In-Depth Analysis of New Hope's Halved Private Placement Scale: Operational Difficulties and Risk Analysis

Based on collected data, we conduct an in-depth analysis of the operational difficulties reflected by the halved private placement scale of New Hope.

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New Hope (000876.SZ) first disclosed its private placement proposal in November 2023, planning to raise no more than

for projects such as hog breeding. In January 2026, two years later, the company issued a revised private placement proposal announcement, drastically cutting the fundraising scale to , a reduction of , nearly halved [1].

:

• Hog Farm Biosafety Prevention and Control and Digital-Intelligent Upgrade Project
• Repayment of bank debts (RMB 1 billion)

Zhao Liang, Secretary of the Board of Directors of New Hope, admitted that the main reasons for the adjustment are to cope with changes in the capital market environment, regulatory approval pace, and the company’s current stable operating status, “which is more in line with the current industry development stage and actual capital needs” [1].

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Indicator	Value	Risk Warning
Current Ratio	0.49	Far below the safe value of 1.0
Quick Ratio	0.26	Far below the safe value of 0.5

Data shows that the company’s current assets cannot cover current liabilities, resulting in enormous short-term debt repayment pressure. As a capital-intensive industry, hog breeding requires huge investments in fixed assets and biological assets. The company mainly relies on financing methods such as bank loans, leading to a long-term high asset-liability ratio [1].

Profitability Indicator	Value	Industry Comparison
Net Profit Margin	1.02%	Significantly lower than the industry average
ROE (Return on Equity)	4.19%	Below the healthy benchmark of 5%
P/E Ratio (TTM)	40.43x	Overvalued

2025 Q3 results show that the actual earnings per share (EPS) was RMB 0.00, significantly lower than the analysts’ expected RMB 0.04, with a

[0], indicating that the company’s operating status is far below market expectations.

New Hope’s predicament is closely related to its early aggressive expansion strategy. In the construction of the “breeding terminal and consumption terminal” dual terminals promoted by Liu Chang, daughter of Liu Yonghao, the company expanded with large-scale debt, but failed to achieve expected returns, instead leading to a persistently high proportion of current liabilities [1].

:

• Current share price: RMB 8.84 per share, with a
  cumulative drop of over 78%
  from the peak in September 2020
• Total market capitalization: RMB 39.8 billion,
  shrinking by over 20%
  compared to when the 2023 private placement proposal was disclosed
• Cumulative
  market value evaporation of nearly RMB 150 billion
  [1]

Indicator	Value
Interruption of Consecutive Dividends	No cash dividends for 5 consecutive years
Accumulated Undistributed Profits	Over RMB 9.8 billion
Total Financing in the Same Period	Over RMB 27.2 billion
Dividend-to-Financing Ratio	Only 23.1%

The company’s long-term behavior of “valuing financing over dividends” has seriously affected market confidence, and it has been labeled an “Iron Rooster” by investors [1].

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Data from the Ministry of Agriculture and Rural Affairs shows that the national stock of breeding sows fell to 39.9 million heads in October 2025, breaking the 40 million mark for the first time since June 2024, and officially entering the policy-prescribed “green and reasonable range” [1].

Against this background,

has become a consensus among leading hog enterprises. Enterprises such as Muyuan Foods and Wen’s Group have clearly stated that they will strictly control the scale of breeding sows and promote refined management.

Unlike its peers which are unburdened, New Hope’s transformation is accompanied by heavy historical burdens:

• Environmental Compliance Issues
  : Past issues including environmental violations and false information disclosure
• Governance Hidden Risks
  : Under the family-style management model, minority shareholders have weak voice
• Related Party Transaction Risks
  : The Liu Yonghao family continues to strengthen its controlling stake through related party transactions, private placements and other methods [1]

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Dimension	Analysis
Capital Market Attitude	Institutional investors’ confidence in the company has declined, with insufficient subscription willingness
Regulatory Pressure	May face stricter approval requirements
Corporate Strategic Adjustment	Shift from scale expansion to stock optimization and debt resolution
Financing Environment	Refinancing has become more difficult, and capital market support has weakened

: The halved private placement scale is not a simple market behavior, but a comprehensive reflection of the company’s operational difficulties - weak profitability, tight liquidity, heavy historical burdens, and room for improvement in governance.

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1. Short-Term Risk
   : Although the debt structure can be improved after the fundraising is in place, the risk that performance improvement fails to meet expectations still exists
2. Compliance Risk
   : If regulatory loopholes reappear in the process of using private placement funds, more severe penalties may be triggered
3. Governance Risk
   : If the problem of unbalanced interest distribution between the family enterprise and minority shareholders cannot be solved, market doubts may be further exacerbated

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[1] Sina Finance - “Fundraising Over RMB 3.3 Billion, Sichuan’s Richest Man’s ‘Last Stand’” (https://finance.sina.com.cn/jjxw/2026-01-18/doc-inhhswmc7931740.shtml)

[0] Jinling AI Financial Database - Market Data and Financial Analysis of New Hope (000876.SZ)