Muyuan Shares IPO: Cornerstone investors strongly support, global pig industry leader with ample scarcity value

Muyuan Foods' IPO: Cornerstone investors strongly support, global leader in pig industry with rare value

In the Hong Kong stock market, investors can find industry leaders in energy, finance, technology, and pharmaceuticals, but there has long been a lack of a core target representing China's modern agriculture and animal husbandry. With Muyuan Foods Co., Ltd. ("Muyuan Foods") launching its Hong Kong IPO on January 29, this structural gap is expected to be filled. For this IPO, Muyuan Foods plans to issue approximately 274 million H shares globally, with each lot consisting of 100 shares, a maximum issue price of HK$39, and an entry fee of HK$3,939.34. It is expected to list on the Stock Exchange on February 6, completing the "A+H" dual capital platform layout.

Notably, Muyuan Foods' Hong Kong IPO has also introduced 14 well-known domestic and international institutions as cornerstone investors, including Charoen Pokphand Foods, Wilmar (Wii Pte. Ltd. and HPRY), Sinochem Hong Kong, Hong Kong YUNONG International, Fidelity Fund, RBC Global Asset Management (Asia) Limited, Perseverance Asset Management, Shanghai Gaoyi and Huatai Capital Investment (related to Gaoyi's OTC swaps), Ping An Life Insurance, Dajia Life, UBS AM Singapore, Midea Development Holdings BVI, Millennium, and Jane Street. These investors have collectively subscribed to approximately $685 million in shares, equivalent to locking in about 50% of the issued shares in advance. This not only serves as a heavyweight endorsement of Muyuan's investment value by the capital market but also marks the recognition of this global pig farming leader's accelerated internationalization by global long-term capital.

From "Scale Leader" to "All-Round Champion": A Fully Integrated Industrial Chain Builds an Unshakable "Moat"

As the industry leader that has ranked first globally in both pig production capacity and slaughter volume for four consecutive years, Muyuan Foods has established a vertically integrated business model covering the entire pig industry chain, including pig breeding, pig farming, feed production, and slaughtering. This not only achieves traceable food safety control throughout the entire process but also builds an extreme cost control system and synergistic effects, ultimately achieving comprehensive leadership in scale, efficiency, cost, and quality, making it a rare core asset in the pig farming industry.

In the pig farming segment, Muyuan Foods continuously optimizes breeding costs and improves efficiency through its independent breeding system, optimized feed formulas, intelligent farming, and advanced biosecurity prevention systems. Data shows that from 2019 to 2024, Muyuan Foods' average annual total cost (i.e., the total cost and expenses per kilogram (live weight equivalent) of pig farming) remained the lowest among large-scale pig farming enterprises in China. In 2025, the total cost further decreased to RMB 12 per kilogram, building solid profitability resilience during industry cycles.

As an important extension of the industrial chain, the slaughtering and meat business has, since its deployment in 2019, allowed Muyuan Foods to gain insights into consumer demand through the slaughtering segment, feeding back into breeding and farming to form a dynamic closed loop of "farming - slaughtering - consumption." This vertically integrated industrial chain not only enhances product value-added but also, through a fully traceable system, continuously provides consumers with healthy, safe, and high-quality pork products at competitive prices. Its exceptional quality has received authoritative recognition: in December 2023, Muyuan Foods became the first company in Henan Province to be approved by the Hong Kong Food and Environmental Hygiene Department as a registered supplier of chilled pork to Hong Kong; in November 2024, after an on-site inspection by Hong Kong Food and Environmental Hygiene Department officials, its full-chain quality control system received high praise.

In just five years, Muyuan Foods has achieved a globally leading position in the slaughtering business. In terms of slaughter volume in 2024, Muyuan Foods ranked first in China and fifth globally. From 2021 to 2024, the company's slaughtering business revenue grew at a compound annual growth rate that led domestic large-scale pig slaughtering and meat enterprises. In the first three quarters of 2025, slaughter volume further increased to approximately 19.164 million heads, with capacity utilization rising to 88.1%, and the company achieved profitability in a single quarter in Q3, further enhancing the stability of its overall profitability.

Steady Operations Strengthen Development Confidence, Financial Resilience and Shareholder Returns Go Hand in Hand

Thanks to the synergistic empowerment of the fully integrated industrial chain, Muyuan Foods has maintained rapid growth while achieving a leading market position. From 2014 to 2024, the company's total revenue grew at a compound annual growth rate of 48.7%, ranking first in revenue growth among the top ten global listed pork companies by slaughter volume. In terms of revenue structure, in the first three quarters of 2025, the slaughtering and meat business accounted for 28.5% of total revenue, becoming an important support for hedging against farming cycle fluctuations and stabilizing overall performance.

At the same time, extreme cost efficiency has also endowed Muyuan Foods with stronger profitability resilience, enabling it to maintain relatively stable profits during market downturns and fully release profit elasticity during boom cycles. Even in the volatile market environment of pig prices, Muyuan Foods achieved a compound annual growth rate of 72.7% in net profit from 2014 to 2024, with an average annual net profit margin of 19.0%. It is the only company among the top ten global listed pork companies by slaughter volume to achieve an average annual net profit margin exceeding 15.0% from 2014 to 2024.

Steady profit performance has also provided solid support for Muyuan Foods to continuously optimize its financial structure. The company actively promotes debt reduction and leverage stabilization. As of the end of Q3 2025, the company's asset-liability ratio was 55.50%, with total liabilities decreasing by approximately RMB 9.8 billion from the beginning of the year. Considering the RMB 5 billion equity distribution completed in October, the company has already exceeded its target of reducing total liabilities by RMB 10 billion set at the beginning of 2025, making its financial structure healthier.

On the other hand, long-term capital investments in the past have gradually transformed into strong cash flow generation capabilities. From 2022 to 2024, Muyuan Foods' cumulative net cash inflow from operating activities covered 1.6 times its cumulative capital expenditures, with the net cash inflow from operating activities in 2024 being 3.0 times capital expenditures. In the first three quarters of 2025, this ratio further improved to 3.9 times. As the company's large-scale capacity construction nears completion, future capital expenditures will gradually decline, and free cash flow levels will steadily increase, accumulating ample ammunition for business expansion and shareholder returns.

Supported by solid financial strength, Muyuan Foods continues to pay high dividends to reward shareholders. From 2022 to the nine months ended September 30, 2025, the company has declared cumulative dividends totaling RMB 16.6 billion. Additionally, the company has clarified its shareholder return plan for 2024-2026, increasing the annual cash distribution ratio from no less than 40% of the distributable profit achieved in the current year, providing investors with a clear, stable, and attractive return path.

At a time when the pig industry is transitioning from scale expansion to high-quality development, Muyuan Foods, with its full industrial chain control, extreme cost advantages, and exceptional profit performance, demonstrates strong resilience to navigate industry cycles and achieve long-term growth. This Hong Kong listing marks an important step in its internationalization. According to the prospectus, the company plans to use 60% of the net proceeds to explore overseas opportunities and expand its business footprint. With the completion of the Hong Kong listing, Muyuan will not only gain smoother access to international capital but also, leveraging this platform, accelerate technology exports, brand internationalization, and resource integration, further consolidating its leading position in the global pig industry and opening up broader long-term growth space.