New Hope Liuhe Co., Ltd.
新希望
000876
Shenzhen Stock Exchange
Company Profile
In 2024, China's agriculture and livestock sector gradually emerged from its downturn, entering a phase of moderate recovery. While consumer demand remained relatively stable, the supply side saw a sustained decline in the breeding sow inventory since the previous year, which eventually led to a continued reduction in market hog supply. This drove a significant rise in hog prices starting in Q2. Although prices retreated from their peak in August, the year-end decline was limited, resulting in a notably higher annual average price compared to 2023—creating favorable conditions for profitability improvements across the industry. During the reporting period, the company focused on its two core segments—feed business and swine farming & slaughtering—capitalizing on the industry's recovery. For its feed business, it strengthened domestic competitiveness while actively expanding into overseas markets to increase its share in key regions. In swine farming, the company implemented biosecurity upgrades at production sites, rigorously optimized costs, and enhanced profitability. Alongside operational improvements, the company pursued strategic partnerships, optimized idle assets, secured flexible multi-channel financing, strengthened capital management, and refined its organizational structure. Through these efforts, the company delivered stronger performance in 2024, achieving quarterly profitability in the last three quarters and a substantial year-on-year profit increase. Financial Highlights: Revenue: RMB 103.063 billion Net profit attributable to shareholders: RMB 474 million, up RMB 224 million (90.05% YoY) Feed Business In 2024, the continued reduction in hog inventories pressured domestic swine feed sales, but lower raw material costs helped improve production efficiency. The rebound in hog prices also boosted profitability in livestock farming, supporting a recovery in feed margins. The company implemented strategic upgrades in feed operations, enhancing raw material procurement, formula R&D, and sales transformation, ensuring stability during the industry's downturn and laying a foundation for future growth. Key Feed Metrics (2024): Total feed sales: 25.96 million tons (including external sales of 21.21 million tons) Poultry feed: 14.96 million tons Swine feed: 8.67 million tons (external sales: 4.22 million tons) Aquafeed: 1.69 million tons Ruminant feed: 440,000 tons Feed segment revenue: RMB 68.698 billion Swine Farming & Slaughtering Business Swine prices followed an "inverted-V" trend in 2024: weak in Q1, rising through Q2, peaking in Q3, and moderating in Q4 (though still slightly above Q1 levels). The annual average price rose ~10% YoY. Despite price volatility, the company strengthened internal management and production efficiency, achieving significant progress in disease prevention (particularly during winter outbreaks), which led to steady cost reductions and profitability in the last three quarters. Swind Operations Highlights (2024): Swine sales: 16.5249 million heads Piglets: 3.002 million Market hogs: 13.5229 million Slaughter volume: 2.78 million heads Revenue breakdown: Hog farming & sales: RMB 23.543 billion Slaughtering: RMB 6.855 billion Total swine segment revenue: RMB 30.398 billion
Full description
The main businesses of the company cover feed business, and swine farming & slaughtering. (I) Feed business: In the Company’s feed business, there are premixed feeds, concentrated feeds as well as compound feeds by nutrient. Among them, premixed feeds and concentrated feeds are both supplied to internal compound feed plants and sold to external markets directly. External customers include other feed enterprises, or dealers with certain feed ingredient procurement, formulation and production capacity, who produce compound feeds on the basis of the Company's premixed feeds, and then resell them to other farmers with their own brands or no brands; large farms that have the above capabilities but produce the compound feeds for their own use. By animal to be fed, the Company’s products include almost all types of feed products such as poultry feeds, pig feeds, aquatic feeds and ruminant feeds. As the Company also has pig farming business downstream, the pig feeds produced are supplied to downstream collaborative farmers and company-run farms in addition to sales to external markets. Aquatic feeds and ruminant feeds produced by the Company are all sold to external markets. After the Company introduced external strategic investors to the white feather poultry segment with the controlling stake transferred, the poultry feeds are almost sold externally. In the downstream sales, the Company has seized the opportunity of increasing the scale of farming in recent years to increase the direct sales for large-scale farms and breeding enterprises, but also attaches great importance to dealers to maintain full coverage of the majority of small and medium-sized farmers. (II) Swine farming & slaughtering business: In the swine breeding sector, the company has established a dual-system "pyramid" breeding structure, primarily based on Hypor's exterior three-way crossbreeding and supplemented by PIC's five-way composite line. This system is tailored to regional market demands in northern and southern China. Against the backdrop of frequent swine disease outbreaks in recent years, the company further implemented a backcross breeding system in the second half of 2023 to enhance breeding stock supply flexibility and regulatory capacity, thereby strengthening operational stability and rapid response capabilities during disease outbreaks or extreme market conditions. Through steady operations since 2021, the company has progressively reversed the temporary setbacks caused by rapid earlier expansion, with continuous improvement across all production metrics. By the end of 2024, the company's average PSY remained above 25, maintaining industry-leading standards. In the commercial fattening stage, the company adapts to local conditions by constructing finishing farms according to specific regional and project requirements. Currently, the production model remains predominantly "company + contractual farmers" (cooperative farming), with integrated self-operated farming as the secondary approach. By the end of 2024, the stock ratio of integrated self-operated farming to cooperative farming was approximately 35:65, with the self-operated proportion increasing compared to 2023. As the company enhances its self-fattening management capabilities and talent development, the share of integrated self-operated farming will gradually rise, aiming for a more balanced development between the "company + contractual farmers" and integrated self-operated models in the future. In terms of swine slaughtering, the Company has established some slaughter supporting facilities in Beijing, Liaoning, Hebei, Shandong, Shaanxi and other places according to the layout and scale of the upstream breeding in different regions. In terms of breeding, in the region with slaughter facilities, the Company gives priority to the internal slaughterhouse for slaughter, and in other regions with no slaughter facilities, pigs are sold externally. In recent years, the Company has enhanced the direct marketing between breeding and external slaughtering enterprises. However, with the current development of the industry, pigs are still need to be sold to pig traders in many regions. In terms of slaughtering, about 70% of the pigs of the Company slaughtered every year are fattened at company-run farms, and the rest are pigs from other farms acquired in the market.