Hog cycle – deteriorated cash runway suggests accelerating supply response and price inflection ahead; Maintain Buy on Muyuan H/A

Research evidence excerpt

Hog cycle – deteriorated cash runway suggests accelerating supply response and price inflection ahead; Maintain Buy on Muyuan H/A

Equity Research

30 June 2026 | 12:11PM HKT

CHINA AGRICULTURE

Hog cycle - deteriorated cash runway suggests accelerating supply

response and price inflection ahead; Maintain Buy on Muyuan H/A

The Chinese domestic hog price has stayed at a depressed level for the most part of Trina Chen

+852-2978-2678 | trina.chen@gs.com

1H26, on the back of weak pork demand and limited industry supply work. With Goldman Sachs (Asia) L.L.C.

nearly 100% of producers at cash loss, we expect the supply response to accelerate, Roy Shi

including sow-herd reduction, continued policy push on supply work, and potentially +852-2978-0110Goldman Sachs (Asia)| roy.shi@gs.comL.L.C.

more supply exits given the limited cash runways ahead, including recent related

events of selected producers. Our analysis suggests the current hog price has led to

rapidly shortened cash runways - specifically nearly 30% of listed producers at less

than 6 months as of end of 1Q26, or nearly 50% as of end of 2Q26.

We maintain our view on hog price recovery in 2H26E, estimating the market balance

to reach 5% in supply deficit, versus 6% of surplus in 1H26E. Maintain BUY on

Muyuan H/A. Valuation is below its replacement cost valuation (or liquidation value)

on our estimates, and breached its historical low end EV/head - presenting attractive

risk/reward opportunities.

Cash runway analysis suggests supply response ahead

The hog sector in China is at a classic cyclical bottom, with nearly all producers at

cash negative profit for the most part of 1H26, signs of distress emerging, and

potential accelerating supply cuts ahead - past cycle patterns suggest an extended