Muyuan Foods Group Co.,Ltd., China's largest hog farming enterprise, reported a sharp earnings reversal in the first half of 2026, swinging from profit to a substantial loss as the domestic pork price cycle downturn deeply impacted the industry.

According to the company's semi-annual report released on August 20, revenue for the period came in at RMB 59.41 billion, down 22.3% year-on-year. The net loss attributable to shareholders reached RMB 6.08 billion, a dramatic swing from the RMB 10.53 billion profit recorded in the same period last year, representing a 157.7% deterioration. Basic earnings per share fell from RMB 1.96 to a loss of RMB 1.10.

Meanwhile, net cash flow generated from operating activities turned negative, registering at RMB -2.22 billion for the reporting period versus a net inflow of RMB 17.35 billion a year earlier, underscoring notable liquidity strain. The company stated that no cash dividend, bonus share issuance, or capital reserve conversion to share capital would be made for this reporting period.

Low Pork Prices Are the Core Pressure Point

Throughout this year, Muyuan Foods Group Co.,Ltd.'s average commercial hog selling prices have remained persistently low, hovering near RMB 10 per kilogram for most of the period from March to June. Hog farming continues to dominate the company's overall profitability structure, and the depressed pork prices directly served as the primary driver behind the massive first-half loss.

At the industry level, the live hog market remains at the bottom of its cycle. As sustained industry losses prompt a gradual reduction in breeding sow inventories, the earlier capacity consolidation is now transmitting through to the commercial hog supply side. However, whether pork prices can stage an effective rebound still hinges on the magnitude of subsequent capacity reductions, the pace of commercial hog slaughter, and the recovery trajectory of end-user consumption.

Revenue and Profit Slide in Tandem, Profitability Sharply Constricted

Financial data reveals that Muyuan Foods Group Co.,Ltd.'s first-half revenue declined by more than RMB 16.2 billion year-on-year, a drop of 22.3%. Excluding non-recurring items, the net loss attributable to shareholders stood at RMB 5.895 billion, down 155.2% year-on-year, largely consistent with the headline net loss figure, indicating that the losses stem primarily from core operations rather than one-off factors.

The weighted average return on equity plunged from 13.79% in the prior-year period to -7.48%, a contraction of 21.27 percentage points, reflecting a significant erosion of profitability.

On the asset side, the balance sheet remained relatively stable. Total assets at the end of the reporting period reached RMB 175.06 billion, up modestly by 1.93% from the end of the prior year. Net assets attributable to shareholders stood at RMB 80.19 billion, an increase of 3.21% from year-end levels. The debt-to-asset ratio was 54.18%, essentially flat compared to 54.15% at the end of last year.

In terms of debt obligations, the company maintains an outstanding convertible bond, the "Muyuan Convertible Bond," issued in August 2021 with a maturity date of August 2027, currently carrying a balance of RMB 9.543 billion. The EBITDA interest coverage ratio tumbled sharply from 13.81 times in the prior-year period to just 3.42 times in the current reporting period, a steep decline that highlights a substantially compressed buffer for interest payments under current earnings conditions. As the convertible bond enters its final phase before maturity, the company's refinancing arrangements and cash flow management will continue to attract close market scrutiny.