Hunan New Wellful Co Ltd

New Wellful released its 2026 interim report. Total operating revenue was 2.833 billion yuan, down 23.18% year-on-year. Net profit attributable to the parent company was negative 736 million yuan, swinging from profit to loss year-on-year, a decline of 1,727.34%. Net cash flow from operating activities was negative 346 million yuan, down 157.15% year-on-year. The company's asset-liability ratio rose to 84.17%, gross margin was negative 5.37%, ROE was negative 51.57%, and diluted earnings per share was negative 0.59 yuan. The number of shareholders was 64,200, and the top ten shareholders held 50.82% of total share capital.

Tiankang Bio plans to terminate the project for a 300,000-piglet breeding and 200,000-hog fattening base, which was part of its non-public share issuance fundraising investment projects, and will permanently use the remaining raised funds and interest of 324 million yuan to supplement working capital. The company said that due to persistently low hog prices and widespread industry losses, continuing the project would be difficult to achieve expectations. To implement the Comprehensive Regulation Plan for Hog Production Capacity in 2026 and improve capital efficiency, it decided to terminate the project. In the first half of this year, Tiankang Bio marketed 1.8484 million hogs, up 20.95 percent year on year, but the average hog selling price fell 42.33 percent year on year. The company achieved operating revenue of 8.325 billion yuan, down 5.89 percent year on year, and net profit attributable to shareholders of the listed company was negative 441 million yuan, swinging from profit to loss year on year. The company plans to market 4.75 million hogs this year, including 3.15 million from Tiankang and 1.6 million from Qiangdu Animal Husbandry. Notably, Tiankang Bio is not the only company adjusting capacity. This year, several listed pig producers, including Shennong Group, Xinwufeng, and ST Longda, have announced suspension or termination of hog farming projects. Data show that at the end of the second quarter, the national breeding sow herd was 37.8 million head, down 6.5 percent year on year and down 3.18 percent from the previous quarter, leaving only a 300,000-head gap from the normal stock target of 37.5 million head set by the Ministry of Agriculture and Rural Affairs.

Hog prices continue to run at low levels, and multiple listed pig companies plan to suspend new farm construction projects. Shennong Group announced it intends to suspend construction of the Longmen pig farm project of Guangxi Daxin Shennong Agriculture Company Limited, which originally planned an investment of 120 million yuan, aimed at implementing hog production capacity control targets. Earlier, New Wellful terminated the construction project of a 2,400-head sire line pig farm in Yangjiadu Village, Huitong County, by Hunan Tianxin Breeding Company Limited in May. ST Longda announced on July 22 the termination of two hog breeding investment projects, scaling back capacity expansion and shifting focus to safeguarding cash flow and improving quality and efficiency at already operational pig farms.

Shennong Group announced the suspension of the Longmen pig farm project, which was designed to produce 180,000 high-quality piglets annually, in order to implement hog production capacity control targets. The total investment for the project was 120 million yuan, and it was approved by the board of directors in June 2025. The company stated that the suspension is a prudent decision made in consideration of regulatory policies, market conditions, and its own business strategy, and will not adversely affect operations. Shennong Group has seen rapid capacity growth in recent years, with slaughter volumes rising from 652,700 head in 2021 to 3,074,200 head in 2025. However, the average selling price of commercial hogs in the first half of the year was about 9.9 yuan per kilogram, a year-on-year decline of approximately 32 percent, leading to an estimated net loss attributable to shareholders of between 720 million and 880 million yuan. Previously, New Wufeng and ST Longda also terminated some pig farm construction projects. The national sow herd inventory fell to 37.8 million head at the end of the second quarter, just 300,000 head above the normal retention target of 37.5 million head.

New Wufeng disclosed its earnings forecast, expecting a net loss attributable to shareholders of 600 million to 800 million yuan in the first half of 2026, compared with a profit of 45.2344 million yuan in the same period last year. The net loss after deducting non-recurring items is expected to be 610 million to 810 million yuan, versus a profit of 42.4473 million yuan a year earlier. The company said the loss was mainly due to a significant decline in live pig prices during the reporting period compared with the same period last year. Based on the latest closing price, the company's price-to-book ratio is about 3.57 times, and its price-to-sales ratio is about 0.92 times.

On July 8, the livestock farming sector fell 2.23% during the session, with constituents such as New Hope, Giant Star Animal Husbandry, and Tianbang Food broadly declining. According to China Business News, hog prices have recently rebounded strongly, with the national average price of live hogs climbing from 9.47 yuan per kilogram on June 26 to 11.06 yuan per kilogram on July 6, crossing back above the 10 yuan threshold after four months. An announcement from Tianyu Bio showed that in June 2026 the company sold 62,400 live hogs, generating sales revenue of 51.7718 million yuan, a year-on-year increase of 38.12%. A research note from Huaan Securities pointed out that the hog industry continued to suffer deep losses in 2026, and as capacity regulation policies are gradually implemented, the pace of capacity reduction is expected to accelerate.