Subsidiary involved in pig farming reports a net loss of 1.29B yuan; is Guangming Meat Industry's performance dragged down, turning it into a loss?

Ask AI · How does Hebei Zhongwang’s litigation involvement worsen Guangming Meat’s loss situation?

Pig prices continue to decline, leading to significant losses in Guangming Meat’s pig farming segment. In 2025, the company’s net profit attributable to shareholders turned from profit to loss, recording -132 million yuan, a year-on-year decrease of 161.30%.

Investment Time Network, Punctuation Finance researcher Lü Gong

Data from China Swine Industry Network shows that pig prices have generally declined since 2025. Taking external three-way crossbred pigs as an example, from January to early February 2025, live pig prices hovered around 15 yuan/kg and 16 yuan/kg. Afterward, prices gradually fell, reaching around 11 yuan/kg and 12 yuan/kg in October, November, and December. As of December 31, 2025, the price of external three-way crossbred pigs was 12.4 yuan/kg, down 3 to 4 yuan per kilogram from the beginning of the year.

Under this trend, many companies in the industry are under performance pressure. Investment Time Network and Punctuation Finance researcher noted that Shanghai Guangming Meat Group Co., Ltd. (hereinafter Guangming Meat, 600073.SH), involved in pig farming, has also been affected to some extent. According to the latest annual report disclosed on March 30, 2026, Guangming Meat’s total revenue for 2025 increased slightly by 0.65% to 22.13 billion yuan, but net profit attributable to shareholders plummeted by 161.30% compared to the previous year, turning from profit to loss, with a net loss of 132 million yuan.

Pig (external three-way crossbred) price trend since 2025

This image is AI-generated

Data source: Swine Treasure

Guangming Meat’s core business segments are meat products and branded food. The meat segment includes pork and beef/lamb, involving breeding, slaughtering and distribution, and deep processing and distribution of meat products. From a business structure perspective, in 2025, the beef and lamb segment remained the company’s main revenue pillar, bringing in 13.04 billion yuan, a 10.90% increase year-on-year, accounting for 58.93% of total revenue, with a gross profit margin increased by 1.25 percentage points compared to the previous year. Revenue and gross profit margin from pig slaughtering, deep processing, and distribution also grew, with respective year-on-year increases of 3.32% and 0.91 percentage points, accounting for about 20% of total revenue.

However, in 2025, affected by low pig prices and impairment provisions, Guangming Meat’s pig farming business suffered increased overall losses. Revenue in this segment declined by 20.66% to 1.51B yuan, and gross profit margin decreased by 13.98 percentage points from the previous year, turning negative to -10.82%.

First, let’s look at the impact of impairment provisions. Testing shows that in 2025, Guangming Meat recorded a total impairment provision of 906 million yuan, including inventory write-downs and long-term asset impairments, which will reduce the company’s net profit attributable to shareholders for the year by 474 million yuan.

Among them, Guangming Meat’s subsidiary Hebei Zhongwang Agricultural Technology Co., Ltd. (hereinafter Hebei Zhongwang), involved in litigation, has signs of impairment in some long-term assets. As a result, Guangming Meat previously recognized impairment provisions of 266 million yuan for its fixed assets. This will reduce the company’s net profit attributable to shareholders for 2025 by 128 million yuan.

Hebei Zhongwang is a controlling subsidiary of Guangming Meat, mainly engaged in pig breeding, breeding pig production, and related technical development and promotion services. In August 2025, it received court judgments and enforcement rulings. At that time, due to multiple litigation disputes, assets such as pig pens, fences, and feed towers at Hebei Zhongwang’s pig farms were seized by the court.

2025 Main Business Segments of Guangming Meat

Data source: Company financial reports

Guangming Meat’s pig farming business is mainly operated by its subsidiary Guangming Agriculture and Animal Husbandry. In 2025, this subsidiary recorded a net loss of 1.29B yuan. Recently, on investor interaction platforms, some investors questioned the company’s recent performance drag caused by this subsidiary.

In response, Guangming Meat stated that in 2025, the company promoted cost reduction and efficiency improvement in pig farming, with breeding costs decreasing year-on-year. However, due to a significant drop in pig sales prices, the pig farming segment suffered large losses. In 2026, the company plans to continue cost control by shutting down inefficient farms, improving standardized breeding, and promoting lean farming, to improve performance.

Recently, the National Swine Industry Technology System, in its report “Review of China’s Swine Industry Situation in 2025, Existing Problems, and Future Outlook,” pointed out that industry consensus is that, with economic recovery, residents’ income levels and consumer confidence are rising, coupled with a series of consumption stimulus policies, pork demand in 2026 is expected to see a moderate rebound. However, at the same time, the aging trend continues, and the diversified consumption of beef, lamb, and poultry will persist, somewhat constraining pork consumption growth. Overall, pork demand in 2026 may see a modest increase, but the room for growth is limited.

According to the latest data monitored jointly by the Ministry of Agriculture and Rural Affairs Information Center and Shandong Zhuochuang Information Co., Ltd., in the 12th week of 2026 (March 16-20, 2026), the weekly average index of ex-factory prices for lean pork in 16 provinces (municipalities) was 13.37 yuan/kg, down 1.9% and 30.6% respectively from the previous week and the same period last year, with the decline compared to last week widening by 1.5 percentage points.

Regarding this pig price trend, several listed companies in the industry have recently responded. New Hope (000876.SZ) said that the decline in pig prices does pose pressure, but the company has prepared funds from all aspects and will continue to improve production management and reduce breeding costs. Muyuan Foods (002714.SZ, 2714.HK) stated it will enhance production efficiency, lower breeding costs, and invest in technological innovations across all stages of pig breeding, including breeding, nutrition research, and disease prevention, to maximize each pig’s growth potential. Wen’s Shares (300498.SZ) also said it is prepared for the prolonged low pig prices and is confident and capable of successfully navigating this downturn cycle to achieve new development.

Under the current industry situation, how Guangming Meat will respond to pig price trends, and the specific measures and effectiveness of its pig farming improvement initiatives, may directly impact the company’s overall performance recovery.

Author’s note: Personal opinions, for reference only.