Domestic pork industry leader Muyuan Foods Co.,Ltd. (referred to as "Muyuan Foods") submitted an updated H-share listing application to the Hong Kong Stock Exchange on November 28, with joint sponsors Morgan Stanley, CITIC Securities, and Goldman Sachs. This marks the company's renewed attempt to list in Hong Kong after its initial application expired in May this year.
Under Hong Kong listing rules, a prospectus automatically expires if no hearing is completed within six months. Muyuan Foods' first application lapsed on November 27, and the company promptly resubmitted the next day, highlighting its urgency for a Hong Kong listing. Company Secretary Qin Jun previously stated that "completing the issuance itself is more important than the financing scale," emphasizing that the primary goal of the Hong Kong IPO is to enhance global market "credibility." Muyuan Foods has been listed on the Shenzhen Stock Exchange since 2014, closing at 50.75 yuan on November 28 with a market capitalization of 277.2 billion yuan.
International expansion is a key strategic focus for Muyuan Foods' listing. In September, the company established a wholly-owned subsidiary in Vietnam and partnered with BAF Vietnam Agriculture JSC to invest 3.2 billion yuan in a high-tech pig farming project in Tay Ninh Province, Vietnam. Upon completion, the facility will house 64,000 sows and produce 1.6 million market hogs annually, marking a shift from technology exports to physical farming overseas. Additionally, in August, Muyuan Foods signed a strategic cooperation agreement with CP Group to explore global synergies in feed and slaughtering sectors.
Financially, Muyuan Foods delivered strong performance in the first three quarters of 2025, with revenue exceeding 100 billion yuan at 111.79 billion yuan, up 15.52% year-on-year, and net profit reaching 14.78 billion yuan, a 41.01% increase. This was driven by continuous cost control, with the complete farming cost per kilogram dropping from 13.1 yuan at the start of the year to 11.6 yuan in September. Key production metrics, such as the survival rate from weaning to market, reached 93%, while PSY (pigs weaned per sow per year) stood at around 29. However, third-quarter results were pressured, with revenue declining 11.48% year-on-year to 35.33 billion yuan and net profit falling 56% to 4.25 billion yuan, mainly due to weak pork prices in the industry.
Downstream expansion has become a new growth driver. The slaughtering business, launched only in 2019, has grown rapidly, with slaughter volume reaching 19.16 million heads in the first three quarters, up 140% year-on-year, and capacity utilization at 88%. The third quarter alone saw 7.75 million heads slaughtered, achieving a quarterly profit of approximately 32 million yuan for the first time. Interim reports show that slaughtering and fresh meat operations now account for 25.3% of revenue, though gross margins remain low at 2.10%, indicating ongoing scale expansion. Qin Jun revealed plans to gradually add slaughtering capacity, launching one to two new plants annually.
Despite its strengths, Muyuan Foods faces multiple challenges. Industry-wide, China's sow inventory stands at 40.35 million, 3.5% above normal levels, while pork consumption is projected to decline by an average of 0.5% annually by 2033. In capital markets, valuation discrepancies were a core reason for the first IPO's expiration, with brokerages offering widely varying 2025 net profit forecasts—Open Source Securities predicts 16.39 billion yuan, while Huaxin Securities estimates 20.24 billion yuan, implying a P/E ratio of 14-16x. Financially, although total liabilities decreased by 9.8 billion yuan from the start of the year to 55.50% of assets, the company's 100-billion-yuan debt level remains a concern.
Looking ahead, pork prices may see a moderate recovery in the fourth quarter, traditionally a peak consumption season. Muyuan Foods aims to boost its global influence through the Hong Kong listing while leveraging cost advantages and vertical integration to mitigate industry cyclicality. However, whether it can secure favorable valuations in Hong Kong remains to be seen.
Comments