Analysis of Muyuan Co., Ltd.'s Competitive Advantage with RMB 12/kg Pig Breeding Cost

Based on the latest data and market research, I will systematically analyze Muyuan Co., Ltd.'s competitive advantage with its RMB 12/kg pig breeding cost for you.

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Muyuan Co., Ltd.'s average annual total pig breeding cost in 2025 is

, a decrease of RMB 2.06/kg from RMB 14.2/kg in 2024, representing a year-on-year drop of 14.5%. This cost level is absolutely leading in the industry, with the following specific performances:

Indicator	Value	Industry Position
2025 Average Total Cost	RMB 12.04/kg	Industry No.1
Cost Lead Over Industry	RMB 2.46/kg	Significantly Leading
December Monthly Cost	RMB 11.6/kg	Excellent farm lines < RMB 11/kg
2026 Cost Target	RMB 10.75-11/kg	Sustained Decline

Muyuan adopts the “integrated self-breeding, self-reproduction, and self-farming” model, which stands in sharp contrast to the “company + farmer” model adopted by enterprises like Wen’s Group. The characteristics of this model include:

• Full Process Control
  : Independent management from breeding stock reproduction to fattening and slaughter, enabling more precise disease prevention and control
• Higher Efficiency
  : Standardized factory farming model, facilitating replication, promotion, and technological iteration
• Lower Cost
  : Eliminates the farmer raising fee, while spreading fixed costs through economies of scale
• Strong Risk Resistance
  : Independent of external partners, resulting in higher operational stability

Muyuan has made significant investments in intelligent breeding, establishing a complete digital management system:

Intelligent System	Function	Cost Reduction Contribution
Intelligent Feeding System	Precisely delivers feed according to pigs’ growth stages	Reduces feed waste by 8-10%
Environmental Control System	Real-time adjustment of temperature, humidity, and air quality	Reduces disease incidence by 15%
Health Monitoring System	Sensors track physiological indicators in real time	Timely response to abnormal alerts
Intelligent Environmental Control System	Precision management via big data and AI	Improves overall operational efficiency by 30%

As of the end of 2025, the company’s

, and intelligent equipment such as automatic feeding, environmental control, and health monitoring has realized precise management across the entire breeding process [1].

Muyuan has established an independently developed intelligent breeding system:

• PSY Level
  : Increased to
  29 piglets
  (number of weaned piglets per sow per year), up 2 from 2024, leading the industry
• Survival Rate
  : Full-process survival rate of approximately 83%, compared to the industry average of 75-78%
• Daily Weight Gain
  : Daily weight gain of fattening pigs of approximately 830 grams, leading the industry
• Feed-to-Meat Ratio
  : Feed-to-meat ratio of approximately 2.8 during the fattening stage, among the lowest in the industry
• Rotational Dual-Breed Breeding System
  : Has significant advantages in reproductive performance, growth rate, lean meat percentage, etc.

Muyuan’s innovations in feed formulas are an important source of its cost advantage:

Indicator	Muyuan Co., Ltd.	Industry Average	Advantage Margin
Soybean Meal Usage Ratio	7.3%	14.5%	7.2 percentage points reduction
Cost Reduction per Pig	Approximately RMB 30	-	Industry-leading
Annual National Soybean Savings	1.95 million tons	-	Significant Ecological Benefits

The low-protein diet technology not only reduces feed costs but also achieves environmental benefits such as nitrogen emission reduction [2]. The company began promoting this technology in 2011, and in 2021, it donated the low-protein diet technology to the industry free of charge, demonstrating the social responsibility of a leading enterprise.

Muyuan’s scale advantage has formed a strong cost moat:

• Market Share
  :
  10.2%
  (1 out of every 10 pigs slaughtered in China comes from Muyuan)
• Production Capacity
  : Over
  80 million pigs per year
  , exceeding the total of the 2nd to 4th ranked enterprises such as Wen’s Group, New Hope, and Zhengbang Technology
• Fixed Assets
  : Over RMB 100 billion, forming a strong heavy-asset barrier
• Full Industrial Chain
  : Covers breeding, feed, farming, and slaughter; the vertically integrated model ensures quality control and anti-cyclical capabilities

Enterprise	2025 Cost	Gap vs. Muyuan	Model
Muyuan Co., Ltd.	RMB 12.0/kg	Benchmark	Self-breeding and self-farming
Wen’s Group	RMB 12.2/kg	+RMB 0.2/kg	Company + Farmer
Shennong Group	RMB 12.2/kg	+RMB 0.2/kg	Self-breeding and self-farming
New Hope	RMB 13.0/kg	+RMB 1.0/kg	Company + Farmer
Giant Star Agriculture & Animal Husbandry	RMB 13.5/kg	+RMB 1.5/kg	Self-breeding and self-farming
Industry Average	RMB 14.5/kg	+RMB 2.5/kg	-

As can be seen from the comparison, Muyuan’s cost advantage ranges from

, which means:

• At the current pig price level, Muyuan can obtain
  RMB 200-300
  of excess profit per pig
• During industry downturns (such as the widespread industry losses in 2023), Muyuan can still maintain profitability
• During industry boom periods, Muyuan has greater profit elasticity

Based on the latest data, the main sources of Muyuan’s cost reduction in 2025 include:

Cost Reduction Factor	Contribution	Explanation
Raw Material Price Decline	Approximately RMB 1.0/kg	Price drops of raw materials such as corn and soybean meal
Improved Health Conditions	Approximately RMB 0.4/kg	Decreased mortality rate, reduced animal health care expenditures
Improved Labor Efficiency	Approximately RMB 0.3/kg	Increased slaughter volume spreads labor costs
Improved Growth Efficiency	Approximately RMB 0.2/kg	Increased daily weight gain, optimized feed-to-meat ratio
Improved Sow Efficiency	Approximately RMB 0.2/kg	Increased PSY reduces piglet costs

Muyuan’s cost advantage is directly reflected in its financial data:

Financial Indicator	Muyuan Co., Ltd.	Industry Level
ROE (Return on Equity)	29.21%	Industry average approximately 15%
Net Profit Margin	14.50%	Industry average approximately 8%
Profit per Pig	Approximately RMB 255	Industry average approximately RMB 100
2025 Estimated Net Profit	RMB 15.1-16.1 billion	-

• 2026 Cost Target
  : RMB 10.75-11/kg
• Main Cost Reduction Paths
  :
  • Continued promotion of disease purification, expected to reduce mortality rate by another 2 percentage points
  • Increased proportion of three-way cross pigs, continued optimization of feed-to-meat ratio
  • Sustained improvement in intelligent environmental control efficiency

• Internationalization Strategy
  : Has deployed in Southeast Asian markets such as Vietnam and Thailand to replicate domestic cost advantages
• Deepened Technological Barriers
  : R&D investment of RMB 1.747 billion, with 1,464 patents
• Increased Industry Concentration
  : As a leading enterprise, Muyuan will continue to benefit from industry integration

Muyuan Co., Ltd.'s cost advantage constitutes its core competitive barrier:

1. Moat Width
   : The cost leadership advantage of RMB 2.5/kg is equivalent to approximately 20% cost advantage, which is a sufficiently wide moat
2. Profit Stability
   : Maintains profitability during industry downturns, with more stable performance amid cyclical fluctuations
3. Growth Potential
   : Sustained growth in slaughter volume coupled with continuous cost reduction forms a pattern of “growing volume and expanding profit margins”
4. Valuation Support
   : Cost advantages support a higher valuation center; the 2024 price-to-earnings ratio (P/E) is approximately 15x, which is low relative to its growth potential

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[1] China Post Securities - Muyuan Co., Ltd. (002714): Cost Advantages Build the Widest Moat, the Breeding Leader Enters a New Stage (https://pdf.dfcfw.com/pdf/H3_AP202503211645494629_1.PDF)

[2] Dongguan Securities - In-Depth Report on Muyuan Co., Ltd.: Refining Internal Strength to Navigate Cycles (https://pdf.dfcfw.com/pdf/H3_AP202402291624103892_1.pdf)

[3] Securities Times - A-Share Pig Breeding Leader to Earn Over RMB 15 Billion in 2025! (https://www.stcn.com/article/detail/3596007.html)

[4] Xueqiu - Summary of Muyuan Co., Ltd.'s 2025 Costs (https://xueqiu.com/1632625377/370634798)

[5] Daxumu - Latest Pig Breeding Costs and Targets of 17 Listed Pig Enterprises Including Wen’s, Muyuan, and Shennong (June 2025) (https://www.dxumu.com/93445.html)

[6] CVO Info - Normalized Meager Profits in the Pig Breeding Industry: Enterprise Survival Amid RMB 5/kg Cost Competition (https://www.cvonet.com/news/detail/807157.html)