Investment Value Analysis of New Hope's Private Placement and Pig Farm Biosecurity Upgrade

Based on the collected data and materials, I will prepare a systematic and comprehensive analysis report for you.

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According to the private placement prospectus (second revised version) disclosed on January 12, 2026, New Hope (000876.SZ) plans to issue A-shares to specific targets, with a total fundraising amount of no more than

, which is halved from the previously planned RMB 6.6 billion [1][2].

Fund Usage	Amount (RMB 100 million)	Proportion	Purpose
Biosecurity Prevention and Control as well as Digital and Intelligent Upgrades of Pig Farms	23.38	70%	Upgrade biosecurity prevention, intelligentization, informatization, and breeding pigs for 77 existing pig farms
Repayment of Bank Debts	10.00	30%	Optimize capital structure and reduce asset-liability ratio

It is worth noting that this private placement

, but a comprehensive upgrade and transformation of existing pig farms. According to the announcement, the project will comprehensively update and upgrade the biosecurity facilities and equipment, intelligent equipment, information platforms, and breeding pigs of 77 existing pig farms [2].

• Issuance targets: No more than 35 specific investors meeting the requirements of the China Securities Regulatory Commission
• Issuance volume: Calculated by dividing the total fundraising amount by the issue price determined in the final inquiry, and shall not exceed 30% of the company’s total share capital before issuance
• Change of control: This issuance will not result in a change of the company’s control

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According to the latest financial data, New Hope’s profitability is facing significant challenges [0]:

Financial Indicators	Value	Industry Comparison
P/E (Price-to-Earnings Ratio)	40.43x	Relatively High
ROE (Return on Equity)	4.19%	Relatively Low
Net Profit Margin	1.02%	Relatively Low
Operating Profit Margin	2.12%	Relatively Low

The Q3 2025 results show that the company’s EPS was $0.00, which was significantly lower than the expected $0.04, a decrease of

[0]. Although operating revenue exceeded expectations by 6.56%, the weak profitability reflects huge cost-side pressure.

Financial risk analysis shows that the company is at a

level [0]:

Indicator	2024	2023	2022
Asset-Liability Ratio	69.01%	72.28%	68.02%
Current Ratio	0.49	-	-
Quick Ratio	0.26	-	-

As of the end of Q3 2025, the company’s asset-liability ratio remains as high as

, with book monetary funds of RMB 7.419 billion, while short-term interest-bearing liabilities reach RMB 24.182 billion and long-term interest-bearing liabilities are RMB 31.968 billion, resulting in significant financial pressure [3].

The historical losses of New Hope’s pig farming segment are severe [3]:

Year	Losses from Pig Farming (RMB 100 million)
2021	111.5
2022	24.6
2023	53.0
2024	2.8
2025 First Three Quarters	1.8

Since October 2025, the company’s commercial pig price has fallen below RMB 12 per kg, dropping to

in December, while the full cost of fattened pigs sold in Q3 disclosed earlier was , indicating that the company has fallen into a loss-making state [3].

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Against the background of overcapacity and low pig prices in the current pig farming industry,

have become the core competitiveness for pig farming enterprises to survive. According to industry data, the break-even point of breeding costs fluctuates around RMB 14 per kg, while the current pig price is in the range of RMB 12-13 per kg, putting the entire industry in a loss-making state [4].

Wen’s Group reduced the comprehensive cost of pork pig farming to

in January-November 2025, and expects to further reduce it to around for the full year of 2026, mainly due to refined management and biosecurity measures [4].

The core investment direction of New Hope’s private placement — biosecurity prevention and control as well as digital and intelligent upgrades of pig farms — may bring the following benefits:

Type of Benefit	Specific Content	Expected Effect
Reduce Mortality and Culling Rate	Improve epidemic prevention facilities to reduce the occurrence of African swine fever and other diseases	Reduce pig losses caused by diseases
Improve Breeding Efficiency	Intelligent equipment enables precise feeding and environmental control	Increase PSY (Piglets Weaned per Sow per Year)
Optimize Breeding Pig Quality	Update and upgrade the breeding pig population to improve breeding performance	Improve survival rate and growth rate of piglets
Reduce Labor Costs	Automated and information-based management	Reduce labor demand and improve management efficiency

However, the project also faces certain challenges and uncertainties:

1. Large investment scale
   : The total investment of the project is as high as RMB 2.92 billion, with a long investment payback period [3]
2. Pressure from existing under-construction projects
   : As of the first half of 2025, the company still has 10 pig farm projects under construction on its books, with a total budget of RMB 2.815 billion [3]
3. Limited room for cost reduction
   : New Hope’s breeding cost is not significantly different from that of listed pig farming enterprises in the same industry, so there is limited room for further reduction in the short term [3]

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The current pig farming industry still faces the problem of overcapacity [4]:

• As of the end of October 2025, the national stock of productive sows was
  39.9 million heads
  , which is
  102.3%
  of the normal stock of 39 million heads
• In the first three quarters of 2025, the national pig slaughter volume increased by
  4.72%
  year-on-year
• The average weight of slaughtered pigs remains at a high level, about 127.13 kg, which is the highest in recent years

According to the requirements of the symposium held by the Ministry of Agriculture and Rural Affairs, 25 leading pig farming enterprises including New Hope need to gradually reduce the stock of productive sows by the end of January 2026, and the slaughter volume in 2026 will also be reduced to a certain extent [3]. This means that the industry is shifting from “scale expansion” to “refined operation”.

Enterprise	Full Breeding Cost (RMB per kg)	Competitive Advantage
Muyuan Foods	12.04 (2025 Average)	Cost leadership in the industry by RMB 2.46 per kg
Wen’s Group	11.8 (2026 Target)	Cost reduction through refined management
New Hope	12.9 (Q3)	Still needs to strive to catch up

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According to the DCF model analysis by Jinling AI [0]:

Scenario	Intrinsic Value	Premium/Discount to Current Price
Conservative Scenario	RMB 69.64	+687.8%
Neutral Scenario	RMB 97.41	+1001.9%
Optimistic Scenario	RMB 369.91	+4084.5%
Weighted Average	RMB 178.99	+1924.7%

It should be noted that DCF valuation is based on many assumptions, and the huge difference between the current stock price (RMB 8.84) and the valuation may reflect:

• Market concerns about the company’s profit prospects
• Downward pressure of the industry cycle
• Financial risks brought by high debt

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According to the latest technical analysis data [0][5]:

Indicator	Value	Technical Signal
Latest Closing Price	RMB 8.84	-
20-day Moving Average	RMB 9.16	Stock price is below the short-term moving average
50-day Moving Average	RMB 9.35	Stock price is below the medium-term moving average
200-day Moving Average	RMB 9.67	Stock price is below the long-term moving average (weak)
Annualized Volatility	12.69%	Medium volatility
Decline from 52-week High	-25.59%	At a relatively low level

It can be seen from the K-line chart that the stock price has been under continuous pressure recently. After the private placement announcement was released on January 12, the stock price did not show a significant upward reaction, indicating that the market’s attitude towards this private placement is relatively cautious [5].

: New Hope’s stock price showed a fluctuating downward trend from October 2025 to January 2026, and the stock price continued to run below the 20-day and 50-day moving averages, with relatively stable but weak trading volume. After the private placement announcement on January 12, the stock price was under obvious pressure.

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1. Private placement scale halved
   : Reduced from RMB 6.6 billion to RMB 3.338 billion, reflecting changes in the market financing environment and the company’s compromise to the capital market [1][2]
2. Fund usage focuses on core business
   : 70% of the funds are used for pig farm biosecurity upgrade, reflecting the company’s strategic intention of cost reduction and efficiency improvement, but it is difficult to reverse performance in the short term
3. Continuous financial pressure
   : High asset-liability ratio and losses in the pig farming business are still the main challenges faced by the company
4. Weak industry cycle
   : The pig farming industry is overall overcapacity, with pig prices running at a low level, and it is expected to achieve break-even in Q2 2026 [4]

Dimension	Evaluation	Explanation
Short-term	Neutral-Bearish	Low pig prices, private placement dilution, performance under pressure
Medium-term	Cautious Wait-and-See	Pay attention to the progress of cost reduction and pig price trend
Long-term	To Be Observed	Depends on the effect of biosecurity upgrade and industry cycle reversal

• Pig price fluctuation risk
  : Sustained low pig prices may lead to continued losses in the breeding business
• Epidemic risk
  : African swine fever and other diseases may still have a significant impact on the company
• Financial risk
  : High asset-liability ratio may bring liquidity pressure
• Private placement dilution risk
  : The issuance of new shares may have a dilutive effect on the rights and interests of existing shareholders
• Project execution risk
  : The implementation effect of the biosecurity upgrade project is uncertain

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: Among the funds raised in this private placement, RMB 2.338 billion (70%) will be used for biosecurity prevention and control as well as digital and intelligent upgrades of pig farms, and RMB 1 billion (30%) will be used for repayment of bank debts. The fund allocation reflects the company’s dual strategic goals of “upgrading stock assets and reducing liabilities”.

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[1] CLS - New Hope Plans to Raise No More Than RMB 3.338 Billion Through Private Placement (https://www.cls.cn/detail/2255182)

[2] China Feed Network - New Hope Raises RMB 3.3 Billion for Pig Farm Upgrade and Debt Repayment (http://www.chinafeedm.com/h-nd-30824.html)

[3] Sina Finance - Pig Prices Break 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)

[4] Sina Finance - Supply-Demand Imbalance in Pig Farming Industry; Full Industry Chain Layout Becomes the Key (https://finance.sina.com.cn/jjxw/2026-01-10/doc-inhfueta9986465.shtml)

[5] Jinling API - Market Data and Technical Analysis

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: January 19, 2026
: Jinling AI Financial Research Department