New Hope's feed revenue hits 41.4 bln yuan in H1 2026, overseas capacity to reach 8.8 mln tons by year-end

Source | Zhongfang.com Editor | Li Xiaoyan

Amid the volatile landscape of A-share listed pig farming companies, 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 reports, New Hope is not trapped in the single track of pig farming. After 44 years in the agricultural sector, 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 Expansion to Quality-Focused Pig Farming

Many investors still associate New Hope with its aggressive expansion into pig farming and capacity buildup after 2018. As pig 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, the trough period extended, consumer demand weakened, and the sector entered a phase of deep losses.

New Hope's pig farming business came under pressure, recording substantial losses from 2021 onward. Profits accumulated over years 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 become 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 solely driven by traditional product 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, supported by a multi-tier R&D system and multiple R&D bases, targeting specialty species such as California perch and shrimp.

Overseas Expansion: A New Growth Engine

While domestic feed business grows steadily, overseas markets have emerged as a key growth driver. Despite challenges including geopolitical conflicts, raw material price fluctuations, and exchange rate volatility, the overseas segment maintained rapid growth:

• Indonesia: Consolidating scale advantages
• Vietnam: Deepening presence in the southern aquatic feed market
• Egypt: Feed brand remains a local leader
• 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.

Pig Farming: Cost Reduction as Core Goal

In its core pig farming business, New Hope's strategic focus has clearly shifted from pursuing scale to achieving high-quality development. The central objective is to continuously reduce the full cost of pig 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 foundation and optimize its debt structure, the company completed a 2.6 billion yuan capital injection, allocated for 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 financing reserves to weather the cycle trough. In an exclusive interview, the company stated that, given its accumulated industrial assets, diversified business布局, and financial reserves, there is no risk of a debt crisis.

AI and Digital Transformation: Embedding Technology Across the Value Chain

In the long-term competition of the agricultural sector, technological empowerment has become indispensable. New Hope is embedding AI and digital tools across its industrial chain. AI implementation is not just a concept but a practical tool for cost reduction and efficiency gains:

• Finance: AI systems have significantly reduced staffing needs
• 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. Farmers are being trained 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 technologies.

Diversified Business Portfolio: Buffering Cyclical Volatility

New Hope has moved beyond the single framework of agricultural operations, 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 fluctuations:

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

These segments' steady growth helps offset performance volatility caused by pig cycles, enhancing the company's overall risk resilience.

Leadership and Succession: A Century-Old Enterprise Vision

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, acknowledging the team's strategic moves under cyclical pressure, including:

• Divesting non-core assets
• Streamlining operations
• Expanding overseas feed and food brands

The remaining 20 points were left as room for the young management team to continue growing.

New Hope operates under a governance model combining 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 become an enterprise that can thrive for a century.

Challenges Ahead

Despite progress, challenges remain:

• Pig farming costs: Still lag behind industry-leading levels
• Cycle timing: The exact inflection point of the pig cycle remains uncertain
• Feed margins: Despite volume growth, industry competition keeps overall margins low
• Market pressure: Large domestic farming enterprises building their own feed capacity continue to squeeze external pig feed market share
• Overseas risks: Geopolitical, currency, and local competition will test the company's international operations

Outlook: Building Strength for the Recovery

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

Agriculture remains a sunrise industry, with long-term demand for animal protein persisting. Having weathered this cycle, New Hope has shifted from scale-driven growth to quality-first, prudent operations. By abandoning the "bet on the cycle" approach and relying on refined management, technological transformation, and diversified industrial布局, the company aims to navigate volatility.

As industry capacity continues to be rationalized and pig prices eventually recover, this 44-year-old agricultural enterprise is well-positioned to see sustained improvement in its fundamentals, steadily advancing toward its goal of becoming a century-old company.