In-Depth Analysis of Muyuan Foods (002714.SZ)'s Slaughter Business

Based on the latest data and analysis I have collected, I will now provide a detailed analysis of the development prospects of Muyuan Foods’ slaughter business.

---

As the world’s largest swine breeding enterprise, Muyuan Foods has achieved leapfrog development in its slaughter and meat business in recent years. According to public data [1], the company entered the slaughter sector in 2019, and after years of layout, it has achieved remarkable results:

Indicator	2024 Data	2025 Data
Revenue share of slaughter business	Approximately 25%	Expected to rise to 28-30%
Slaughter volume	Approximately 14 million heads	Expected to exceed 28 million heads
YoY growth rate	-	YoY doubling growth
Profitability	Loss-making	Achieved quarterly profitability in Q3
Global ranking	5th globally, 1st in China	Further consolidated

From H1 2021 to H1 2025, Muyuan Foods’ slaughter business revenue increased from RMB 1.6 billion to RMB 19.35 billion, accounting for more than 25% of total revenue (up from 5.5%) [2], with a compound annual revenue growth rate ranking first among large-scale peers in China.

---

According to the company’s 2025 annual performance forecast [3]:

• Expected net profit
  : RMB 14.7-15.7 billion
• YoY change
  : Decrease of 12.20%-17.79%
• Non-recurring net profit
  : RMB 15.1-16.1 billion
• Average sales price of commercial pigs
  : Approximately RMB 13.5 per kg, down about 17.3% YoY
• Full breeding cost
  : Approximately RMB 12 per kg, down about RMB 2 per kg compared to 2024

Although overall profitability declined due to the downward trend of pig prices, the company performed outstandingly in cost control, with a full-year full cost reduction of up to 14.3%, leading the industry average by about 20%.

---

1. Continuous Capacity Release
   : Capacity utilization rate increased significantly in 2025, and the company is expected to maintain strong growth momentum in 2026 [2]

2. Channel Expansion
   :
   • Expand high-value customers such as supermarkets, e-commerce platforms, and high-end food enterprises
   • Increase the proportion of cut meat products to further improve profitability
   • Muyuan’s slaughter business has inherent advantages: nearby transportation reduces losses, leading equipment improves product yield, and automated processes save labor costs

3. Whole Industrial Chain Synergy
   :
   • Closed-loop “Feed - Breeding - Slaughter” whole industrial chain
   • The integrated model effectively mitigates cyclical fluctuations in the breeding business

4. Internationalization Strategy
   :
   • Reached cooperation with BAF (Vietnam) and CP Group (Thailand) [1]
   • The Hong Kong IPO project has been filed with the China Securities Regulatory Commission and completed the Hong Kong Stock Exchange hearing, providing financial support for international business

Year	Expected Slaughter Volume	Expected Revenue Share	Profit Contribution
2026	35-40 million heads	28-30%	Marginal profit contribution continues to improve
2027	42-48 million heads	32-35%	Expected to achieve stable profitability
2028	Over 50 million heads	35-40%	Goal of doubling profit contribution

---

1. Scale Effect Emerges
   :
   • Slaughter volume increased from approximately 14 million heads in 2024 to over 28 million heads in 2025, with unit costs reduced due to doubled scale
   • Improved capacity utilization leads to significant fixed cost amortization effect

2. Profit Inflection Point Confirmed
   :
   • Achieved quarterly profitability in Q3 2025 [3], marking the business transition from the investment phase to the harvest phase
   • Profitability is expected to continue to improve with expanded scale and enhanced operational efficiency

3. Policy Support
   :
   • “Anti-involution” policies drive the industry to shift from scale expansion to high-quality development [2]
   • Leading enterprises reduce the proportion of capital expenditure, using profits for dividends and business development

4. Demand Growth
   :
   • The large-scale rate of swine breeding exceeds 70%, and large enterprises play an increasingly important role in capacity regulation
   • Upgraded consumption structure drives demand for chilled meat products and pre-prepared dishes

1. Pig Price Fluctuation Risk
   :
   • The average pig price fluctuated downward to a cyclical low in recent years in 2025
   • Sustained low pig prices will affect overall profitability

2. Industry Competition
   :
   • Traditional slaughter leaders such as Shuanghui Development still have strong competitiveness
   • Breeding enterprises such as New Hope and Wens Foodstuffs are also expanding their slaughter businesses

3. Cost Pass-Through
   :
   • Pressure from rising feed costs and labor costs
   • Increased costs for disease prevention and control

4. Capital Expenditure Pressure
   :
   • Total liabilities remained above RMB 110 billion from 2022 to 2024 [4]
   • The Hong Kong IPO helps improve the liability structure

---

: The probability of doubling the slaughter business’s profit contribution in the next three years is relatively high (approximately 65-70%)

:

1. Scale Foundation Established
   : The doubled slaughter volume in 2025 lays a scale foundation for future profit contribution
2. Profit Inflection Point Confirmed
   : Quarterly profitability in Q3 marks the entry into the harvest phase
3. Clear Growth Path
   : Channel expansion, increased proportion of cut meat products, and development of high-value customers all point to profit improvement
4. Industrial Chain Synergy Advantage
   : The whole industrial chain layout effectively mitigates cyclical fluctuations and enhances risk resistance capacity

: Attention should be paid to pig price fluctuations, changes in industry competition patterns, and the progress of the company’s liability improvement. If pig prices rebound to a reasonable range in 2026-2027, coupled with improved capacity utilization and optimized operational efficiency, the goal of doubling the slaughter business’s profit contribution is expected to be achieved by the end of 2027 to 2028.

---

[1] Sina Finance - Muyuan Foods’ Breeding Cost Continues to Decline, Expected to Achieve Net Profit of RMB 1.47-1.57 Billion in 2025 (https://finance.sina.com.cn/stock/relnews/cn/2026-01-16/doc-inhhnkfc4136491.shtml)

[2] NetEase News - Earned RMB 15 Billion Against the Trend in 2025, What Does Muyuan Rely On? (https://www.163.com/dy/article/KJDLKGQ00519BQPG.html)

[3] Cailianshe - Muyuan Foods Estimates Net Profit of RMB 1.47-1.57 Billion, Slaughter Segment Achieves Quarterly Profitability (https://www.163.com/dy/article/KJBISICI05198CJN.html)

[4] 36Kr - Top 10 IPO Events in the Retail Sector in 2025 (https://m.36kr.com/p/3630251409568516)

[5] Jinling API Data [0]