Recently, Zhongxing Fungus Industry announced the 2021 annual report. The report shows that the company achieved operating revenue of 1.556 billion yuan in 2021, an increase of 4.92% year-on-year. The net profit attributable to the shareholders of the listed company was 54.968 million yuan, down 70.91% year on year; Net profit attributable to the shareholders of the listed company after deducting non-recurring profits and losses was 30,832 million yuan, down 79.04% year-on-year.

As for the change of the operating performance of Zhongxing Fungus, on the one hand, the profit rate generally decreased due to the systemic influence of the industry: (1) affected by the trade of bulk goods, the purchasing price of raw materials for the production of plimitella mushroom increased as a whole, and the product cost increased significantly; (2) In the post-epidemic era, the consumption of edible fungi in the downstream market was weak, especially the sales price of mushroom products continued to be low, and the market performance was poor in the traditional sales season. (3) Repeated epidemics, rainstorm disasters and other factors lead to the scrapping of some finished products and products in progress; On the other hand, with the production of the second phase of Wuhe Base and the second phase of Jiangsu base this year, the production and sales volume of the company has risen to the top in the world, and the performance has been gradually released. Moreover, the price fluctuation of the bisporus species throughout the year is small, which has become a stable profit growth point of the company.

Zhongxing said that although net profit fell year on year, it was still in the leading position in the industry. The company firmly believes that in the short term, the overall profit decline or even loss of the industry, just accelerate the clearing speed of backward production capacity, the strength and layout of the forward-looking enterprise is only pain, as the people's health consumer goods on the table, the company believes that with the end of the industry reshuffle, the overall profitability of the industry will be improved.

As of December 31, 2021, the daily production capacity of edible fungi (plentinus edodes and Agaricus bisporus) is 1,105 tons, among which plentinus edodes can produce 745 tons daily production capacity and agaricus bisporus can produce 360 tons daily production capacity. The scale advantage is obvious, especially the agaricus bisporus species, which is known as the "world mushroom", has occupied the leading position in the world and is becoming a new profit growth point of the company. At present, the company has deployed 7 standardized production lines of Agaricus bisporus (6 of which have been put into production), integrating the separate models of European composting plant and mushroom breeding plant into a standardized whole through design and improvement, and catching up with the factory cultivation technology of agaricus bisporus that has been leading China for many years in less than 10 years. In 2021, with the subsidiary Jiangsu Zhongyou Bisporus mushroom house expansion project full production; The second phase of Wuhe Zhongxing's factory production project with an annual output of 40,000 tons of bisporus mushrooms has been put into operation, and the production capacity of Zhongxing's mushroom industry has been accelerated to release, and the products can cover major markets throughout the country.

The annual report also disclosed that during the reporting period, Zhongxing fungus industry achieved sales revenue of 1.556 billion yuan, including 895 million yuan of mushroom products and 661 million yuan of agaricus bisporus products. The sales revenue of agaricus bisporus products increased by 36.73% year-on-year. From the perspective of gross margins, the gross margins of plentinus edodes products and agaricus bisporus products in 2021 were 14.48% and 23.89%, respectively. It can be seen that with the completion of fundraising and self-built projects, the company's agaricus bisporus products have released production capacity faster and their gross margins are relatively high. More importantly, the production and sales volume of the bisporus mushroom of Zhongxing Fungus industry has now ranked first in the industry, and due to relatively higher technical barriers and larger investment, the bisporus industry is still in the development stage, and the competition mainly comes from the factory production of enterprises and greenhouse cultivation, that is, the stage of factory cultivation gradually replacing the greenhouse cultivation of enterprises, so its profit prospects are relatively better. In addition, the price of this variety is relatively stable throughout the year, and the stable profit output will become an important contributor to the company's future performance.

Zhongxing Fungus said that 2021 was an extremely extraordinary year for the entire edible fungus industry, and it was also an unprecedented period in the history of the development of Zhongxing fungus industry. This year, the price of international bulk goods has surged, the purchase price of raw materials for the production of mushroom varieties has been rising, and the consumption has been sluggish, and the sales price of products has continued to be depressed. In the face of the adverse situation of "extrusion at both ends", the company has recognized the situation, accelerated the construction of the double mushroom base with strong profitability, increased market development efforts in the sales end, strengthened the brand construction, and adhering to the "bacteria benefit health, Let the fungus serve the human "mission, strive to provide consumers with green, safe, high-quality edible fungus products. For the 2022 business plan, Zhongxing Fungus said that it will speed up the construction of the agarus bisporus base and actively improve the production capacity of agarus bisporus through mergers and acquisitions. On the basis of consolidating the existing varieties, the planting of other varieties will be actively explored to increase new profit growth points. (Source: Securities Daily)