From Cycles to Value: Muyuan's Spectacular Turnaround

Ask AI · How does the slaughtering business become a key engine for Muyuan’s value transformation?

Text | Xiao Li Feidao

On March 27, Muyuan Co., Ltd. announced its full-year 2025 results, achieving a net profit of 15.8 billion yuan, once again confirming the company’s ability to navigate cycles.

This is inseparable from the cost “moat” built through technological innovation over the years. In addition, the slaughtering meat business’s “second growth curve” is gaining momentum, further driving the company’s transformation from a cyclical stock to a value stock, and its importance cannot be underestimated.

【Resilience in Operations Reappears】

In 2025, Muyuan’s revenue was 144.15B yuan, up 4.5% year-on-year, setting a new annual record high, with net profit attributable to the parent of 15.49B yuan, while many pig companies again fell into losses.

It should be noted that the average live pig price for the year was 14.4 yuan/kg, hitting a new low since 2019, but Muyuan still demonstrated strong operational resilience.

Muyuan’s greatest core competitive advantage over peers stems from its cost advantage in breeding. In 2025, the company’s total cost was about 12 yuan/kg, a 14.3% decrease year-on-year, higher than the pig price decline during the same period. This not only achieved the target set at the beginning of the year but also led the industry average by about 20%.

▲Muyuan’s cost advantage, source: Yifan compilation

Over the years, Muyuan has continuously innovated in 20 major areas including breeding, feed, health, farming, and housing, constantly improving pig efficiency, material efficiency, and labor efficiency, with remarkable breeding results. From 2023 to 2025, the company’s total pig-raising costs have decreased by 3.7 yuan cumulatively, with a projected target of around 11.5 yuan/kg in 2026.

Against the backdrop of sustained profit recovery, the company’s operating cash inflow has exceeded 30 billion yuan for two consecutive years, debt levels have continued to decline, and financial structure has become healthier. Total liabilities decreased by 17.1 billion yuan for the year, surpassing the target. The company’s latest asset-liability ratio is 54.15%, a significant drop of nearly 8 percentage points from the 2023 peak, returning to a safe and stable level.

In addition, Muyuan’s latest bank credit and various financing channels are ample, combined with a cash cost significantly lower than the total cost by 2 yuan/kg, ensuring ample and stable cash flow to calmly respond to future low pig price cycles.

With a stronger cash flow creation ability, Muyuan has a solid foundation for high dividends. In 2025, Muyuan is expected to distribute an additional 2.44B yuan in dividends, and with the semi-annual dividend already paid, the total for the year will reach 7.44B yuan, with a dividend payout ratio of 48%, fulfilling previous commitments and sharing the company’s growth achievements with small and medium investors.

【Slaughtering Becomes a New Growth Pole】

Among the operational results of 2025, the strong growth of Muyuan’s slaughtering meat business stands out.

For the full year, this business generated revenue of 45.23 billion yuan, a significant increase of 86.3% year-on-year, and achieved profitability for the first time, marking a fundamental shift from cultivation to profit contribution.

Muyuan’s entry into the slaughtering business began in 2019, aligning with the national policy shift from “transporting pigs” to “transporting meat.” By the end of 2020, Muyuan had commissioned its first slaughterhouse in Neixiang, entering the formal operation stage. Subsequently, the company built multiple slaughterhouses supporting its main breeding regions, with increasing capacity. By the end of 2025, the business covered 20 provinces and cities nationwide, with over 70 sales branches.

From 2020 to 2025, the revenue from slaughtering increased over 70 times in six years, with the highest compound annual growth rate among large Chinese industry peers. Its share of total revenue also increased significantly, and by 2025, it had become a core segment contributing nearly one-third of the company’s revenue, with the second growth level of value beginning to materialize.

▲Muyuan’s slaughtering revenue changes, source: Market Value Observation compilation

Looking ahead, Muyuan’s slaughtering meat business still has good growth potential.

In 2025, the company’s