On September 28, New Hope Liuhe announced plans to conduct hedging operations during 2026-2027, covering live hogs, feed ingredients, and interest rate risk management, with maximum margin occupation not exceeding RMB 3.3 billion.
As the hog cycle continues to bottom out, breeding enterprises seeking stable operations during the downturn are finding that beyond cost control capabilities, risk management through futures hedging is transitioning from a "bonus point" to a "survival necessity."
Haid Group's 2026 hedging scale reaches up to RMB 8 billion, Muyuan Foods at approximately RMB 7.8 billion, Wens Foodstuff at approximately RMB 100 million, and Dabeinong at approximately RMB 400 million.
New Hope Plans RMB 3.3 Billion for Hedging Operations
On September 28, New Hope Liuhe Co.,Ltd. (SZ: 000876) issued an announcement stating that the company has passed relevant board resolutions and plans to conduct hedging operations during 2026-2027, with maximum margin occupation not exceeding RMB 3.3 billion, to hedge price fluctuation risks related to its main business commodities and manage financing cost pressures arising from interest rate fluctuations. The relevant proposal still requires submission to a subsequent shareholders' meeting for review.
According to the announcement, New Hope Liuhe Co.,Ltd. (SZ: 000876) is primarily engaged in the production and sale of live hogs, feed, and other products. In recent years, due to supply-demand relationships and the macroeconomic environment, prices of core products and raw materials such as live hogs, soybean meal, and corn have experienced significant fluctuations. Combined with comprehensive financing cost pressures from rising market interest rates, the company plans to match its monthly slaughter plans and raw material procurement cycles, utilizing futures and options tools of corresponding periods and scales for risk hedging. This operation does not involve speculative trading and will not affect the normal conduct of the main business.
The core parameters of this hedging operation are as follows: The proposal has previously passed review at the second meeting of the 2026 Risk Control Committee of the Tenth Board of Directors held on September 21, 2026, and the twenty-first meeting of the Tenth Board of Directors held on September 24, 2026. The board has also requested the shareholders' meeting to authorize management to exercise investment decision-making authority within the above quota and sign relevant legal documents.
Regarding the risk issues of hedging operations that the market widely关注, New Hope Liuhe Co.,Ltd. (SZ: 000876) noted in the announcement that although this operation takes risk hedging as its core purpose, it may still face five types of risks: market prediction deviations, relevant policy changes, insufficient market liquidity, operational errors, and trading system failures.
In response, the company has established a multi-level risk prevention and control system: First, strictly implement the separation of decision-making, analysis, trading, risk control, and delivery positions to eliminate speculative trading space through institutional mechanisms. Second, it has formulated a comprehensive "Hedging Business Management System," clarifying full-process approval and risk control rules, and has equipped a professional execution team including industry researchers, risk control managers, traders, and financial accountants. Meanwhile, the company will strictly follow hedging accounting standards, calculate margin occupation scale and fund risk levels in real time, and take control measures to reduce margin ratios immediately upon any abnormalities, ensuring related losses remain within the company's tolerable range.
The verification opinion issued by the company's sponsor institution China Merchants Securities shows that this hedging operation takes serving normal production and operations as its core objective, and the relevant decision-making processes comply with the requirements of standardized operation of Shenzhen Stock Exchange main board listed companies. There is no circumstance that damages the interests of the listed company and all shareholders, and the sponsor institution has no objection to this matter.
The company stated that after this operation is implemented, it will further enhance the company's overall operational risk resistance, strengthen financial stability, and provide a more solid risk buffer for the stable operation of the live hog and feed main businesses.
Hedging Becomes a "Survival Necessity" for Enterprises
As the hog cycle continues to bottom out, breeding enterprises seeking stable operations during the downturn are finding that beyond cost control capabilities, risk management through futures hedging is transitioning from a "bonus point" to a "survival necessity."
Data shows that as of April 2026, funds deposited in the domestic live hog futures market reached RMB 13.34 billion, with hedging coverage rising from less than 10% in early stages to an average of over 30% among leading enterprises.
Typical representative enterprises conducting hedging operations include: Guangdong Haid Group Co.,Limited (SZ: 002311) hedging scale: up to RMB 8 billion in 2026 (including RMB 4 billion in commodity futures hedging and RMB 4 billion in foreign exchange hedging), the highest level in the industry. Hedging results: In the first quarter of 2026, net income was approximately RMB 290 million, effectively smoothing performance fluctuations.
Muyuan Foods Group Co.,Ltd. (SZ: 002714) hedging scale: approximately RMB 7.8 billion in 2026 (including RMB 800 million in commodity futures hedging and RMB 7 billion in financial derivatives trading). Results: In the first quarter of 2026, net income was approximately RMB 2.48 million, effectively hedging price decline risks and locking in some forward profits.
Wens Foodstuff Group hedging scale: approximately RMB 100 million in 2026 (mainly foreign exchange hedging, partial commodity hedging). Results: In the first quarter of 2026, income was approximately RMB 497,900, with relatively limited results, missing some hedging opportunities.
Dabeinong hedging scale: approximately RMB 400 million in 2026, with hedging accounting for 30%-40% of slaughter volume. Results: In the first quarter of 2026, income was approximately RMB 152 million, providing key support to the income statement and effectively offsetting spot losses.
Dekang Farming hedging scale: normalized live hog futures hedging. Results: In the first half of 2026, income reached RMB 497 million, with significant hedging results, effectively offsetting cyclical bottom losses.
If hog enterprise hedging was merely a "trial" before, then this year, hedging has moved from a footnote in financial statements to the front page of business strategy. Leading hog enterprises are upgrading hedging from an "auxiliary tool" to a "strategic capability" to address operational risks and seek to safely navigate the dark hog cycle.
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