Tangrenshen's Hog Sales Rise 23% but Revenue Only Grows 8%: Profitability Assessment Amid a Falling Hog Price Cycle

Tangrenshen’s 2025 sales data reveals the typical dilemma of the hog breeding industry amid a falling hog price cycle——

.

Core Indicators	2024	2025	YoY Change
Hog Sales Volume	4.3377 million head	5.3325 million head	+22.98%
Sales Revenue	RMB 7.847 billion	RMB 8.479 billion	+8.0%
Revenue per Head	RMB 1,809	RMB 1,590	-12.1%
Estimated Selling Price	~RMB 14.5/kg	~RMB 12.8/kg	-11.7%

• Scissors gap reaches 14.98 percentage points
  : The huge gap between sales volume growth (22.98%) and revenue growth (8.00%) indicates that the dividends from scale expansion are completely eroded by falling hog prices
• Deterioration worsened in December alone
  : Sales volume increased 8.35% month-on-month while revenue decreased 0.28% month-on-month, indicating sustained downward pressure on hog prices [0][1]

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Currently, China’s hog breeding industry is in the downward phase of the 6th hog cycle, with hog prices continuing to decline and hitting bottom in 2025:

• In late November 2025, the average purchase price of hogs was only
  RMB 13.11/kg
  , down 0.9% month-on-month and plummeting 27% year-on-year [1]
• The year-end consumption peak failed to drive up hog prices, and the supply-demand imbalance persists
• The industry has maintained
  16 consecutive months of profitability
  since May 2024, but profit margins have continued to narrow

• As of the end of July 2025, the national inventory of breeding sows reached
  40.42 million head
  , equivalent to 103.6% of the normal stock level
• The large-scale breeding rate has increased from less than 50% in 2017 to
  70%
  , and small-scale farmers are being eliminated at an accelerated pace due to high costs and weak risk resistance [1]
• Leading enterprises (such as Muyuan, Wens, etc.) have strong financing capabilities and high loss resistance, and are instead “maintaining” their production capacity

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According to the latest financial data, Tangrenshen is facing significant profitability pressure [0]:

Financial Indicators	Value	Assessment
ROE (Return on Equity)	-4.58%	Loss-making Status
Net Profit Margin	-1.02%	Negative Profit
Current Ratio	0.97	Under Pressure from Short-term Debt Repayment
Quick Ratio	0.47	Tight Cash Flow
P/E	-23.84x	Negative Valuation Due to Losses

Company	Breeding Cost (RMB/kg)	2024 Net Profit	Slaughter Volume (10,000 Head)
Muyuan Foods	13.5	RMB 18.5 billion	63.82
Wens Foodstuffs	14.0	RMB 9.25 billion	22.33
ST Tianbang	14.2	RMB 1.45 billion	6.50
New Hope Liuhe	14.5	RMB 0.755 billion	15.57
Tangrenshen	14.8	~RMB 0.45 billion	4.34

• Tangrenshen’s breeding cost of
  RMB 14.8/kg
  is approximately
  RMB 1.3/kg
  higher than that of industry leader Muyuan (RMB 13.5/kg)
• With hog prices only at RMB 12.8/kg, this cost disadvantage directly translates into losses [1]

Assuming the industry’s total cost is approximately RMB 14/kg:

Scenario	Selling Price (RMB/kg)	Gross Profit (RMB/kg)	Gross Profit Margin
2024	14.5	+0.50	3.4%
2025	12.8	-1.20	-9.4%

The decline in hog prices caused the gross profit margin to drop sharply by 12.8 percentage points, completely eroding profit margins.

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Amid a falling hog price cycle, the profitability of breeding enterprises should be assessed from the following dimensions:

Assessment Dimension	Key Indicators	Tangrenshen’s Performance	Industry Position
Cost Control	Total Cost, Feed Conversion Ratio	RMB 14.8/kg	Third Tier
Scale Effect	Slaughter Volume, Unit Cost Allocation	4.34 million head	Medium Scale
Cash Flow Health	Current Ratio, Operating Cash Flow	0.97/0.47	Tight
Industrial Chain Synergy	Self-sufficiency Rate of Feed, Proportion of Meat Products	Full Industrial Chain Layout	Potential
Cycle Resistance Capability	Hog Price Sensitivity, Downstream Buffer	High Sensitivity	Weak

Traditional Model: Breeding → Sales (fully dependent on hog prices)
    ↓
Risk: High sensitivity to hog prices, no buffer
    ↓
Integration Model: Feed → Breeding → Slaughtering → Meat Products → Brand Retail
    ↓
Advantage: Profit distribution across the industrial chain, hedging cycle risks

Although Tangrenshen has laid out a full industrial chain (feed “Camel”, breeding “Meishen”, meat products “Tangrenshen”),

, and hog breeding still accounts for a large proportion of its revenue.

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1. Risk of Sustained Decline in Hog Prices
   • If hog prices remain below the cost line for a long time, the company will continue to incur losses
   • Analysts expect that market pressure will not ease until Q3 2026 [1]

2. Liquidity Risk
   • Current ratio <1, quick ratio only 0.47
   • Refinancing becomes more difficult amid the industry’s downward cycle

3. Cost Control Pressure
   • Fluctuations in feed raw material prices
   • Uncertainty in disease prevention and control

Dimension	Rating	Explanation
Scale Effect	★★★☆☆	4.34 million head, medium scale
Cost Advantage	★★☆☆☆	Cost of RMB 14.8/kg, higher than leading enterprises
Cash Flow Status	★★☆☆☆	Current ratio 0.97, quick ratio 0.47
Industrial Chain Synergy	★★★★☆	Full industrial chain layout, potential in meat products business
Cycle Resistance Capability	★★☆☆☆	High sensitivity to hog prices

• Short-term (within 6 months):
  Cautiously wait and see, as no clear turning point in hog prices has emerged
• Medium-term (6-12 months):
  Monitor the progress of capacity reduction and the effects of policy interventions
• Long-term:
  The industrial chain integration strategy is promising, but it is necessary to wait for an industry cycle reversal

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[0] Jinling AI - Tangrenshen (002567.SZ) Company Profile and Financial Data

[1] 21st Century Business Herald - “Giants Hit the Brakes, Small Farmers Exit: Who is ‘Manipulating’ the Hog Cycle?” (https://www.21jingji.com/article/20251218/herald/4dbfc751d8a8bd92a8bef218961c55f8.html)

[3] Jiemian News - “Behind the Sharp Loss Reversals of Muyuan Foods, Wens Foodstuffs, etc.: Hog Prices Rose 10% Overall Last Year” (https://www.jiemian.com/article/12225024.html)