Yunnan Shennong Agricultural Industry Group Co Ltd

Shennong Group released its 2026 interim report, with net profit attributable to the parent company swinging from profit to a loss of 809 million yuan, a decrease of 1.196 billion yuan compared with the same period last year, down 308.74 percent year on year. Total operating revenue was 2.489 billion yuan, down 11.02 percent year on year. Net cash flow from operating activities was negative 375 million yuan, down 167.35 percent year on year. The latest gross margin was 0.89 percent, down 21.00 percentage points from the same period last year. Diluted earnings per share were negative 1.56 yuan, down 308.00 percent year on year.

Hog prices continue to run at low levels, and multiple listed pig companies plan to suspend new farm construction projects. Shennong Group announced it intends to suspend construction of the Longmen pig farm project of Guangxi Daxin Shennong Agriculture Company Limited, which originally planned an investment of 120 million yuan, aimed at implementing hog production capacity control targets. Earlier, New Wellful terminated the construction project of a 2,400-head sire line pig farm in Yangjiadu Village, Huitong County, by Hunan Tianxin Breeding Company Limited in May. ST Longda announced on July 22 the termination of two hog breeding investment projects, scaling back capacity expansion and shifting focus to safeguarding cash flow and improving quality and efficiency at already operational pig farms.

Shennong Group announced the suspension of the Longmen pig farm project, which was designed to produce 180,000 high-quality piglets annually, in order to implement hog production capacity control targets. The total investment for the project was 120 million yuan, and it was approved by the board of directors in June 2025. The company stated that the suspension is a prudent decision made in consideration of regulatory policies, market conditions, and its own business strategy, and will not adversely affect operations. Shennong Group has seen rapid capacity growth in recent years, with slaughter volumes rising from 652,700 head in 2021 to 3,074,200 head in 2025. However, the average selling price of commercial hogs in the first half of the year was about 9.9 yuan per kilogram, a year-on-year decline of approximately 32 percent, leading to an estimated net loss attributable to shareholders of between 720 million and 880 million yuan. Previously, New Wufeng and ST Longda also terminated some pig farm construction projects. The national sow herd inventory fell to 37.8 million head at the end of the second quarter, just 300,000 head above the normal retention target of 37.5 million head.

Shennong Group disclosed its performance forecast, expecting a net loss attributable to the parent company of 720 million to 880 million yuan in the first half of 2026, compared with a profit of 388 million yuan in the same period last year. The net loss after deducting non-recurring items is expected to be 730 million to 890 million yuan, compared with a profit of 398 million yuan in the same period last year. The company stated that during the reporting period, the average selling price of commercial pigs was about 9.90 yuan per kilogram, a decrease of about 32% compared with the same period last year. The significant year-on-year decline in pig sales prices led to a loss in the farming business. In addition, the company made impairment provisions for some inventories based on the principle of prudence.

Shennong Group announced that in June 2026, the company sold 280,300 commercial hogs, up 31.53% year-on-year. Revenue from commercial hog sales was 324 million yuan, down 15.18% year-on-year. The average selling price of commercial hogs was 9.06 yuan per kilogram, down 0.66% month-on-month.