Pig prices hit a record low! "Pig King" Muyuan Foods' slaughter and meat business posted its first annual profit, reducing debt by over 17 billion yuan last year.

Source: Time Finance Author: Zhou Li

                    Image source: Tuchong Creative

“The practices of 2025 have strengthened our belief that pig farming, although a traditional industry, is a good sector worth deep cultivation,” said Qin Yinglin, Chairman of Muyuan Foods (002714.SZ; 02714.HK), in the annual report’s address. Technological innovation has opened up vast opportunities for the company’s development. This is also the first time since Muyuan Foods went public on the A-share market in early 2014 that the chairman’s address has been included in the annual report.

On the evening of March 27, Muyuan Foods released its 2025 annual report. During the reporting period, the company achieved operating revenue of 144.145 billion yuan, a year-on-year increase of 4.49%; and net profit of 15.812 billion yuan, a year-on-year decrease of 16.45%. Regarding “increased revenue without increased profit,” Muyuan Foods mentioned in its earnings forecast that due to fluctuations in the hog market, the average selling price of commercial pigs for the entire year was approximately 13.5 yuan/kg, a year-on-year decrease of about 17.3%, leading to a decline in the company’s overall profitability.

Zhuochuang Information pig analyst Rong Zhifa told Time Finance that in 2025, pig prices are trending downward. The continuous decline in pig prices has led the pig farming industry into a loss phase since mid-September of that year, with the average profit per pig dropping from 309.71 yuan in January to a loss of 184.95 yuan per pig in December.

“2025 is in a capacity release phase, with abundant market supply of pigs, but limited demand-side support, setting the tone for low pig prices in 2025,” said Rong Zhifa.

During this down cycle, Muyuan Foods supplied 77.981 million commercial pigs to society in 2025, providing 7.09 million tons of high-quality pork to meet the pork demand of over 100 million people. The survival rate of pigs and various indicators are steadily improving, and costs are gradually decreasing, with the total breeding cost for pigs in 2025 being approximately 12 yuan/kg, a year-on-year decrease of about 2 yuan/kg. The strong cost control capability allows Muyuan Foods to effectively cope with cyclical pressures.

However, the winter for pig farming seems far from reaching a turning point, and the challenges facing Muyuan Foods are not yet over. Entering 2026, pig prices continue to hit bottom. On March 23, Zhuochuang Information reported that the national average trading price for lean pigs was 9.71 yuan/kg, hitting a historical low. Meanwhile, the main contract for pig futures dropped to 9,815 yuan/ton during trading on March 27, also a historical low since this futures variety was listed in January 2021.

Against this backdrop, cost reduction and efficiency improvement remain the industry’s main themes.

Muyuan Foods expressed confidence in further cost reductions, stating that the costs of its excellent farms can currently be controlled below 11 yuan/kg, indicating that the path to continued cost reduction is feasible. In the future, the company will focus on technological innovation in pig farming and efficiency improvement, promoting overall breeding cost reductions through standardized fine management and personnel training empowerment, replicating and promoting the experiences of excellent farms.

At the earnings presentation on the evening of March 27, Muyuan Foods’ Chief Financial Officer Gao Tong even proposed the annual average cost target for this year—to be below 11.5 yuan/kg.

Notably, while the main breeding business faces pressure, the company’s second growth curve—the meat processing business—has achieved breakthroughs.

The annual report shows that in 2025, Muyuan Foods processed 28.663 million pigs, a year-on-year increase of 129%, with the annual production capacity utilization rate reaching 98.8%; sales of fresh and frozen pork products totaled 3.23 million tons. The meat processing business achieved operating revenue of 45.228 billion yuan, a year-on-year increase of 86.32%, marking the first annual profit since its establishment.

“This marks that, driven by capacity release, channel expansion, and operational optimization, the company’s meat processing business has transitioned from its startup phase into a new stage of development,” said a Muyuan Foods representative, adding that the slaughter volume in 2026 is expected to continue to grow, and with the optimization of sales channels and product structure, profitability is expected to further enhance.

As profitability is expected to strengthen, the optimization of the financial structure reserves “ammunition” for the company to navigate the industry’s winter. The regular report shows that by the end of 2025, Muyuan Foods’ debt-to-asset ratio was 54.15%, a decrease of 4.53 percentage points from the beginning of the year, with total liabilities down by 17.1 billion yuan from the beginning of the year, exceeding the annual debt reduction target.

At the same time, Muyuan Foods’ net cash flow from operating activities last year reached 30.056 billion yuan, a year-on-year decrease of 19.94%, with total cash outflow from operating activities increasing by 14.39% year-on-year. Muyuan Foods stated that this was mainly due to an increase in cash paid for purchasing goods and labor services.

It is worth mentioning that Muyuan Foods’ self-breeding and heavy asset investment model in pig farming has a non-cash cost ratio (including depreciation and amortization) of about 10% in its cost structure. This may allow Muyuan Foods to still achieve positive cash inflows even during periods of low pig prices due to lower cash costs.

Muyuan Foods stated that it has passed the large-scale construction investment phase, and as capital expenditures gradually decline, the company’s cash flow generation capability is increasing, entering a cash flow harvest period, which lays a solid foundation for raising the dividend payout ratio.

According to the regular report, Muyuan Foods plans to distribute a cash dividend of 4.27 yuan (tax included) for every 10 shares to all shareholders, with a total dividend amount of 2.435 billion yuan (tax included). If the above proposal is approved by the shareholders’ meeting, combined with the semi-annual cash dividend of 5.002 billion yuan (tax included), the total cash dividend for Muyuan Foods in 2025 will be 7.438 billion yuan (tax included), accounting for 48.03% of the net profit attributable to the parent company for the year.

While deeply cultivating its domestic business, Muyuan Foods is actively focusing on and exploring overseas markets.

In 2025, Muyuan Foods made substantial progress in its overseas development, cooperating with Vietnam’s BAF Company and Thailand’s Charoen Pokphand Group, focusing on the Southeast Asian market, leveraging its technological and management advantages to open up new growth spaces. In February 2026, the company officially listed on the Hong Kong Stock Exchange, becoming the first domestic pig farming company to be listed in both “A+H” markets.

“Overseas development is an important task for the company in the next 3 to 5 years or even longer. In the future, we will also explore more markets and cooperation models,” Gao Tong mentioned at the earnings presentation, noting that the company’s overseas development is currently focused on its first stop in Vietnam, with the goal of establishing its own production capacity in Vietnam this year. The expected capital expenditure for this year should be within 1 billion yuan, “This will also provide a certain foundation for the entire technical path and team in the local area, which is our main goal this year.”