Pork prices continue to drop, giving the "Yunnan Pig King" more opportunities to hone his second generation

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Pork prices continue to drop, giving the "Yunnan Pig King" more opportunities to hone his second generation

source media collection

2026.11.10 18:07

· From Guangdong

Full text 2614 words

Text | Yuan Media Hui, author | Hu Qingmu

Another actual controller of a listed company got divorced.

Yunnan pig giant Shennong Group recently announced that chairman He Zuxun and Luo Wanyu had terminated their marriage.

According to the property division arrangement, He Zuxun transferred 30% of the 261 million shares of Shennong Group, or 78.305 million shares, to his ex-wife. Calculated based on the closing price of 31.7 yuan per share on the announcement day, the corresponding market value is approximately 2.482 billion yuan. At the same time, the two parties signed a concerted action agreement and still maintained control of the listed company.

Currently, the foreign three-yuan pig price has fallen below 9 yuan/kg, the pig-to-grain ratio continues to be lower than the profit and loss line, the peak pickling season is limited, and the industry has hit bottom for the second time. Cash flow is the lifeline of pig companies at the moment.

Shennong Group is actively responding to the pig cycle—listed companies are tightening budgets, shrinking expansion, and prioritizing cash flow at the bottom of the cycle.

In September this year, the total cost of Shennong Group was 11.6 yuan/kg, the weaning cost was 240 yuan/head, PSY was 32 heads, and the feed-to-meat ratio was 2.47. Shennong Group stated at the third quarterly investor exchange meeting that the company's total breeding costs are currently in the first echelon of the industry, and cost improvements come from multiple optimizations on the production side.

Actively respond to the pig cycle

Pig breeding is a typical industry with strong cycles and heavy assets, and cash flow is the lifeline of the enterprise.

By the beginning of November, the traditional peak season for curing and curing stockings had arrived as scheduled, but the demand was not as strong as expected. Coupled with the concentrated sales of stocks in the early period and continued supply suppression, the domestic pig market hit bottom for the second time.

The current pig-to-grain ratio is about 3.85:1, which is significantly lower than the break-even point of 6:1. The industry generally loses money on every sale, and most pig companies continue to consume cash to get past the bottom.

Shennong Group has not been able to survive alone. Revenue in the first three quarters increased by 5% to 4.12 billion yuan. Net profit attributable to the parent company was in the red, and operating cash flow continued to outflow. In this regard, Shennong Group gave the reason that it was mainly due to the increase in pig sales but the decrease in sales price compared with the same period last year.

This reflects the current primary goal of Yunnan’s pig-raising giants: to survive.

Shennong Group took the initiative to slow down its expansion.

Among them, on the capital side, Shennong Group planned a 290 million yuan simple-procedure fixed increase, and actively terminated the application, temporarily closing the equity financing channel. On the production capacity side, the Guangxi Longmen pig farm project originally planned to be invested and constructed was suspended in July 2026, slowing down the pace of cross-regional expansion.

In addition, Shennong Group has begun to strengthen the management and control of financial resources, focusing on tilting towards its base camp. In April 2026, it will focus on increasing capital in Yunnan's local stock breeding subsidiaries such as Wenshan, Eryuan, and Huaping. It will maintain its mature production capacity base, strictly control new capital expenditures, and concentrate its limited cash on businesses with higher certainty.

Against the background of the downturn of the pig cycle, Shennong Group has also become more cautious in its returns to shareholders. Judging from the historical trajectory of shareholder returns, its dividend strategy is highly bound to the profits of the pig cycle.

In 2021 and 2022, when the industry is booming and Shennong Group is profitable, it will implement annual cash dividends as scheduled; in 2023 and 2024, when pig prices fall and losses continue, dividends will be suspended accordingly.

In 2025, the market will recover in stages. Shennong Group seized the profit window and launched an interim dividend. It was also the only semi-annual cash distribution since its listing. However, the annual report stopped distribution again. Entering 2026, the industry is still in an adjustment cycle, and Shennong Group continues to shelve its dividend plan and maintain priority in retaining funds to ensure production and operations.

At the end of the third quarter of 2026, Shennong Group's asset-liability ratio was only 46%, with a total capital reserve of approximately 2 billion yuan. The asset-liability ratio was in a low range among listed pig breeding companies.

A new variable in family inheritance

Listed companies are careful in every aspect, pay dividends cautiously, and put the brakes on external expansion. All capital arrangements are centered around overcoming the cycle and ensuring cash flow. In the context of the same bottom window of the industry, the property division of the actual controller has obviously attracted much attention.

However, the knock-on effects of this split may be more reflected in the family control structure.

According to the announcement, Shennong Group Chairman He Zuxun originally directly held 49.6% of the company's shares. This time, he transferred 78.305 million shares to his ex-wife Luo Wanyu, corresponding to 14.88% of the total share capital.

After the transfer was completed, He Zuxun’s direct shareholding dropped to 34.72%. The two signed a concerted action agreement simultaneously, the voting rights remained unified, and the actual controller of the listed company did not change.

Before the split, He Zuxun's control base was based on his own shareholding plus a stable and concerted action circle composed of several brothers and sisters, He Qiaoguan, He Yuebin, and He Baojian.

Tianyancha shows that before the divorce and split, the He family combined the family shareholding platform Yunnan Zhengdao Venture Capital to hold a total of 86.31% of the shares of Shennong Group.

This is a typical family entrepreneurial model. The core equity is concentrated in the hands of immediate brothers and sisters. The stakeholders within the family are clear and have unified demands, which provides a stable decision-making basis for the implementation of the company's strategy.

Wen's shares have a similar structure. Among the top ten shareholders at the end of September 2026, they are mainly Wen family members such as Wen Pengcheng and Wen Junsheng, and founding team members such as Yan Juran and Yan Juneng.

Back to Shennong Group. After the transfer was completed, Luo Wanyu became one of the top shareholders, holding nearly 15% of the shares. As a result, she became a new variable in the inheritance of the He family members' company.

Because in this property division, neither He Zuxun nor Luo Wanyu chose to convert their shares to the second-generation reserve candidate He Xinyang. It is worth mentioning that according to the reporter of Nandu Wancaishe, He Xinyang is the son of He Zuxun, but not Luo Wanyu.

The equity quota that was originally controlled by He Zuxun and could be flexibly used for inheritance arrangements was carved out at once, and the chip space that he could allocate independently for succession arrangements was passively reduced.

He Xinyang, the second-generation successor who has been trained for seven years, is obviously still a long way from officially taking over.

Still training for the second generation to take over

This year, He Zuxun is 61 years old, but he has been considering the issue of company inheritance for a long time. Like many family businesses, He Zuxun first let his son He Xinyang enter Shennong Group to gain experience at the grassroots level and in multiple departments before entering management.

Since 2019, He Xinyang joined Shennong Group and has been promoted from assistant to the president and human resources director to deputy general manager. He is currently in charge of middle and back-end business sectors such as procurement, operations, human resources, and animal nutrition research and development.

Judging from the training path, He Zuxun consciously made him familiar with the full chain supporting system, but he has not yet independently led the front-line decision-making work of the main breeding industry. He has neither joined the board of directors of a listed company, nor directly or indirectly held shares in a listed company.

It can be judged from this that the current second-generation successors of Shennong Group are still being tempered. He Zuxun's cautious attitude is also related to the current industry cycle.

The pig industry is a typical strong-cycle, asset-heavy track, coupled with disease risk disturbances, which will test the helmsman's judgment on cash flow, production capacity investment, and industry turning points.

Among leading companies in other industries, Qin Muyuan, the son of the founder of Muyuan Co., Ltd., focuses on the slaughtering sector. Although he has joined the board of directors, the core business of pig breeding is left to a professional management team that grew up internally. Relying on the foundation of the partnership system, the Wen family took the route of new generations of the family entering the management level in batches and multiple people co-governing.

Although there are differences in the succession routes, the essence is "more or less the same" - the second and even third generations of succession tend to have a conservative and cautious attitude.

The complete pig cycle includes bottoming out losses, clearing production capacity, rising prosperity, and cashing in profits. He Xinyang still lacks practical experience in making difficult choices such as reducing production capacity and reducing capital expenditures in the stage of deep losses.

Succession in the true sense requires management rights and equity to form a closed loop. At this stage, He Xinyang is missing both.

After the split of He Zuxun's equity, Luo Wanyu, a single new shareholder, was added. In addition, the original equity was dispersed among other members of the He family, and the bargaining chips left for He Zuxun's equity mobilization were reduced.

The challenges in the future for the second-generation successors of Shennong Group who have not yet been tempered are not only the pig cycle, but also the right to speak in equity.

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