New Hope's Feed Sales Hit Record High in H1 2026, Shifts Hog Focus to Cost Cutting

Source | Zhongfang.com Editor | Li Xiaoyan

Amid the volatile landscape of A-share listed pig farming stocks, New Hope Group has remained a closely watched agricultural leader. At its peak, the company boasted a market capitalization of nearly 180 billion yuan. Today, with its market value significantly reduced and over 100 billion yuan erased, public attention has naturally focused on the阶段性 losses in its pig farming operations.

However, beyond the short-term financial noise, New Hope is not trapped in the single track of pig farming. After 44 years in the agribusiness, the company is leveraging its core feed business, global布局, and digital transformation to build resilience through the downturn, pursuing its long-term goal of becoming a "century-old enterprise."

From Scale to Quality: A Strategic Shift in Pig Farming

Many investors still associate New Hope with its aggressive expansion into pig farming and capacity buildup after 2018. As hog prices surged, the industry entered a favorable cycle, and New Hope scaled up its hog output accordingly. Yet the industry cycle reversed more sharply than expected. With the arrival of large-scale farming, a prolonged trough, and weak consumer demand, the sector entered a period of deep losses.

New Hope's pig farming business came under pressure, posting significant losses from 2021 onward. Years of accumulated profits were eroded by the cycle, the debt-to-asset ratio rose, and issues such as convertible bond repayment and debt servicing became focal points of market discussion. These are the inevitable costs of transformation.

Feed Business: The Steady Anchor

Despite the cyclical turbulence, New Hope's founding feed business has emerged as its most solid ballast. In the first half of 2026, the feed segment delivered strong results:

• Revenue: Exceeded 41.4 billion yuan, accounting for 74.55% of total listed company revenue
• Sales volume: Total feed sales reached 16.25 million tons, with external sales of 13.16 million tons — a record high for a half-year period

This growth was not merely driven by volume increases in traditional categories. The company is actively restructuring its feed product mix, moving away from reliance on low-margin poultry feed and focusing on higher-value segments such as:

• Aquatic feed
• Ruminant feed

Sales of aquatic and ruminant feed grew by over 20% year-on-year. To capture opportunities in the aquatic sector, New Hope has established a dedicated management unit, built a multi-tier R&D system, and set up multiple R&D bases to develop specialized products for species such as California bass and shrimp.

Overseas Expansion: A New Growth Engine

While domestic feed business grows steadily, overseas markets have become a key growth driver for New Hope. Despite challenges including geopolitical conflicts, raw material price volatility, and currency fluctuations, the overseas segment maintained rapid growth:

• Indonesia: Consolidating scale advantages
• Vietnam: Deepening presence in the southern aquatic feed market
• Egypt: Feed brand remains a top local player
• Philippines, Bangladesh: Significant sales increases

Capacity expansion is also underway. As of end-2025, overseas feed production capacity stood at 7.4 million tons. New factories are being commissioned in 2026, with overseas capacity expected to reach 8.8 million tons by year-end, forming a dual-drive feed格局 of domestic and international operations.

Cost Reduction in Pig Farming

In its core pig farming business, New Hope has clearly shifted strategy — from pursuing scale to pursuing quality, with the primary goal of continuously reducing the full cost of production.

The company is:

• Optimizing breeding programs
• Strengthening biosecurity systems on farms
• Adjusting the mix between self-raised and contract-farmed pigs

In the first half of 2026, the full cost of fattening pigs decreased by over 1 yuan per kilogram year-on-year, demonstrating tangible cost-reduction progress.

To strengthen its farming operations and optimize its debt structure, the company completed a 2.6 billion yuan fundraising, allocated to digital upgrades of pig farms and debt repayment. Following this financing, the debt-to-asset ratio improved, and risk resilience was further enhanced.

Combined with nearly 80 billion yuan in bank credit lines, New Hope has ample funding reserves to weather the cycle trough. In an exclusive interview, management stated that, given the company's accumulated industrial assets, diversified business布局, and financial reserves, there is no risk of a default crisis.

AI and Digital Transformation

In the long-term competition of the agribusiness, technology empowerment has become essential. New Hope is embedding AI and digital tools across its industrial chain — not as a conceptual exercise, but as a practical means of reducing costs and improving efficiency.

• Finance: AI systems have significantly reduced headcount in certain positions
• Aviation food production: Robots handle processing, reducing labor dependency

Rather than simply laying off workers, the company redirects freed-up talent to new business scenarios, training farmers to use AI tools for tasks such as breed selection, raw material procurement, and credit applications. Chairman Liu Yonghao himself has embraced AI, even leading a company-wide AI-driven lobster farming project to encourage organizational adoption of new technology.

Diversified Business Portfolio

New Hope has long moved beyond a single agribusiness framework, building four major business segments:

1. New Agriculture
2. New Consumer
3. New Materials
4. New Technology

This diversified portfolio provides a hedge against cyclical volatility:

• Dairy: Maintained double-digit profit growth for consecutive years
• Food business: Targeting the fresh consumption market with a national cold-chain distribution network
• New Materials: Upgrading to high-value electronic-grade chemical products

These segments help offset performance fluctuations caused by the pig cycle, giving the company stronger risk resilience.

Leadership and Succession

Liu Chang has been at the helm of New Hope for 13 years. In an exclusive interview, Liu Yonghao gave her a score of 80 out of 100, praising the team's strategic actions under cyclical pressure — including divesting non-core assets, streamlining operations, and expanding overseas feed and food brands. The remaining 20 points, he said, are reserved for the continued growth of the young management team.

New Hope operates under a governance model that combines second-generation family leadership with professional managers, supported by a standardized corporate governance framework. In Liu Yonghao's view, the company's goal is not to break into the Fortune Global 500, but to build an enterprise that can last a century.

Challenges Ahead

Despite progress, challenges remain:

• Pig farming costs still lag behind industry leaders
• The timing of a clear cycle recovery remains uncertain
• Feed margins are under pressure from industry-wide competition
• Large domestic farming enterprises building their own feed capacity are squeezing the external pig feed market
• Overseas expansion faces ongoing geopolitical, currency, and local competition risks

Outlook

This deep adjustment of the pig cycle is forcing the entire industry to eliminate inefficient capacity. For New Hope, every cost-reduction initiative, overseas feed expansion, and digital system upgrade is building momentum for the eventual recovery.

Agriculture is a perennial sunrise industry — the long-term demand for animal protein will not disappear. Having weathered this cycle, New Hope has shifted from scale-driven growth to quality-first, prudent management. By abandoning the gamble on cycles and relying on refined management, technological transformation, and diversified industrial布局, the company aims to navigate volatility.

When industry capacity is further rationalized and hog prices recover, this 44-year-old agribusiness is well-positioned to see sustained improvement in its fundamentals, steadily advancing toward its goal of becoming a century-old enterprise.