Impact & implications

For investors, Haid Group's 2030 Strategy signifies a shift in investment logic from a pure 'domestic cyclical growth stock' to a 'global allocation asset'. High growth expectations for overseas business (+23% in 2026 vs. +10% total) will be key to supporting valuation re-rating. A successful IPO of the overseas subsidiary would not only bring capital appreciation to the parent company but also accelerate overseas capacity expansion via an independent financing platform. Furthermore, the commitment to >70% long-term shareholder returns, combined with stable operating cash flow, endows the stock with bond-like defensive attributes alongside growth stock upside elasticity, making it suitable for long-term capital allocation.

Risks

• Extreme weather or epidemics causing declines in downstream livestock or aquaculture stocks, leading to shrinking feed demand.
• Intensified competition in the feed manufacturing industry resulting in lower-than-expected feed sales growth.
• Extreme weather and international tensions potentially driving up feed grain prices, leading to lower-than-expected net profit per tonne of feed.
• Slow destocking of sow capacity potentially prolonging the downcycle in the hog cycle, thereby reducing Haid's profitability.

What to watch

• Progress on the IPO of overseas subsidiary (Haid International) and its impact on valuation re-rating.
• Whether 2026 overseas sales achieve the targeted 23% high growth as scheduled, validating execution of the globalization strategy.
• Whether domestic aquafeed market share steadily approaches the 50% target.
• Whether the shareholder return rate gradually increases to >70% as guided.