ST Longda has terminated 2 pig farming projects with combined annual capacity of 1.16 million hogs, citing tight cash flow, weaker operating performance, and industry-wide capacity restructuring. Most construction has already been completed and capitalised, but the company will redirect about CNY 440 million (USD 61.28 million) in remaining raised funds permanently to working capital. The decision follows Longda’s earlier abandonment of another planned acquisition involving about 900,000 hogs of annual capacity.
Chinese meat company ST Longda has decided to terminate 2 pig farming projects designed to add annual capacity for 1.16 million market hogs, nearly 4 years after their originally scheduled completion. Most of the construction work, however, has already been completed and capitalised.
The company recently announced that its board had approved terminating investment projects funded by proceeds from a 2020 public issuance of convertible bonds and a 2021 private share placement. The remaining proceeds will instead be used permanently to supplement working capital.
The 2 projects were a new operation in Shibuzi Town, Anqiu, designed for 500,000 market hogs per year, and another new farm project in Shandong with annual capacity for 660,000 hogs.
Longda had planned to invest CNY 665 million (USD 92.62 million) and CNY 425 million (USD 59.19 million), respectively, from the fundraising proceeds.
Both projects were originally scheduled to start production in the second half of 2022. In October 2025, Longda extended the deadline until the end of August 2026.
At the time, the company said a reassessment had concluded that both projects remained necessary and feasible. Longda has annual hog slaughtering capacity of 15 million head, while its own hog output amounted to only 382,400 head in 2024. The company therefore expected the additional production capacity to be absorbed once the projects were completed.
Progress remained limited over the following year. Longda’s operating performance had declined significantly since 2021, leaving operating cash flow generally tight. More recently, a creditor also applied for court-supervised restructuring of the company.
According to the latest announcement, the 500,000-head project has so far used CNY 301 million (USD 41.92 million) of raised funds, while the 660,000-head project has used CNY 358 million (USD 49.86 million).
About CNY 440 million (USD 61.28 million), including interest, remained from the 2 projects. That money had already been temporarily redirected to working capital, mainly to pay for live hog purchases and prepared-food purchases.
At the end of the first quarter of 2026, Longda had only CNY 230 million (USD 32.03 million) in monetary funds. It also faced priority repayment of several hundred million CNY in outstanding convertible bonds that had not been converted into shares.
Against that background, Longda has now changed the use of the remaining fundraising proceeds from a temporary to a permanent supplement to working capital.
The decision does not mean that construction had barely started.
For the Shandong project designed for 660,000 hogs per year, all construction had been completed and transferred to fixed assets by the end of 2024. At present, only biological assets and a small amount of supporting facilities remain to be put in place.
The 500,000-head project in Shibuzi Town had been partially completed and transferred to fixed assets by the end of 2024. Some construction work remains to be completed, while biological assets and supporting facilities have yet to be put in place.
Explaining the termination, Longda said it is adjusting to its own operating conditions as well as a period of deep capacity restructuring across the industry. The company is therefore slowing its capacity expansion and shifting its focus towards safeguarding operating cash flow and improving the quality and efficiency of pig farms already in production.
The move follows another retreat from pig production expansion.
In October 2025, Longda abandoned its proposed acquisition of Wucang Nongmu Group Co., Ltd. from its controlling shareholder, Lanrun Development Holding Group Co., Ltd. The target company has annual hog production capacity of approximately 900,000 head.
Longda said the decision reflected uncertainty in the industry cycle, insufficient funds to complete an acquisition, and the target company’s excessively high debt-to-asset ratio.
The assets had originally been required to be injected into Longda by the end of 2025 to avoid competition between the listed company and its controlling shareholder.
After that transaction failed, Lanrun was required to transfer its stake in Wucang Nongmu to an unrelated third party. No buyer has taken over the assets, however, and Wucang Nongmu remains under Longda’s management.
For that arrangement, the listed company receives a fixed annual management fee of CNY 100,000 (USD 13,927.58).
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