Dekon Food and Agriculture Group (DEKON AGR) reported a sharp turnaround for the six months ended 30 June 2026, posting a net loss of RMB1.31 billion versus a RMB1.23 billion profit in the prior-year period. Basic earnings per share fell to –RMB3.00 from RMB3.02.

Revenue declined 13.7% year on year to RMB10.09 billion, dragged by a 20.7% fall in the core pig segment to RMB7.83 billion. The average selling price (ASP) of commodity hogs dropped 30.9% to RMB10.40/kg, reflecting industry-wide oversupply and low market prices. Pig gross losses, coupled with a RMB196.69 million inventory impairment on low hog prices, pushed group gross margin from 18.3% to –6.4%.

Poultry revenue slipped 4.5% to RMB1.27 billion; however, segment ASP rose 13.8% to RMB14.70/kg, leaving the poultry unit profitable. Ancillary products, mainly fresh meat and feed ingredients, doubled revenue to RMB0.98 billion on higher slaughter volume.

Operating cash outflow reached RMB594.68 million, reversing an inflow of RMB1.74 billion a year earlier. Net debt increased to RMB3.30 billion, lifting the net debt-to-equity ratio to 44.1% from 22.4% at year-end 2025. Total borrowings stood at RMB4.97 billion, of which 52% matures within two years.

Capital expenditure totalled RMB934.03 million, focused on farm upgrades, feed mills and IT projects. Cash and cash equivalents closed at RMB4.62 billion. No interim dividend was declared.

Liquidity measures weakened; the current ratio slipped to 1.1 (31 Dec 2025: 1.4) and interest coverage turned negative (–10.3).

Key non-operating items included: • Investment income of RMB496.66 million, primarily from closing hog futures positions. • Net fair-value loss of RMB92.25 million on outstanding derivatives. • RMB115.89 million finance costs, down 17% on higher deposit interest income.

Corporate actions and events: • Between January and April 2026, the company repurchased 1.89 million H-shares for HK$125.48 million; treasury shares total 3.52 million. • On 4 August 2026, DEKON AGR issued US$100 million zero-coupon convertible bonds due 2027; proceeds are earmarked for debt repayment and working capital. • No significant investments, acquisitions or disposals were completed during the reporting period.

Management highlighted ongoing cost-reduction initiatives in genetics, feed optimisation and biosecurity, alongside digital upgrades and hedging strategies to mitigate cyclical volatility in the hog market. The board confirmed compliance with Hong Kong’s Corporate Governance Code and maintained sufficient public float.