🐮 Mongolia's meat export | Brand New CU | Tumen Shuvuut's Q3

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Greetings, 

Did you know, tomorrow is the birthday of a boy who once ruled half of the world? That’s why it’s a national holiday in Mongolia.

Today's Inside Mongolia’s menu has…

• Tumen Shuvuut JSC’s egg-cellent Q3 result

• CU’s strategic shift 

• Mongolia’s meat export

Let’s dive with us. 🤘

🥚 Tumen Shuvuut: Cracking the Code to Egg-cellent Success

Tumen Shuvuut (TUM) JSC, a Mongolian egg producer, has been on a roll this year, delivering an egg-cellent third quarter that's sure to make any investor yolk. 

Let’s Scuba dive to Tumen Shuvuut’s earning report

The company's sales revenue soared by a whopping 73% from the last year, reaching ₮43.8 billion. This growth was fueled by a 59% increase in profit, which amounted to a remarkable ₮8.1 billion.

• But, the company's share price has fallen by 7.7% so far this year to ₮323.6. Consequently, the P/B ratio is 2.7. Looking at other indicators, the P/E ratio is 14.2, and the ROE, or return on owners' equity, is 19%.

A Market Poised for Egg-splosion

Mongolians have developed a serious love affair with eggs. Over the past two decades, egg consumption per capita has skyrocketed from a mere 12 eggs per year to a whopping 100. This trend shows no signs of slowing down, meaning that Tumen Poultry's scope is only going to expand.

In anticipation of this egg-cellent demand, the company has already supplied 97.7 million eggs to the market in 2022. And they're not stopping there. With the commissioning of the "Tumen Poultry 2" farm, the company plans to boost its production capacity by 80 million eggs in 2023, leading to an additional ₮32 billion in sales revenue.

Curbing Imports and Keeping Money at Home

Tumen Poultry's expansion efforts are not just good for the company's bottom line, they're also great news for Mongolia's economy. In the first 9 months of this year, egg imports increased by 1.4% from 2022 to 142.9 million, while the value also rose by 3.2% to $10.3 million. However, with Tumen Poultry ramping up production, this import dependency is likely to decrease, leading to significant savings in foreign currency outflows. 

Finally, With the potential for import substitution and future export opportunities, Tumen Shuvuut is poised for continued success and stands as a golden egg in Mongolia's investment basket.

DATA STORY: Brand New CU

Central Express CVS (CUMN) to change its legal name to Premium Nexus JSC and issue ₮61.7 billion additional shares through a private placement. The total investment will consist of ₮26.5 billion transferred by way of property rights and ₮35.1 billion invested by way of debt-to-equity conversion. 

• CU Mongolia will issue ₮35.1 billion ordinary shares to Premium Group LLC by the Debt-to-Equity Conversion Procedure.

• As a way of property rights, the company will own 90% of Chingis Shar Airag LLC, 100% of Chinggis Shar Airag Club LLC, 100% of Central Commerce LLC, 100% of Central Coffee Roasting LLC, and 66% of Stora Central LLC. 

FYI, Chinggis Shar Airag LLC has the capacity to produce and supply 1 million liters of beer per annum, and Central Commerce received the official right to import the Asahi beer from Japan.

✨ Is the Mongolian meat market about to shine?

Mongolia's meat market is worth $1.1 billion, and it's expected to grow by 13.7% each year for the next 5 years. What's going on?

Let's do math

Mongolia exported $127.4 million of meat in the first 10 months of 2023. Interestingly, a significant 82.1% constitutes horse meat, 17.3% is lamb and goat meat, with the remainder being frozen beef.

• Check this out: On average, meat exports have increased by 49.3% every year since 2017. Thanks to Covid-19, we couldn't export much meat in 2019-2021, but we've bounced back in a big way this year, setting a record for exports in the first 10 months.

• How is that happening? It's all about the increase in meat exports to China. China's meat consumption is growing every year, and by 2025, one person is expected to consume 51.5 kg annually. This is because China’s standard of living is improving, and that's why our meat market is thriving.

• Destination? Lamb and goat meat go to Azerbaijan and Iran, horse meat heads to China, Kazakhstan, Kyrgyzstan, and Russia, while beef exclusively goes to Uzbekistan.

• Behind the scenes: Mongolia boasts 71.1 million livestock, but agriculture only made up 13% of the GDP last year. If the Mongolian meat market makes a robust recovery in the future, this figure could see an increase. 

What's next? 

Mongolia has 98 animal processing plants and 80 meat processing plants, but they use less than 10% of their total capacity. Over the last 5 years, around 35.7 thousand tons of meat were processed industrially, making up only 6.2% of the meat produced by agriculture. So, if we enhance the meat quality, there's room for factories and the market to grow. The Mongolian meat market has the potential for even more expansion.

🏃 QUICK STORIES

🔵 Ulaanbaatar city to cooperate with EBRD for the issuance of its first-ever municipal bond. Initially scheduled for last October, the bond’s primary market trading has been postponed indefinitely. FYI, the city planned to accumulate a total of ₮500 billion through 3 tranches distributed over 5 years.

🔵Xac Bank (XAC) to distribute a dividend of ₮14.75 per share. The bank has decided to distribute 15.2% of its net profit as a dividend. As last Friday's exchange rate (₮577.6), the dividend yield is 2.6%. The decision will become effective with the Bank of Mongolia and shareholders' final approvals.

🔵Invescore NBFI (INV)'s interest revenue has reached ₮94.6 billion, 42% YoY growth, as of Q3 2023. As a result, net profit increased by 19% to ₮27.4 billion. As a consequence, ROE is 18.6%, and the EPS is ₮362 as of Q3 2023. FYI, the stock price has increased by 30% this year and reached ₮6,495 as of Nov 10th’s close rate.

🔵Mongolian Stock Exchange (MSE)’s revenue reached ₮7.2 billion as of Q3 2023. Accordingly, net profit for the reporting period reached ₮2.8 billion. Thus, the ROE became 7.3%, and the EPS is ₮8. The company’s stock price closed at ₮110.7 as of Nov 10th, up 10.7% from its IPO price.

⭐ TOP NEWS

• Mining: Xanadu Drilling Hits a New Gold Zone at Mongolian Project. (TheWestAustralian)

• Partnership: China and Mongolia Should Continue Joint Construction Under the BRI. (ChinaDaily)

• Green: Sustainability on the Steppe: Mongolia Battles Waste and Desertification. (NHK)

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Editor: E.Zolbayar
Writer: M.Khulan & Skh.Angirmaa & G.Aminaa

Disclaimer: The information Inside Mongolia provides is for educational and informational purposes only. It is not intended to be or constitute financial advice, trading advice, or any other advice. The decision whether to consider the information we provide is solely our readers' independent decision.