New Hope (000876.SZ) Financial Risk Analysis of 69% Asset-Liability Ratio

Based on the latest financial data, below is a detailed analysis of the financial risks associated with New Hope (000876.SZ)'s 69% asset-liability ratio:

---

Indicator Category	New Hope Data	Industry Average	Risk Assessment
Asset-Liability Ratio	69.0%	~44%	High Risk
Debt-to-Equity Ratio (D/E)	2.23	~0.80	High Risk
Current Ratio	0.49	0.85	High Risk
Quick Ratio	0.26	0.55	High Risk
ROE	4.19%	10.5%	High Risk
Net Profit Margin	1.02%	3.8%	High Risk

---

• 69% Asset-Liability Ratio
  means that for every RMB 100 in assets, RMB 69 comes from debt financing, with shareholder equity accounting for only 31%
• Compared with the industry average asset-liability ratio of approximately 44%, New Hope is 25 percentage points higher than the industry average [0]
• Debt-to-Equity Ratio of 2.23
  indicates that the company’s liabilities are 2.23 times its shareholder equity, reflecting a heavy debt burden [0]

• Current Ratio of 0.49
  (safety threshold should be ≥1.0): Indicates that the company’s current assets are insufficient to cover current liabilities, reflecting severe short-term solvency insufficiency [0]
• Quick Ratio of 0.26
  (safety threshold should be ≥0.5): Excluding inventory, quick assets are even lower, and the liquidity of inventory is questionable [0]
• The stock price has continued to decline recently (9.15% drop in the past 6 months), further weakening asset quality and financing capacity [0]

• ROE of only 4.19%
  , far lower than the industry average of 10.5%, reflecting insufficient shareholder return capacity
• Net Profit Margin of 1.02%
  , indicating that only RMB 1.02 in profit is earned for every RMB 100 in revenue
• Profitability cannot effectively support high debt interest payments, leading to the risk of “borrowing new debt to repay old debt”

---

Risk Type	Risk Level	Specific Performance
Debt Repayment Risk	🔴 High	Approximately 51% working capital gap, enormous short-term debt repayment pressure
Liquidity Risk	🔴 High	Excessively low quick ratio, concerns over the quality of accounts receivable and inventory
Operational Risk	🔴 High	Extremely low net profit margin, insufficient profitability of core business
Valuation Risk	🟡 Medium	P/E ratio of 40.43x (industry average 18.5x), overvalued

---

1. Industry Cycle Impact
   : The pig farming industry has obvious cyclical fluctuations. The sluggish pig prices in 2023-2024 led to widespread losses in the industry, and New Hope, as a leading enterprise, was not spared

2. Aftermath of Aggressive Expansion
   : Large-scale capacity expansion in recent years led to high capital expenditures, resulting in a large amount of fixed assets and debt burden

3. Pressure on Feed Business
   : Rising raw material costs coupled with weak demand from downstream breeding segments have squeezed profit margins

4. Equity Pledge Risk
   : Attention should be paid to the equity pledge ratio of major shareholders, as there may be a risk of control change

---

• The 69% asset-liability ratio falls under
  high-leverage operation
  , and the risk amplification effect is significant during the industry downturn cycle
• A current ratio <0.5 indicates that the company may face a
  liquidity crisis
  and needs to rely on external financing or asset disposal to repay debts
• The current financial risk has been rated as
  High Risk
  [0]

1. Pay attention to the company’s subsequent
   debt replacement
   and
   refinancing plans
2. Watch for performance improvement opportunities brought by the inflection point of the
   pig cycle
3. Monitor the status of
   major shareholders’ pledges
   and
   connected transactions
4. Pay attention to changes in
   government subsidies
   and
   industrial policies

---

: New Hope’s 69% asset-liability ratio indeed poses significant financial risks. Especially coupled with weak profitability reflected by a current ratio of only 0.49 and an ROE of only 4.19%, the company faces substantial debt repayment pressure and liquidity risks. Investors are advised to exercise caution and closely monitor the company’s debt disposal progress and industry cycle changes.

---

[0] Jinling API - New Hope (000876.SZ) Financial Analysis and Real-Time Market Data