Muyuan Foods' Hong Kong listing: A global leader in pig farming with both value and growth potential
Muyuan Foods' Hong Kong Listing: A Global Pig Farming Leader with Both Value and Growth
In China's capital market, Muyuan Foods (2714.HK) is a company that has grown amidst controversy: the fluctuations of the pig cycle, heavy asset investment, and the operational state of periodic high debt have repeatedly become the focus of market discussions. However, over a longer time horizon, these once-debated "controversial points" have begun to transform into Muyuan Foods' hard-to-replicate core competitive barriers. The so-called heavy asset investment is not blind expansion, but necessary investment for precise layout across the entire industry chain of pig breeding, feed production, farming, slaughtering, and meat processing, as well as smart farming, ultimately solidifying into industry-leading cost advantages and anti-cyclical capabilities.
On February 6, this leading enterprise with over thirty years of deep cultivation in the pig industry officially listed on the Hong Kong Stock Exchange. This listing not only marks Muyuan Foods' successful establishment of a dual capital platform of "A+H," gaining broader international financing channels, but also signifies a crucial step for the company towards its goal of becoming a "global farming giant."
The Navigator Amidst Industry Transformation: Reconstructing a New Paradigm for Pig Industry Development
As a fundamental industry concerning people's livelihood, the pig industry has long been plagued by pain points such as the fluctuations of the "pig cycle" and disease prevention and control. However, in recent years, with increasingly stringent environmental policies, accelerated large-scale farming, and upgraded consumer demand, the industry is undergoing structural changes—the continuous increase in industry concentration has become an inevitable trend. According to industry data, the penetration rate of large-scale pig farming reached 70.1% in 2024 and is expected to reach 79.4% by 2029. However, compared to the over 90% concentration rate in the United States in 2024, there is still significant room for improvement.
Muyuan Foods took the lead in breaking through the limitations of traditional farming models, constructing a vertically integrated system covering the entire industry chain from pig breeding, pig farming, feed production, to slaughtering and meat processing, achieving controllable processes "from farm to table." This model not only completely solves the pain points of traditional farming, such as "disconnection between upstream and downstream, high costs, and difficulty in quality control," but also forms a powerful synergistic effect—the feed segment provides low-cost, high-quality feed supply for the farming segment, the farming segment provides a stable source of pigs for the slaughtering segment, and the slaughtering segment, in turn, feeds back into breeding and farming based on consumer demand, forming a closed-loop development.
More crucially, Muyuan Foods deeply integrates technology into the entire industry chain. From self-developed air-filtered pig houses and smart inspection robots to data-driven gene selection platforms and optimized soybean meal feed technology, Muyuan continuously optimizes farming efficiency, reduces costs, and improves quality through technological innovation. For the nine months ended September 30, 2025, the company's average PSY reached approximately 28, leading the industry average; the daily weight gain of finishing pigs was about 841 grams, also leading peers; the annual average complete cost further decreased to RMB 12 per kilogram, continuing to consolidate its competitive barrier on the cost side. During the track record period, Muyuan Foods cumulatively held over 1,700 patents. Its ammonia reduction and deodorization solutions and optimized soybean meal feed technology have been promoted by relevant national departments as typical cases to the entire industry, leading the pig industry towards intelligent, green, and standardized transformation.
A Preferred Target for Value Investment: Combining a Solid Foundation with Long-term Returns
Muyuan's appeal stems not only from its strong business model and technological advantages but also from its increasingly stable financial performance and clear shareholder return policy.
On the profitability front, despite the pig industry's obvious cyclical characteristics, Muyuan Foods' extreme cost control capabilities have demonstrated profitability that transcends cycles over the past decade. From 2014 to 2024, the company's net profit compound annual growth rate reached 72.7%, with an average annual net profit margin of 19.0%, making it the only company among the world's top ten listed pork enterprises with an average net profit margin exceeding 15% during the same period. Even during industry downturns, the company has maintained stable profitability, showing strong profit resilience.
Financially, as the large-scale capacity construction from earlier periods is gradually completed, Muyuan is entering an "investment return period." The cumulative net cash inflow from operating activities from 2022 to 2024 already covered cumulative capital expenditures by 1.6 times, and this ratio further increased to 3.9 times in the first three quarters of 2025. The ample cash flow not only provides financial support for the company to continue expanding its competitive advantages but also creates conditions for continuous dividend payments and debt structure optimization. As of the end of the third quarter of 2025, the company's asset-liability ratio was 55.50%, with total liabilities decreasing by approximately RMB 9.8 billion compared to the beginning of the year.
Furthermore, Muyuan Foods has always valued shareholder returns, with cumulative dividends of RMB 16.6 billion from 2022 to the first nine months of 2025. The company's latest 2024-2026 shareholder return plan clearly commits to distributing no less than 40% of the distributable profit achieved each year in cash. This clear return policy not only reflects the company's sense of responsibility towards shareholders but also provides important value support for its future stock price.
Embarking on a New Journey of Global Layout: From a Chinese Leader to a Global Benchmark
This Hong Kong listing marks a new development stage for Muyuan Foods' globalization strategy. Against the backdrop of changing global pork consumption patterns, the company is advancing from a Chinese leader to a world-class agricultural enterprise.
Currently, Muyuan Foods' overseas layout has achieved substantial breakthroughs, demonstrating strong execution capabilities. In 2024, it reached a strategic cooperation with Vietnam's BAF Agriculture Co., Ltd., taking the first step in overseas expansion; in August 2025, it signed a strategic cooperation agreement with the Charoen Pokphand Group. The two parties will carry out comprehensive cooperation in strategic planning, business integration, and global layout, jointly exploring the huge potential of the global market; in September 2025, the cooperation with BAF was upgraded. The two parties collaborated on a high-tech multi-story farming project in Vietnam with a total investment of RMB 3.2 billion, planning an annual output scale of 1.6 million heads, demonstrating the company's ability to replicate its mature domestic farming management model overseas.
According to Muyuan's strategic plan, in the future, while entering overseas markets through light-asset models such as technical services and equipment sales, the company will also choose various methods to carry out international business based on local conditions, including building new production capacity overseas and conducting targeted mergers and acquisitions. The potential growth of overseas business will bring the company hard power to resist pig price risks and provide new growth space.
From the perspective of industry development trends, under long-term steady-state conditions, the pig farming industry as a whole will maintain a reasonable profit level, and enterprises with advantages in farming management and costs are expected to maintain good profitability. Muyuan Foods leads in farming scale, its farming cost advantage continues to strengthen, and its profitability leads peers. Additionally, the company is actively exploring overseas potential, evolving towards a global farming giant, demonstrating rare certainty and growth potential. With the company's continuous investment in deepening the entire industry chain and market expansion, its intrinsic value is expected to be further released in the coming years.
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