--- title: "MUYUAN Forecasts H1 Loss of RMB 5.7–6.7 Billion; Cost Reduction and Slaughter Business Provide Buffer" type: "News" locale: "en" url: "https://longbridge.com/en/news/292371685.md" description: "Continuous cost reduction" datetime: "2026-07-11T05:02:45.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/292371685.md) - [en](https://longbridge.com/en/news/292371685.md) - [zh-HK](https://longbridge.com/zh-HK/news/292371685.md) --- # MUYUAN Forecasts H1 Loss of RMB 5.7–6.7 Billion; Cost Reduction and Slaughter Business Provide Buffer With hog prices remaining at low levels, MUYUAN, the leading pig farming company, recorded a phased loss in the first half of the year. On July 11, MUYUAN released its profit forecast for the first half of 2026. The company expects the net profit attributable to shareholders of the listed company to be a loss of RMB 5.7 billion to RMB 6.7 billion, compared to a profit of RMB 10.53 billion in the same period last year. From an operational perspective, hog prices remain the core variable affecting MUYUAN's performance. Since the beginning of this year, the average selling price of MUYUAN's commercial pigs has remained at a low level, hovering around RMB 10/kg for most of the period from March to June. However, against the backdrop of industry-wide pressure, MUYUAN's cost improvements continue. The company disclosed that as of May this year, the fully loaded cost of pig farming had dropped to RMB 11.6/kg, moving closer to the annual target of reducing it to below RMB 11.5/kg. The costs of its top-performing farm lines have been stably controlled below RMB 11/kg, with the best-performing lines recording costs below RMB 10.5/kg. Gao Tong, President of MUYUAN, stated that the company set a target in 2022 to reduce costs by RMB 600 per pig. By the end of May this year, RMB 323 of this reduction had been achieved, leaving room for further cost improvement of RMB 277. Going forward, the company plans to further standardize and replicate the experience of its top-performing farm lines in health management, feed efficiency, and production performance to more farm lines through technological innovation and management optimization. MUYUAN's current operational focus has shifted to improving the operational quality of existing capacity. For large-scale farming enterprises, slight improvements in indicators such as feed conversion ratio, survival rate, daily weight gain, and disease prevention and control can translate into significant cost changes when amplified by tens of millions of pigs sold. In addition to its core farming business, the slaughter and meat processing business has become an important supplement for MUYUAN during the cyclical trough. MUYUAN began laying out its slaughter and meat processing business in 2019 and achieved annual profitability for the first time in 2025. According to the company's disclosure, the slaughter and meat processing segment remained profitable in both the first and second quarters of 2026. Qin Muyuan, CEO of MUYUAN Meat, revealed that the proportion of self-slaughtered volume in 2025 was 36.75%, indicating substantial room for growth, which also represents the future profit potential of the slaughter and meat processing business. Next, MUYUAN will continue to optimize sales channels and product structure, increase the proportion of cut products, and further promote the expansion of slaughter scale and profitability. At this stage, the significance of the slaughter and meat processing business to MUYUAN is mainly reflected in extending the industrial chain and buffering against fluctuations in the farming cycle. Since the farming business still dominates the company's overall profits, the slaughter segment is not yet sufficient to fully offset the pressure brought by low hog prices. However, continuous profitability indicates that the slaughter capacity previously built by the company is gradually entering the release phase. Improvements in financial structure have also provided MUYUAN with a certain safety cushion to cope with the industry downturn. As of the end of the first quarter of 2026, MUYUAN's asset-liability ratio was 50.73%, a decrease of 3.42 percentage points from the beginning of the year; total liabilities decreased by more than RMB 3.1 billion from the beginning of the year, and the cash balance reached RMB 14.27 billion. The company stated that it has basically completed the construction of large-scale pig farming capacity. In the future, capital expenditures for domestic farming business will gradually decline, and the additional capital expenditure requirements for the slaughter and meat processing business will also be relatively limited. From an industry perspective, the current hog market is still at the bottom of the cycle, but marginal changes have emerged. As the industry continues to incur losses and the inventory of breeding sows is gradually reduced, the earlier capacity reduction is gradually being transmitted to the supply side of commercial pigs. However, whether the rebound in hog prices can be sustained still depends on the subsequent magnitude of capacity reduction, the rhythm of commercial pig shipments, and the recovery of terminal consumption. From a longer-term perspective, cost reductions, profitability of the slaughter business, and progress in optimizing financial structure will determine MUYUAN's profit elasticity in the next round of industry recovery. ### Related Stocks - [02714.HK](https://longbridge.com/en/quote/02714.HK.md) - [002714.CN](https://longbridge.com/en/quote/002714.CN.md) ## Related News & Research - [China Pig Farming Giant Muyuan Expands Board as Founder Retires, Son Joins](https://longbridge.com/en/news/288401079.md) - [Muyuan Foods launches HKD300m–500m H share buyback to boost investor confidence](https://longbridge.com/en/news/290833860.md) - [Asia Cassava Resources expects annual results release on July 13 after audit delay](https://longbridge.com/en/news/292412891.md) - [Cattle Posts Mixed Monday Trade, as Beef Falls](https://longbridge.com/en/news/292537447.md) - [CITIC declares 2025 final dividend of RMB 0.39 per share](https://longbridge.com/en/news/292415836.md)