Muyuan shares H126 suffered huge losses, the bottom of the pig cycle was confirmed, and the leader is expected to be the first to benefit from the industry reversal (UBS)
A UBS report pointed out that Muyuan's performance forecast for the first half of 2026 was a huge loss of 5.7 billion to 6.7 billion yuan, in line with its expectations.
A UBS report pointed out that Muyuan's performance forecast for the first half of 2026 was a huge loss of 5.7 billion to 6.7 billion yuan, in line with its expectations. The main reason for the loss was that the price of pigs fell 33% year-on-year to 9.7 yuan/kg, which completely offset the benefits of lower costs. As the industry leader, the company's production costs have dropped to 11.6-11.7 yuan/kg, and the number of fertile sows at the end of the period fell by 9.3% year-on-year, showing the industry's decentralization trend. One-sentence conclusion: Muyuan's huge losses confirm the bottom of the industry's prosperity, and its excellent cost control capabilities and production capacity clearance have created flexible space for the next round of pig cycle upside. Positive/negative: Positive for Muyuan Holdings (2714.HK) and the leader in low-cost pig breeding. The current huge loss performance has been fully expected by the market (price in), and the core lies in the rhythm and magnitude of future pig price reversal. Catalysts: 1) The signal that the industry’s pig prices have bottomed out; 2) The number of breeding sows in the industry has further reduced data; 3) The trend of changes in feed costs.