New Hope Liuhe has reversed previous losses and forecasts strong profits for Q1 2025, potentially surpassing its entire 2024 earnings. This turnaround is driven by streamlined pig production, enhanced biosecurity, and withdrawal from non-core operations. While revenue dipped due to divestitures, profitability improved significantly. Core segments such as feed production and hog farming remain solid, with notable improvements in cost efficiency and productivity.
After several turbulent years marked by losses and divestitures, New Hope Liuhe, one of China’s leading agribusinesses, is poised for a comeback. The company announced on April 2 that its net profit for the first quarter of 2025 is expected to reach between CNY 430 million and CNY 500 million (~ USD 59.20–68.80 million). Remarkably, this could exceed its entire net profit of CNY 474 million (~ USD 65.30 million) for the full year of 2024.
The rebound is particularly striking when contrasted with the first quarter of 2024, during which the company reported a loss of CNY 1.93 billion (~ USD 266.10 million). The key to this dramatic reversal lies in a combination of tightened production management, strategic realignment, and a significant reduction in costs, especially within its core hog business.
Biosecurity Upgrades Drive Cost Efficiency
Central to New Hope’s transformation is a large-scale overhaul of its pig farming operations. In 2024, the company completed biosecurity renovations across multiple production sites, reinforcing its resilience against disease outbreaks such as African Swine Fever (ASF). Alongside improvements in winter-spring vaccination protocols and tighter production controls, these efforts have led to a year-on-year and sequential decline in hog farming costs during the first quarter of 2025.
The company has yet to release March 2025 sales data, but in the first two months of the year alone, it sold nearly 2.64 million pigs, generating revenue exceeding CNY 3.7 billion (~ USD 510.20 million).
Return to Core Business Amid Structural Realignment
New Hope’s resurgence follows a broader strategic retreat from non-core operations. The company’s full-year earnings report for 2024 showed revenues of CNY 103.06 billion (~ USD 14.17 billion), a 27.27% decline compared to 2023. This contraction was largely due to the divestiture of its poultry and food processing businesses in late 2023.
Despite the drop in revenue, net profit attributable to shareholders increased by 90.05%, highlighting the success of its cost control initiatives and a recovery in pork prices beginning in the second quarter of 2024.
Feed Business Remains a Pillar
In 2024, New Hope’s feed segment remained a cornerstone of its operations, with total annual sales of 25.96 million tonnes. This includes 21.21 million tonnes in external sales, broken down into 14.72 million tonnes of poultry feed, 4.22 million tonnes of swine feed, 1.69 million tonnes of aquatic feed, and 0.57 million tonnes of ruminant and specialty feeds.
While this represents a decline from 28.76 million tonnes in 2023, the company’s overseas feed sales reached 5.25 million tonnes, solidifying its position as a leader among Chinese feed exporters. This international foothold is seen as crucial to future growth, as it provides a buffer against domestic market volatility.
Solid Performance Metrics in Hog Production
In 2024, New Hope’s hog output reached 16.52 million head, with 2.78 million pigs processed through its slaughtering operations. Notably, in the fourth quarter, the company reported a weaning cost of just CNY 263 (~ USD 36.20) per piglet, a pre-weaning productivity rate (PSY) of 25.1 piglets per sow per year, and a finishing phase survival rate of 93%. The all-in production cost for market hogs dropped to CNY 13.60 (~ USD 1.87) per kilogram.
New Hope attributed these gains to the completion of its biosecurity retrofits, along with gradual restocking and a disciplined recovery strategy that synchronizes internal capacity with external market signals.
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