Input-Output Analysis of New Hope's Pig Farm Digital-Intelligent Upgrade

Based on the information I have collected, I will systematically analyze the input-output situation of New Hope’s pig farm digital-intelligent upgrade.

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New Hope’s Pig Farm Digital-Intelligent Upgrade Project has undergone multiple adjustments, with the scale of raised funds gradually reduced:

Time Node	Pig Farm Digital-Intelligent Project Investment	Total Private Placement Scale	Project Adjustment Description
December 2023 (Initial Proposal)	3.646 billion yuan	7.35 billion yuan	Initial private placement proposal released
August 2024 (First Revision)	2.7 billion yuan	3.8 billion yuan	Canceled minority equity acquisition project
2025 (Second Revision)	2.338 billion yuan	3.338 billion yuan	Further lowered the upper limit of fund-raising

According to the latest private placement proposal, the total investment of New Hope’s pig farm digital-intelligent project reaches

, with of raised funds planned to be used, and the remaining funds will be self-raised by the company [1].

The project mainly covers four upgrade directions:

• Biosecurity Facility and Equipment Upgrade
  : Enhance animal disease prevention and control capabilities
• Intelligent Equipment Upgrade
  : Introduce intelligent equipment such as precise feeding and environmental control
• Information Platform Construction
  : Build a digital management system
• Breeding Pig Upgrade
  : Optimize population quality and genetic performance [1][2]

As of the first half of 2025, New Hope still has

on its books, with a total budget of . These projects will continue to increase the company’s capital expenditure pressure [1].

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New Hope’s pig business is facing severe operating pressure:

• Four Consecutive Years of Losses
  : New Hope’s pig business has been in continuous loss from 2021 to 2024 [1]
• Persistent Low Pig Prices
  : In September 2025, pig prices fell below the cost line again, and the industry entered a new downward cycle
• Strict Capacity Control Policies
  : The Ministry of Agriculture and Rural Affairs requires 25 leading pig enterprises to reduce production by 1 million heads by the end of the year

Financial Indicator	End of Q3 2025	Industry Warning
Asset-Liability Ratio	69.49%	Remains High
Monetary Funds	7.419 billion yuan	—
Short-Term Interest-Bearing Liabilities	24.182 billion yuan	Cash is far from sufficient to cover short-term debts
Long-Term Interest-Bearing Liabilities	31.968 billion yuan	—

Against this background, the 1 billion yuan used to repay bank debts is a drop in the bucket [1].

At the national policy level, the pig breeding industry is continuously promoted to develop in the direction of

:

• The 14th Five-Year Plan for Promoting Agricultural and Rural Modernization clearly requires the promotion of standardized large-scale breeding
• The Ministry of Agriculture and Rural Affairs has launched a new round of actions to improve standardized large-scale pig breeding
• Digital agriculture and rural development, as well as “Internet+” modern agriculture, have become strategic priorities [2]

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According to the project benefit calculation disclosed by New Hope, digital-intelligent upgrading is expected to bring the following cost optimizations:

Cost Item	Optimization Range	Benefit Source
Comprehensive Breeding Cost	Target to be reduced to below 13 yuan/kg	Intelligent feeding and precise management
Feed Waste	Reduced by 0.2 kg/head/day	Precise feeding system
Energy Consumption Cost	Reduced by 35%-40%	Intelligent environmental control system
Labor Cost	Significantly optimized	Automated equipment replacing labor

Referring to the application practice of Wen’s Group, an industry benchmark, intelligent systems can achieve the following [3]:

• Mortality Rate of Sows and Piglets
  : Reduced from 15% to 6%, a decrease of about 9 percentage points
• Average Weight of 28-Day-Old Piglets
  : Increased by about 0.4 kg
• Pen Transfer Efficiency
  : Increased by 80%
• Immunization Injection Efficiency
  : Increased by 30%

• Pig Inventory Accuracy
  : Close to 100%
• Pig Slaughter Efficiency
  : Increased by more than 50%
• Labor Release
  : 9 employees can be freed per production line, with a total of 45 employees freed across the entire farm
• Labor Cost Savings
  : Approximately 27 million yuan per year [3]

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According to industry practical experience, the investment payback period of intelligent systems is about

[3], with main income sources including:

• Feed Cost Savings
  : Approximately 8.4 million yuan per year for a farm with a scale of 10,000 pigs
• Labor Cost Optimization
  : Approximately 27 million yuan per year
• Vaccine Cost Savings
  : More than 5 yuan saved per pig
• Incremental Income from Improved Production Performance

Risk Type	Specific Performance	Impact Level
Pig Price Fluctuation Risk	Persistently low pig prices, falling below the cost line	High
Capacity Policy Risk	Strict control over new capacity; the project does not involve expansion	Medium
Financial Pressure Risk	High asset-liability ratio, high pressure to repay short-term debts	High
Investment Payback Risk	Long payback period for the 2.92 billion yuan investment	Medium-High

It is worth noting that the project

and mainly focuses on the renewal and upgrade of existing pig farms. Against the background of low pig prices, even if costs are reduced, the profit margin will still be limited by market prices [1].

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Enterprise	Full Cost (yuan/kg)	Digital-Intelligent Level	Model Characteristics
Wen’s Group	Approximately 12.6	High	Company + Farmer model; contract breeding fees are linked to market conditions
Dekang Animal Husbandry	Below 12.5	High	Family farm cooperation model; ROE reaches 38.4%
Shennong Group	Relatively Low	Relatively High	90% contract breeding; guaranteed price of 16.8 yuan/kg
New Hope	13.6	Relatively High	54.4% contract breeding; average annual output of 2,644 pigs per farmer

In 2024, New Hope sold

through the contract breeding model, accounting for of its total pig sales. It has cooperated with more than , with an average annual output of about per farmer, generating in income for farmers [4].

High-quality contract farmers can earn

per pig, which is higher than the industry average. The contract breeding segment contributes about [4].

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1. Correct Strategic Direction
   : Aligns with the industry’s intelligent upgrading trend and complies with national policy guidelines
2. Solid Technical Foundation
   : The company has corresponding technical and talent reserves
3. Great Cost Optimization Potential
   : Expected to significantly reduce comprehensive breeding costs
4. Synergy with Contract Breeding Model
   : Digital-intelligent upgrading can empower cooperative farmers and improve the overall contract breeding level

1. Huge Financial Pressure
   : High asset-liability ratio and high debt repayment pressure
2. Downward Industry Cycle
   : Persistently low pig prices put pressure on the realization of project benefits
3. Large Investment Scale
   : The 2.92 billion yuan investment has a long payback period
4. Policy Uncertainty
   : Strict capacity control policies may affect project returns

New Hope’s Pig Farm Digital-Intelligent Upgrade Project is an

carried out by the company at the bottom of the industry cycle, which is of strategic significance in the long term. However, in view of:

• The current situation of continuous losses in the industry
• High financial leverage
• Long investment payback period

This project is more like a

, and it will be difficult to reverse the performance decline in the short term. It is recommended that investors focus on the inflection point of the pig cycle and the improvement of the company’s asset-liability ratio.

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[1] Sina Finance - “Pig Prices Fall Below Cost Line Again in September; When Will the Pig Industry Turn the Corner After Four Consecutive Years of Losses” (https://finance.sina.com.cn/stock/observe/2026-01-16/doc-inhhnzar2532289.shtml)

[2] Eastmoney - “Impact of Dilution of Immediate Returns from A-Share Issuance to Specific Objects on the Company’s Main Financial Indicators” (https://www.cfi.net.cn/p20260112002290.html)

[3] Lasseter Robotics - “A Frontline Farm Manager of Wen’s Group Tells: How AI Changes Our Pig Breeding Methods” (http://lwscenter.com/news/11/168.html)

[4] Sina Finance - “Caution! Don’t Only Look at Contract Breeding Fees for Cooperative Breeding! Wen’s Group, New Hope” (https://cj.sina.cn/articles/view/6652117697/18c7f42c10010156ny)