Pig prices hit a six-year low; Muyuan Co. expects 4.5% revenue growth in 2025, net profit falls by 16.5%, slaughtering business turns profitable for the first time.

Pig prices hit a six-year low; Muyuan Co. expects 4.5% revenue growth in 2025, net profit falls by 16.5%, slaughtering business turns profitable for the first time.

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The declining pig price cycle is putting pressure on China's largest pig farming company, but cost control and transformation in the slaughterhouse business have created new profit support.

Muyuan Foods Co., Ltd.'s 2025 annual report shows that the company achieved an operating income of 144.145 billion yuan, a year-on-year increase of 4.49%; net profit attributable to shareholders reached 15.487 billion yuan, a year-on-year decrease of 13.39%. The company attributes the profit decline mainly to the year-on-year drop in pig prices, with the annual average live pig price in 2025 falling to 14.44 yuan/kg, a new low since 2019.

Notably, the company's full-year pig farming total cost dropped to about 12 yuan/kg in 2025, down about 2 yuan/kg from the previous year, partially offsetting the impact of pig price declines.

Meanwhile, revenue from slaughtering and meat business surged by 86.32% year-on-year, achieving annual profitability for the first time in 2025, becoming an important new highlight of the company's performance structure. The company also announced a cash dividend of 4.27 yuan per 10 shares, with a total dividend payout of about 2.435 billion yuan.

Pig price slump drags down profit, cost improvements provide hedge

In 2025, live pig market supply continued to expand. According to data from the National Bureau of Statistics, 719.73 million pigs were slaughtered nationwide, a year-on-year increase of 2.4%, and pork output reached 59.38 million tons, a record high.

Oversupply pushed prices down, with the annual average live pig price decreasing by 9.2% year-on-year, showing a trend of "high in the early period, low in the later period, and fluctuating downward." Calculations show that the industry’s annual average profit per pig sold was 31 yuan, down 183 yuan from 2024.

Facing industry headwinds, Muyuan achieved significant cost reductions through technological innovation and production management optimization. In 2025, total cost was about 12 yuan/kg, a decrease of about 2 yuan/kg year-on-year. Likewise, the prices of feed materials such as corn and soybean meal also declined, providing support—feed costs account for about 55%-65% of total pig farming costs.

Financial results show that net profit attributable to equity shareholders after deducting non-recurring profits and losses was 15.988 billion yuan, down 14.71% year-on-year; basic earnings per share were 2.88 yuan, down 12.73% year-on-year.

Slaughterhouse business achieves full-year profit for the first time, becomes new profit growth pillar

Muyuan's slaughter and meat segment achieved 45.228 billion yuan in operating revenue in 2025, up 86.32% year-on-year, and achieved annual profitability for the first time, with a production capacity utilization rate of 98.8% throughout the year. Profitability was achieved in both the third and fourth quarters.

As of the end of 2025, the company had established more than 70 sales branches for its slaughtering and meat business in over 20 provincial-level administrative regions nationwide, slaughtered 28.663 million pigs, and sold 3.23 million tons of chilled and frozen pork products throughout the year.

The company is also gradually optimizing its product structure by cultivating higher-quality pork varieties through breeding technology, and further segmenting pork products to meet the needs of different consumer groups. The slaughter sector directly obtains consumer demand information, forming linkage with the farming sector, injecting new synergy value into the company's vertically integrated model.

Financial structure continues to optimize, shareholder returns strengthened

On the liabilities side, by the end of 2025 Muyuan's total liabilities fell by 17.1 billion yuan from the beginning of the year, and the asset-liability ratio dropped from 58.68% to 54.15%, a decrease of 4.53 percentage points; total assets were 171.741 billion yuan, down 8.48% year-on-year.

Net cash flow from operating activities was 30.056 billion yuan, down from last year's 37.543 billion yuan. In terms of bond ratings, China Chengxin International maintained the company’s main body and "Muyuan Convertible Bond" ratings at AA+ in May 2025, with a stable outlook.

In terms of shareholder returns, during the reporting period the company carried out two rounds of equity distribution, with total dividends of 8.085 billion yuan, and completed share repurchases totaling about 2 billion yuan. The annual profit distribution plan disclosed in this annual report proposes a cash dividend of 4.27 yuan (tax included) per 10 shares, for a total payout of about 2.435 billion yuan.

The company also formulated a "Market Value Management System" during the same period and completed a listing on the Hong Kong Stock Exchange in February 2026, aimed at attracting more international and long-term investors and optimizing the shareholder structure.

Capacity control tightens, industry supply and demand expected to gradually improve

On the supply side, policies continued to tighten. In 2024 the Ministry of Agriculture and Rural Affairs lowered the national target for the number of breeding sows from 41 million to 39 million. Since 2025 the rhetoric around capacity adjustments has strengthened even further, with multiple deployments to reduce breeding sows, control slaughter weight, and strictly restrict new capacity additions.

Driven by these policies and market self-adjustment, breeding sows declined rapidly in the second half of 2025, falling to 39.61 million by the end of December, down by 1.16 million year-on-year, a decrease of 2.9%, about 101.6% of the normal holding volume.

Industry concentration is also rising. According to monitoring data from the Ministry of Agriculture and Rural Affairs, the hog farming scale rate is expected to reach about 73% in 2025. Against this background, Muyuan is also accelerating its international layout, having established a subsidiary in Vietnam and signed a cooperation agreement with Vietnam's BAF company, exploring overseas expansion through equipment and technology exports.

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