On 10 month 22, Wens Foodstuff Group disclosed its third-quarter financial report. The figures show that in the first three quarters of this year, the company recorded a net loss of 49.61 hundred million yuan, a sharp “shrinkage” of about 102 hundred million yuan compared with a profit of 52.26 hundred million yuan in the same period last year. Amid a prolonged period of losses in pig farming, Wens Foodstuff Group’s debt ratio rose to 59.15% at the end of the third quarter, and its cash flow also turned negative. As one of the major pig-farming companies, Wens Foodstuff Group’s financial report reflects the widespread difficulties facing the hog industry.
Wens Foodstuff Group Co., Ltd. posted a loss of nearly 50 yuan in the first three quarters, with its quarterly loss narrowing by 27 yuan.
On 10 month 22 day, Wens Foodstuff Group Co., Ltd. issued an announcement formally disclosing its third-quarter financial results.
The latest financial report shows that in the first three quarters of this year, the company recorded operating revenue of 721.97 hundred million yuan, down 4.74% year on year; attributable net profit totaled a loss of 49.61 hundred million yuan, approaching 50 hundred million yuan, a sharp year-on-year drop of 194.4%. In the same period last year, the company had still posted a substantial profit of 52.26 hundred million yuan, while this year its net profit shrank by nearly 102 hundred million yuan.
Looking at the quarterly data, most of the profit losses occurred in the first half of the year, especially in the second quarter, when pig prices fell below historical lows. In the first half of this year, Wens Foodstuff Group Co., Ltd. recorded net losses of 10.70 yuan and 32.96 yuan in the first and second quarters, respectively, for a combined loss of 43.66 yuan. Its loss for the third quarter alone was 5.96 yuan, narrowing by about 27 yuan compared with the second quarter.
The narrowing of the quarterly loss was partly due to an overall recovery in hog prices in the third quarter. According to monitoring statistics from Pig Farm Power Network, the national average price of three-way crossbred live pigs was about 9.42 yuan/kg in the second quarter of this year and about 10.70 yuan/kg in the third quarter, an increase of nearly 1.3 yuan/kg for the quarter. Accordingly, Wen's Foodstuff Group's average selling price also rose from 9.27 yuan/kg in 4 to 10.80, 10.86, and 10.75 yuan/kg in 7, 8, and 9, respectively.
On the other hand, prices for products from Wens Foodstuff Group’s other main business, chicken farming, have rebounded. From 7 to 9, the average selling price of broiler chickens rose from 11.49 yuan per kilogram to 14.20 yuan per kilogram, while monthly sales revenue from broiler chickens increased from 27.21 hundred million yuan to 37.31 hundred million yuan. In the first three quarters, the company’s cumulative sales revenue from broiler chickens was 260.01 hundred million yuan.
The debt ratio rose to 59.15%, and operating cash flow turned negative
As the prolonged period of losses continued, the company’s operating cash flow also came under pressure. At the end of the third quarter, Wen’s Foodstuff Group’s asset-liability ratio rose from 49.82% at the end of the previous year to 59.15%. In the first three quarters, net cash flow from operating activities was -4893.81 ten thousand yuan, compared with 81.99 hundred million yuan in the same period of the previous year. The company explained that this was mainly due to year-on-year declines in live hog prices and increases in raw material prices.
To navigate the industry downturn, Wen's Food Group increased its commercial bank borrowings and built up its cash reserves. At the end of the third quarter, the company's short-term borrowings increased from 7455.52 ten thousand yuan at the end of the previous year to 46.33 hundred million yuan, while long-term borrowings increased from 8.80 hundred million yuan to 74.83 hundred million yuan.
Additionally, at the end of the third quarter, Wens's monetary funds amounted to 27.51 billion yuan, an increase of 171.44% compared with the end of the previous year. In the first three quarters, the company's net cash flow from financing activities was 58.66 billion yuan.
Leading pig farming companies are adjusting production capacity, while current supply remains relatively ample.
Entering month 10, hog prices came under pressure again. Data from Shengyishe show that on 22 of month 10, the benchmark price for live pigs was 9.87 yuan per kilogram, down 3.24% from 10.20 yuan per kilogram at the beginning of the month. Against the backdrop of low prices, leading pig farming companies such as Muyuan, Wen's, and New Hope are taking action by reducing the number of breeding sows, eliminating inefficient capacity, and adjusting sales schedules.
Wens Foodstuff Group's financial report data shows that productive biological assets decreased by 8.76% year over year, indicating that it is proactively culling sows. On 8 month 3, the company replied on its investor interaction platform that its capacity adjustments involved both its breeding herd and pig farms. It also stated that it would maintain balanced sales of market hogs as planned and strictly control the sales destinations of commercial pigs, not selling them to customers for secondary fattening.
Muyuan Foods’ sales brief shows that the company’s breeding sow inventory fell from a peak of 362 ten thousand head to 297.4 ten thousand head at the end of 9, a total reduction of 65 ten thousand head, or 18%. However, supply continued to be released on the commercial hog sales side: sales in 9 totaled 642.3 ten thousand head, up 15.24% year over year.
New Hope adjusted its full-year slaughter plan. At an investor exchange on month 8, day 31, the company said it would respond to capacity-control policies, with annual slaughter volume in year 2026 reduced compared with year 2025, to approximately 1600 ten thousand head for the year. Meanwhile, the company will continue to reduce costs through health management, production management, and breeding improvements.
In addition, the pace of capacity contraction in this round closely aligns with the direction of industry policy regulation. Data released by the National Bureau of Statistics show that at the end of the third quarter, the number of breeding sows nationwide stood at 3602 ten thousand head, a year-on-year decrease of 433 ten thousand head, indicating that industry capacity optimization is progressing in an orderly manner.
However, the decrease in the number of sows has not yet translated into a decline in pork supply during the current period. In the first three quarters, 53739 ten thousand pigs were slaughtered nationwide, a year-on-year increase of 1.4%; pork output was 4508 ten thousand tons, a year-on-year increase of 3.2%. (Compiled from Blue Whale News, Sina Finance, Cailian Press, and others)