Analysis of the Impact of Concentration Improvement in the Pig Farming Industry on New Hope's Market Share

Based on the latest industry data and public information disclosed by New Hope, I will provide you with a systematic analysis of

.

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China’s pig farming industry is undergoing a significant process of large-scale and intensive operation. According to data from the Ministry of Agriculture and Rural Affairs,

, an increase of 35 percentage points [1][2].

Indicator	2017	2019	2021	2023	2024
CR3	7%	10%	14%	16%	17.01%
CR5	9%	13%	17%	20%	20.93%
CR10	12%	17%	22%	25%	25.59%
Market Share of Top 20 Pig Enterprises	7%	-	-	28%	30.7%

Data Source: Qianzhan Industry Research Institute, Ministry of Agriculture and Rural Affairs [2][3]

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New Hope has vigorously developed its pig farming business since 2016, with its slaughter volume rapidly increasing from 2.4 million heads in 2017 to a peak of 14.61 million heads in 2022. However, affected by industry cyclical fluctuations and the company’s strategic adjustment,

, a decrease compared to 17.68 million heads in 2023 [4][5].

• Pig farming business revenue: RMB30.398 billion
• Piglet sales: 3.002 million heads
• Fattened pig sales: 13.5229 million heads
• Net profit attributable to parent company: RMB474 million (year-on-year increase of 90.05%) [4]

New Hope is currently facing the issue of

:

• Designed capacity: 30 million heads/year
• Actual capacity utilization rate: approximately 59%
• Inventory of breeding sows: approximately 740,000-820,000 heads
• Expected slaughter target for 2025: 17-18 million heads [4][5]

In 2024, New Hope significantly improved its core production indicators through farm line transformation, epidemic prevention upgrade and management optimization [4]:

Indicator	2023	2024	Change
PSY (Pigs Weaned per Sow per Year)	23.0	24.7	+1.7
Average number of weaned pigs per litter	10.5 heads	10.8 heads	+0.3 heads
Weaning cost	380 RMB/head	290 RMB/head	-90 RMB
Fattening survival rate	89%	92%	+3pct
Feed-to-meat ratio	2.79	2.67	-0.12
Full cost	15.6 RMB/kg	14.2 RMB/kg	-1.4 RMB

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With the improvement of industry concentration,

:

• Muyuan Foods slaughtered 71.6 million heads in 2024, with a market share of over 10%, which is 4.3 times that of New Hope, the fourth place
• Wen’s Group slaughtered 30.18 million heads in 2024, with a market share of approximately 5%, nearly twice that of New Hope
• New Hope’s market share has long hovered in the range of 2-2.5% and is difficult to break through [2][3]

• As of the end of Q3 2024, New Hope’s asset-liability ratio still reached 70.85%
• Compared with leading enterprises, New Hope is at a disadvantage in terms of financing capacity and capital cost
• The company has lowered its 2024 slaughter target from 24 million heads to 17 million heads,
  proactively reducing its scale
  [5][6]

Comparison of breeding costs of leading pig enterprises in China (2024) [3]:

Enterprise	Full Cost (RMB/jin)
Muyuan Foods	5.65
Wen’s Group	6.20
New Hope	6.25
Juxing Animal Husbandry	6.10
Industry Average	6.85

Although New Hope’s cost is lower than the industry average, there is still a gap of

compared with Muyuan Foods.

• Large-scale breeding brings procurement cost advantages (feed, animal health products, etc.)
• New Hope’s annual feed sales volume is 25.96 million tons,
  accounting for 8.2% of national output
  , with significant industrial chain synergy effects [4]
• Through the parallel operation of the “company + farmer” and self-breeding and self-fattening models, it flexibly responds to market changes

• Independently developed breeding software HUGE-HOPE, realizing breeding value calculation for 6 growth traits + 6 reproductive traits
• The winter epidemic prevention transformation in 2024 reduced the incidence rate by more than 70% year-on-year, significantly reducing the loss of dead and culled pigs
• Weaning cost dropped to 290 RMB/head, a decrease of 90 RMB compared with the previous year [4]

In 2024, the company adjusted its pig industry strategy to

, no longer pursuing absolute growth in slaughter volume, but focusing on improving profitability [5][6].

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Scenario	2025 Slaughter Volume (10,000 heads)	Expected Market Share	Driving Factors
Optimistic	1,800	2.5%	Cost drops below 14 RMB/kg, pig prices remain high
Neutral	1,700	2.4%	Cost stabilizes at 14.2 RMB/kg level
Conservative	1,600	2.3%	Industry competition intensifies, capacity decommissioning is slow

1. Industrial Chain Synergy
   : Integrated layout of feed + breeding + slaughter, reducing intermediate costs
2. Technological Accumulation
   : PSY reaches 24.7, which is at the leading level in the industry
3. Overseas Layout
   : Operates more than 60 subsidiaries in 15 countries, with overseas feed sales volume increasing by 40% [4]
4. Brand Effect
   : Brand and channel advantages accumulated by New Hope in the agriculture and animal husbandry industry for more than 30 years

• Animal epidemic risk (African swine fever, etc.)
• Risk of cyclical fluctuations in pig prices
• Capital chain pressure
• Intensified competition brought by further improvement of industry concentration

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1. Short-term Pressure
   : Leading enterprises are accelerating expansion, making it difficult for New Hope to significantly increase its market share, which is expected to remain in the range of 2-2.5%
2. Long-term Opportunities
   : Industry integration is beneficial to enterprises with cost advantages and technological strength. New Hope is expected to achieve more stable profits in the
   “era of cost competition”
   through cost reduction and efficiency improvement
3. Strategic Value
   : New Hope proactively reduces its scale and optimizes its structure instead of blindly expanding, reflecting a more rational development approach

For investors, the value of New Hope lies not in the rapid increase of market share, but in

.

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[1] Ministry of Agriculture and Rural Affairs, China Agri - 2024-2025 China Pig Industry Development and Investment Analysis Report (https://www.cnagri.com/news/industry/2025-04-18/11061.html)

[2] Qianzhan Industry Research Institute - Competition Pattern and Market Share of China’s Pig Farming Industry (https://bg.qianzhan.com/trends/detail/506/250801-eaf5472d.html)

[3] Jushi Consulting - Brief Analysis Report on Pig Farming Industry (http://chinamcr.com/report-jp/reportjp20251222.pdf)

[4] New Hope Liuhe Co., Ltd. - 2024 Annual Report Summary (https://file.finance.qq.com/finance/hs/pdf/2025/04/26/1223314073.PDF)

[5] China Post Securities - New Hope (000876): Q3 Performance Improved Significantly, Costs Continue to Decline (https://pdf.dfcfw.com/pdf/H3_AP202411041640694066_1.pdf)

[6] Haitong International - New Hope (000876): Short-term Pressure on Pig Capacity Expansion, Production Costs Continue to Optimize (https://pdf.dfcfw.com/pdf/H3_AP202401241617987066_1.pdf)

[7] 21st Century Business Herald - New Hope (000876): Profitability of China’s Third-Largest Pig Farming Enterprise Continues to Improve (https://www.21jingji.com/article/20250827/herald/d589e640280dace942b2ac867e4103f0.html)

[8] Xinhua News Agency - Concentration of Pig Industry Continues to Improve, Small and Medium-sized Enterprises May Exit Acceleratedly (http://www.news.cn/food/20230504/c6a1672275944a2eb27872c175688bb3/c.html)