Understanding Muyuan's Annual Report: How Is a "Solid" Performance Report Made?

Ask AI · How were Muyuan Co., Ltd.'s low-cost advantages forged?

With solid development and substantial progress, this is how Muyuan Co., Ltd. Chairman Qin Yinglin described the performance of the company over the past year. As he put it, in 2025, Muyuan Co., Ltd. validated the true colors of “pig-mao” using real data.

On March 27, Muyuan Co., Ltd. released its 2025 annual report. Full-year revenue reached RMB 8B, and it achieved a net profit of RMB 144.15B. Beyond the scale of its performance, from many operational details, outsiders can glimpse the company’s highlights of operations.

In fact, in 2025, the hog breeding industry still saw low-level fluctuations, and the industry’s profitability space was hardly “comfortable.” Against this backdrop, Muyuan Co., Ltd. demonstrated strong cost control ability, compressing full breeding costs to about RMB 12 per kg, once again becoming a low-cost “benchmark” among domestic pig companies.

Also in 2025, Muyuan Co., Ltd.'s long-planned slaughter and meat-processing business reaped returns and achieved annual profitability for the first time. This not only suggests the company has found a link that can form good synergy with its hog breeding core business, but also indicates that its “second growth curve” has been formally established.

Even more noteworthy is that in 2025, Muyuan Co., Ltd. comprehensively reshaped its own value. The company exceeded its deleveraging target, its cash flow creation capacity improved significantly, and it rolled out a high-dividend plan, making its “steady base” even more solid; at the same time, the company has been steadily advancing its overseas initiatives, injecting imagination into long-term growth potential.

Low-cost**“Surviving the Cycle”**

Many companies are unable to “survive the cycle.” The biggest pain point is that they cannot “cope with the unknown.”

In fact, “coping with the unknown” does not mean predicting the future. Instead, amid drastic changes in the times and the industry, a company’s real way of mastering the craft lies precisely in cultivating internal strength and laying solid foundations. Because only when the company itself stands firm can it face storms with confidence, stay on course, and go far.

Hog breeding is the foundation of Muyuan Co., Ltd.'s ability to stand on its own. Looking across 2025, the company has centered on the core business philosophy of**“Seeking within”, not only**** maintaining**** a profitable**** scale in**** industry turbulence****,**** but also**** building a cost-competition barrier that is hard to replicate****, further stabilizing the “platform” of its main business.**

The 2025 annual report shows that Muyuan Co., Ltd. achieved a full cost for commodity pig breeding of RMB 12 per kg for the full year, down RMB 2 per kg year over year, and its full hog breeding cost showed a declining trend quarter by quarter. Meanwhile, some of the company’s outstanding sow-farm production lines can already keep costs below RMB 11 per kg.

According to estimates by Huatai Securities, the industry average cost of self-breeding and self-raising in 2025 was about RMB 13.7 per kg, and Muyuan Co., Ltd. led by about RMB 1.7 per kg on the cost side, with per-head hog breeding profit leading by about RMB 177.

Hog breeding costs cover many areas, such as feed, piglets, labor, disease prevention, and depreciation of fixed assets. Among these, feed led by corn, wheat, and soybean meal accounts for about roughly 60% of hog breeding costs. Behind Muyuan Co., Ltd.'s “cost reduction,” on the one hand, comes from its continuous and meticulous implementation of feed cost management.

It is understood that Muyuan Co., Ltd. has continued to research low-soybean daily rations, applying a diet design system based on net energy and true digestible amino acids to fully make use of fermented amino acids to reduce the amount of soybean meal and cut down traditional diets’ reliance on corn and soybean meal. Moreover, while ensuring nutritional content, the company flexibly adjusts feed formulations based on the value-for-money of raw materials to achieve lower feed costs.

On the other hand, Muyuan Co., Ltd. is also able to reduce costs thanks to its high level of attention to hog health management. In 2025, the company invested RMB 6 billion to build a super-healthy breeding platform. Taking the latest data as an example, from January to February 2026, the survival rate of hogs throughout the full process was 83%-84%; the survival rate from weaning to market listing was 89% or above; PSY was around 28; daily weight gain for fattening pigs was around 860g; and the full-process feed-to-meat ratio was around 2.7.

Looking ahead, as Muyuan Co., Ltd. continues to increase investment in areas including hog breeding, nutrition R&D, disease prevention and control, and intelligent and digital capabilities, its “cost reduction” path in hog breeding still has plenty of room to deliver.

In a research report, Morgan Stanley said that in 2026 Muyuan Co., Ltd. still has further room to reduce costs, with costs expected to fall to RMB 10.9 per kg, and to further decline to RMB 10.7 per kg in 2027.

According to Muyuan Co., Ltd.’s plan, considering that feed raw material prices may rise slightly, the company’s 2026 cost target is to reduce full-year average costs to below RMB 11.5 per kg.

Slaughter and Meat Processing**“From Cocoon to Butterfly”**

Low-cost hog breeding is undoubtedly Muyuan Co., Ltd.'s operational “weapon,” and breakthroughs in its slaughter and meat-processing business have injected entirely new momentum into its growth.

Looking back at history, as early as 2019, Muyuan Co., Ltd. built modern capacity near its core breeding regions to move into the slaughter and meat-processing sector. After years of accumulation, the company’s slaughter and meat-processing layout has finally crossed the start-up stage.

The annual report shows that in 2025, Muyuan Co., Ltd. slaughtered 28.663 million hogs and sold 32.3 million tons of pork products such as fresh and frozen pork. Revenue from its slaughter and meat-processing business was RMB 15.81B, up 86.32% year over year, and it achieved its first annual profitability since its establishment.

It is understood that in recent years, Muyuan Co., Ltd. has accelerated the construction of a national sales network. By the end of 2025, it had set up more than 70 sales branches across 20 provincial-level administrative regions, and its channel advantages have become increasingly prominent. At the same time, the company places great emphasis on pork quality: it cultivates high-quality pork belly through breeding technology, promotes refined segmentation to meet the needs of different consumer tiers, and optimizes production scheduling with digital and intelligent means. With a series of measures working together, the slaughter and meat-processing business ultimately achieved good results.

According to materials, slaughter and meat processing carries the responsibility of—from acquiring hogs—to supplying downstream markets with pork products such as whole carcasses and portioned items; it is a key part of the pork industry chain. Of course, Muyuan Co., Ltd. already covers feed processing, breeding of breeding stock, and the rearing of commodity pigs, and the existence of slaughter and meat processing also enables the company to close the loop across the industry chain.

Currently, relying on stable hog supply, Muyuan Co., Ltd. is able to provide high-quality, low-cost raw materials for its downstream slaughter and meat-processing business. Meanwhile, expanding the slaughter and meat-processing business, in turn, increases the added value of the company’s hog breeding business. In the long run, as profitability from the slaughter and meat-processing business continues to grow, the company will inevitably break the single-profit model of “only earning from breeding,” and thereby be able to share profits across the entire industry chain.

For its 2026 operating plan for the slaughter and meat-processing business, Muyuan Co., Ltd. stated that related capital expenditures will be higher than in 2025. The company also mentioned three key points: first, slaughter volumes will maintain a growth trend, and based on market demand and business plans, it will steadily push forward the implementation of slaughter capacity that has been planned but not yet built; second, it will continue optimizing its customer structure, expanding major customers such as supermarkets, new retail, catering, and food processing enterprises, focusing on customer needs to carry out customized services and the development of high value-added products, increasing the proportion of portioned items, and enhancing product profitability; third, it will continuously achieve cost reduction and efficiency gains through intelligent production scheduling, refined cost management, and advancing digital management upgrades, while also strengthening the training of management executives to improve overall operating efficiency.

Co-creatingValue

The long-term development of any company is inseparable from solid support from healthy finances.

In 2025, optimizing the financial structure became one of Muyuan Co., Ltd.'s most eye-catching operating answer sheets. The company proactively advanced deleveraging efforts, exceeding the deleveraging target for the whole year. By the end of the year, its** asset-liability ratio fell to 54.15%, down 4.53 percentage points from the beginning of the year, and total liabilities decreased by RMB 17.11 billion****.**

In the same period, Muyuan Co., Ltd. recorded net cash flow from operating activities of RMB 8B, with impressive performance. Based on the current situation, the company has already passed the period of large-scale construction investments. Each year, fixed-asset depreciation is about RMB 14 to 15 billion. As capital expenditures gradually decline, the company has officially entered the “harvest season” for cash flow.

It is worth noting that Muyuan Co., Ltd.'s hog breeding model is self-breeding and self-raising with heavy-asset investment, and non-cash costs such as depreciation and amortization account for about 10%. Therefore, even when it is in a period of low hog prices, it can still generate positive cash inflow by relying on lower cash costs.

With ample cash flow, Muyuan Co., Ltd. maintains “high-intensity” dividend payments. Previously, in the first half of 2025, the total cash dividend was RMB 8B (including tax), accounting for 47.5% of net profit attributable to shareholders; the company’s 2025 profit distribution proposal shows that it intends to pay all shareholders a cash dividend of RMB 4.27 per 10 shares (including tax), with a total dividend of RMB 3.23M (including tax).

Overall, in 2025 the total cash dividends paid by Muyuan Co., Ltd. exceeded RMB 7.4 billion, accounting for about 48% of the net profit attributable to shareholders for the year. The company is sharing development outcomes with shareholders using real money and building a long-term, stable investment return mechanism.

As a leading hog breeding company, Muyuan Co., Ltd.'s value is not limited to deleveraging, cash flow, and high dividend payments. Currently, the company is also increasing its investment in overseas initiatives and going abroad to find new growth points.

Unlike the domestic hog market, where competition is trending toward a mature, inventory-based landscape, overseas markets still hold considerable development opportunities. For example, in emerging Southeast Asian markets such as Vietnam, the industry is less scaled and less intensive; development is still at an early stage, and future growth potential is significant—providing a good window for Chinese pig companies to plan their overseas layout.

Muyuan Co., Ltd. has also selected Southeast Asia as its first stop for overseas expansion. In 2025, it reached cooperation with Vietnam’s BAF Company and Thailand’s CP Group (Charoen Pokphand Group). Among them, the company will co-invest with BAF to build an annual output project for 1.6 million head of commodity pigs, and BAF aims to achieve a 10 million head annual output scale by 2030.

From a capital perspective, Muyuan Co., Ltd. also completed its “debut” in the Hong Kong stock market on February 6, 2026, becoming the first domestic hog breeding company listed in both “A+H” markets. With the listing on the Hong Kong Stock Exchange, the company raised over HK$10 billion, and nearly 60% of the funds will be used to expand its overseas business footprint, strongly supporting the acceleration of globalization.

After more than three decades, Muyuan Co., Ltd. has already used real-world results to prove that it is a “leader” in China’s hog sector. Now, standing at a new starting point for overseas expansion, the company is taking the posture of an explorer and leading the industry onto a broader stage.

Editor-in-charge | Chen Bin