Haid Group: Feed Gross Profit Rose CNY 0.55 Billion, Farming Gross Profit Fell CNY 1.46 Billion, and CNY 46.24 Offers No Conservative Margin of Safety

The most important bear argument is equally concrete. Haid’s feed franchise did not prevent a CNY 1.03 billion attributable-profit decline in six months. An investor who values the group as if feed were the whole company will systematically understate its earnings volatility. The farming segment’s gross margin collapsed from about 20.26% to 6.41%; agricultural-product revenue fell 18.10% to CNY 7.97 billion. The company attributes the deterioration chiefly to sharply lower hog prices.

From aquaculture technician to national feed platform

Haid’s present sales model grew out of the founders’ original expertise, so its origin matters. Founder Xue Hua studied aquaculture and animal nutrition and worked in agricultural research before starting the predecessor business in Guangdong in 1998. Contemporary accounts describe a young company with limited capital but formulation knowledge, initially favoring relatively asset-light premixes before broadening into complete feed. The competitive setting already included foreign and domestic feed groups, especially Charoen Pokphand and emerging Chinese-scale producers; Haid’s wedge was technical performance in aquaculture rather than simply being another grain mill.

That origin produced a business philosophy that became explicit in 2006, when Haid says it began positioning itself around comprehensive farming technical service. The current system extends from seedstock and stocking plans through environmental control, disease prevention, feed, animal-health products and market information. The H1 2026 report says more than 10,000 technical-service personnel work in this system and that the group operates hundreds of service stations in major farming regions.

The listing route was conventional rather than financial engineering. Haid listed in Shenzhen on 2009-11-27 after issuing 56 million shares at CNY 28 each; post-IPO share capital was 224 million shares. Gross proceeds were therefore CNY 1.568 billion, and the unadjusted post-issue equity value was CNY 6.272 billion. Before the IPO, Shenzhen Haida Investment held 88.11% and CDH Nemo Hong Kong held 11.89%; the prospectus presented an operating-company expansion story rather than a reverse merger, SPAC or carve-out.

From roughly 2010–2017, Haid built the moat it relies on today. Haid added local factories near farming regions while centralizing procurement and formulation knowledge. By 2017 feed volume had reached about 8.49 million tonnes, up 15.83% that year, even as avian influenza, environmental restrictions and shifts in farming economics pressured parts of the customer base. That period established a pattern that still matters: industry stress often hurts farmers first but can accelerate Haid’s share gains if smaller mills cannot match formulation, procurement and field-service economics.

The following phase, roughly 2018–2021, broadened the model. African swine fever restructured Chinese hog production toward larger farms and much higher biosecurity standards; Haid expanded pig-feed capability and farming exposure while pushing overseas. A 2019 Louis Dreyfus Company announcement described Haid as already operating in China, Vietnam, India, Indonesia and Ecuador, with group feed sales above 10 million tonnes. The company’s subsequent strategy added Africa and Latin America more deliberately.

That expansion created the central strategic trade-off visible today. Owning farming operations gives Haid live data on feed conversion, genetics, disease management and farmer economics. Demonstration farms can help sell feed and technical systems. Yet farming also transforms a relatively low-margin but diversified processing business into a partial commodity producer. The earnings record shows the cost. Attributable profit fell to CNY 1.64 billion in 2021 from about CNY 2.52 billion in 2020 despite revenue reaching about CNY 86.0 billion; it recovered to CNY 2.96 billion in 2022, slipped to CNY 2.74 billion in 2023, then rose to CNY 4.50 billion in 2024 before easing to CNY 4.28 billion in 2025.

Across 2022–2024 the capital story also changed. Consolidated cash spent on fixed assets, intangibles and other long-term assets was about CNY 5.00 billion in 2022, then fell to CNY 3.35 billion in 2023 and CNY 3.14 billion in 2024. The 2023 report said the group’s 40-million-tonne feed-capacity layout had essentially been completed, helping explain lower domestic expansion capex.

The newest stage began in 2025. Full-year feed-industry sales volume reached about 32.09 million tonnes under the annual report’s broad sales-volume definition. Contemporary reporting on that filing separates the number into approximately 29.86 million tonnes of external sales and 2.22 million tonnes used internally. External poultry feed was about 14.70 million tonnes, swine feed 7.70 million tonnes, aquafeed 6.96 million tonnes and ruminant/other feed about 0.50 million tonnes. This report uses 29.86 million tonnes as the FY2025 external-volume base because it is comparable with H1 2026’s explicitly stated external volume.

The 2025 numbers already carried a warning. Revenue increased 12.10% to CNY 128.47 billion, but attributable net profit fell 4.97% to CNY 4.28 billion. Management said hog-farming profit fell by more than CNY 0.9 billion as hog prices weakened and piglet costs remained high. Quarterly attributable profit ran CNY 1.28 billion in Q1, CNY 1.36 billion in Q2 and CNY 1.50 billion in Q3, then collapsed to only about CNY 0.14 billion in Q4. H1 2026 accelerated a pressure already visible in late 2025; it was not a completely new event.

Management simultaneously began an organizational overhaul in 2025, describing 2026 as the year in which the flatter, more specialized structure would be deepened. H1 management pointed to swine feed as an early example: volume rose about 15% while sales and management headcount grew substantially more slowly, lifting employee productivity. That cost discipline matters because plain feed has little room for waste when raw materials account for more than 95% of feed cost.

Haid also proposed separating its international feed, seedstock and animal-health operations into Haid International Holdings for a Hong Kong Main Board listing. The October 2025 plan called for assets in Asia excluding East Asia, Africa and Latin America to be reorganized under the subsidiary, with Haid retaining absolute control and committing to at least 75% ownership for five years after listing. The proposal identified Vietnam and Indonesia as core Southeast Asian markets, Egypt as the African bridgehead and Ecuador as the Latin American base. As of the latest specific progress disclosure recovered for this research, dated 2026-01-14, the process remained ongoing; the H1 2026 filing did not present a completed listing. The spin-off should be valued as optionality, not as an accomplished transaction.

Capital returns have become more visible alongside expansion. The FY2025 annual proposal was CNY 1.10 per share. For H1 2026, the proposed interim dividend is CNY 0.15 per share. The company also states that CNY 281.38 million of shares repurchased for cash had been cancelled on 2026-04-22; combining that cancellation with the estimated CNY 248.46 million interim dividend gives CNY 529.84 million, equivalent to 32.89% of H1 attributable profit under the company’s calculation.

The dilution side should not be ignored. A stock-option program had approximately 14.71 million options eligible in the referenced second exercise period at CNY 28.16, equivalent to roughly 0.9% of then share capital. Buybacks and option issuance need to be judged together, not as if every repurchase were a pure reduction in economic share count.

The capital market’s current message is restrained. Haid closed at CNY 46.30 on 2026-08-24, fell 2.81% to CNY 45.00 after the interim report on August 25, slipped to CNY 44.67 on August 26, then recovered to CNY 46.24 by August 28. Its 52-week trading range was approximately CNY 40.46–68.48. That modest net reaction despite a 39% earnings decline suggests, as an inference rather than a directly observable fact, that investors already expected meaningful cyclical damage and are looking through H1 toward feed-share gains and a possible 2027 hog recovery.

Financial engine, business model, moat and governance

Haid’s economics start with the spread between feed revenue and raw-material cost. FY2025 feed-industry cost was 95.61% raw materials, 1.18% labor and 2.84% manufacturing overhead. That is a highly variable-cost structure. Haid gets less classic factory operating leverage than a software or branded-consumer business. Its scale advantage instead comes through procurement, formulation substitution, plant utilization, logistics density and the ability to spread field-service and management costs across more tonnes.

H1 2026 confirms that feed remains the economic core. Feed-industry revenue was CNY 56.27 billion, or 87.6% of group revenue before looking at product-level classifications; direct feed-sales revenue was CNY 54.27 billion, up 15.14%. Feed-sales gross margin was 9.52%, just 0.27 percentage points below the prior year. Animal-health revenue was CNY 0.505 billion with a 48.24% gross margin, while agricultural products generated CNY 7.97 billion with only a 6.41% gross margin after a 13.85-point collapse.

Derived figures are my calculations from company-reported revenue, cost, margins and external volume.

The table isolates the central finding of the report. The H1 2026 profit collapse was primarily a farming-cycle event, not evidence that Haid’s core feed spread broke. Farming gross profit fell by approximately CNY 1.46 billion. Feed gross profit increased approximately CNY 0.55 billion. The farming deterioration alone was larger than the entire CNY 0.90 billion decline in group gross profit.

The percentage feed margin did compress. A different measure shows why that result should not be read as a collapse in pricing power. Blended feed gross profit per external tonne increased from roughly CNY 338 to CNY 350, while feed revenue per external tonne rose from approximately CNY 3,453 to CNY 3,672. The gross-margin percentage fell because both selling price and raw-material cost rose, not because gross profit per tonne disappeared. Mix also matters: aquafeed, swine feed and poultry feed have materially different economics.

One disclosure limit matters here. Haid does not publish statutory revenue, cost and gross profit separately for aquafeed, poultry feed and swine feed. It publishes volume by category and aggregate feed revenue and cost. Exact category-level gross profit per tonne cannot be reconstructed from the filing. Some secondary research reports publish estimated category margins or profits, but at least one such post-H1 account also uses category-volume figures that do not reconcile with the company’s H1 external volumes; I exclude those estimates rather than manufacturing false precision.

The group profit bridge provides considerably more detail.

The bridge is calculated from the H1 2026 and H1 2025 income statements. Selling expense rose about CNY 52 million, management expense CNY 170 million, R&D CNY 36 million and finance cost CNY 21 million. Investment income rose to CNY 361 million from CNY 90 million, mainly because of derivatives/futures activity; the fair-value loss also narrowed to about CNY 41 million from CNY 106 million. Credit-impairment losses and asset-impairment charges deteriorated by a combined roughly CNY 80 million, and tax expense rose by about CNY 87 million.

The non-recurring bridge is just as important. H1 2026 non-recurring items contributed approximately CNY 305 million to attributable profit. The largest item was roughly CNY 316 million of gains from financial assets and liabilities, including derivatives not treated as qualifying hedges for this definition; government grants added about CNY 23 million and a receivables-impairment reversal added about CNY 19 million, partly offset by disposal losses, tax and minority interests. H1 2025’s headline attributable profit was slightly below its adjusted profit, implying roughly negative CNY 16 million of net non-recurring items. The year-on-year improvement in non-recurring support was therefore around CNY 321 million.

Adjusted earnings therefore fell 50.81% even though headline profit fell 38.95%. The deterioration in repeatable earnings was substantially worse than the headline number suggests. Much of the deterioration sits in farming output prices rather than the feed franchise, but farming belongs to shareholders just as much as feed does.

The company does not disclose a standalone hog-farming income statement. Agricultural products combine hogs with aquaculture and other downstream activities, and segment capital employed is also not reported by operating business. One secondary report estimated an H1 hog-farming loss of roughly CNY 0.3 billion, but because its accompanying category feed volumes do not reconcile with primary H1 volume disclosures, I do not treat that loss estimate as investment-grade evidence. The defensible statutory statement is that the broader farming segment generated only about CNY 0.51 billion of gross profit versus roughly CNY 1.97 billion a year earlier, and management attributes the largest swing to lower hog selling prices.

That disclosure gap prevents a clean feed ROIC versus farming ROIC calculation. The qualitative capital distinction is still clear. Feed working capital is dominated by grain, protein meals, receivables and distributed production assets; farming adds biological inventory, farms, leases and downstream commodity exposure. H1 receivables rose 81.65% from year-end to CNY 5.41 billion, inventory rose 22.39% to CNY 13.92 billion, and short-term borrowings rose 209% to CNY 3.60 billion, with management linking the borrowing increase mainly to overseas subsidiaries.

Operating cash generation has historically been better than the earnings volatility might imply.

The 2021–2025 cumulative OCF/net-profit ratio is approximately 2.29× by my calculation. The unusually high 2023 figure partly reflects working-capital movements and should not be capitalized as a permanent conversion rate. A narrower conclusion holds: Haid has not historically exhibited a chronic inability to turn accounting profit into cash.

Revenue compounded at roughly 10.6% annually from 2021 to 2025. Attributable profit compounded much faster from its depressed 2021 base, but that earnings CAGR is economically misleading because hog-cycle troughs and peaks dominate the endpoints. ROE’s recovery from 14.53% in 2023 to 20.88% in 2024 and subsequent easing to 17.42% in 2025 conveys the same message: returns are attractive across a normalized cycle, but far from mechanically stable.

H1 2026 operating cash flow of CNY 3.92 billion against CNY 1.73 billion of total net profit also appears healthy, but the balance sheet shows that growth is consuming working capital at the same time. Receivables and inventory should be judged over full-year cycles, not from June alone.

Four parts of Haid’s moat have survived adverse conditions.

First is formulation knowledge. Haid says it has built a large animal-nutrition and raw-material database over more than two decades, adding several thousand comparative experiments each year. The commercial value is the ability to reformulate when soybean meal, fishmeal, corn, wheat or alternative proteins move out of line. That mattered in H1 2026 because fishmeal briefly exceeded CNY 24,000 per tonne.

Second is field service. More than 10,000 service personnel and hundreds of stations reduce the risk that a farmer buys a theoretically good feed but executes poorly on stocking density, water conditions, disease prevention or feeding. The economic switching cost is not contractual. It comes from the farmer comparing total harvest economics rather than feed price per bag. That is a stronger moat in aquaculture and fragmented farming than in large industrial poultry accounts that can employ their own nutritionists.

Third is procurement and plant density. Haid combines group and regional procurement, hedging and local production near farming clusters. Large volume does not make commodity grain cheap by decree, but it permits more origin choices, formulation substitution and freight optimization. Feed gross profit per tonne held up in H1 despite a severe fishmeal shock, which is evidence that this capability was still functioning.

Fourth is the emerging seedstock and animal-health layer. Animal-health gross margin was 48.24% in H1, although the business was only CNY 0.50 billion of revenue. Haid also says it has nine nationally recognized new aquatic varieties across shrimp and freshwater fish. Seed genetics can create a stronger technical moat than plain feed because survival, growth rate and disease resistance influence the farmer’s whole production cycle. The current financial contribution remains too small to value Haid as a genetics or pharmaceutical company.

There are no meaningful network effects. Brand matters, but brand alone would not protect a 9–10% feed gross margin if farm economics deteriorated. Customer stickiness is earned repeatedly through feed conversion, survival, service and credit discipline.

Management and ownership are unusually stable for a company of this age. Xue Hua remains chairman and general manager, and the controlling shareholder still held a majority stake; the H1 summary shows approximately 55.34% for the controlling shareholder. The 2025 audit was issued by Grant Thornton China/Zhitong (致同会计师事务所) without a modified opinion, with revenue recognition among the principal audit areas.

Capital allocation is more mixed than operating execution. Feed capacity, R&D and overseas localization have produced tangible volume growth. Farming has produced technical learning but also imported earnings volatility severe enough to wipe out much of the feed franchise’s incremental gross profit in H1 2026. My judgment is that farming adds strategic value only while it stays constrained in scale and functions as a demonstration, data and technical-learning platform. A major increase in commodity farming capital would weaken the investment case.

Industry cycle and horizontal competition

China’s feed market is mature in aggregate volume but still consolidating structurally. H1 2026 national industrial-feed output was reported at approximately 168.5 million tonnes, up 3.9%, including 158.0 million tonnes of compound feed, up 4.3%. Haid’s 14.78 million tonnes of external sales grew about twice that rate. Directly dividing the two would produce a rough figure near 9%, but it would not be a rigorous market share because the national figure includes production definitions that do not match Haid’s external-sales denominator. Growth relative to the market is the more reliable evidence.

Consolidation is running at both ends of the industry. Chinese hog farming’s scale rate already exceeded 70% by 2025, with the top 20 producers accounting for more than 30% of output. That helps large suppliers because sophisticated customers demand consistent nutrition, traceability and credit discipline. It also creates a threat: vertically integrated hog groups such as Muyuan manufacture much of their own feed. Haid’s H1 report explicitly says commercial pig-feed demand is pressured as large integrated farms internalize feed production and the share of smaller independent farmers declines.

The profit pool is moving away from undifferentiated tonnes. Plain poultry and swine feed face intense price competition. Aquafeed, genetics, animal health, formulations that substitute expensive raw materials, and field services capture more value because a small improvement in survival or feed conversion can matter more to a farmer than a modest change in feed price. Haid’s 48.24% animal-health margin versus 9.52% feed-sales margin illustrates where gross-margin density lies, though animal health remains much smaller.

Hogs dominate the immediate cycle. At the end of H1 2026, China had 424.91 million hogs, up just 0.1% year on year, and 37.80 million breeding sows, down 6.5% and only 0.8% above the newly revised “normal” sow inventory of 37.50 million. H1 hog slaughter was 372.46 million head, up 1.7%, and pork output increased 3.3%. Muyuan’s H1 filing describes the entire first half as a deep-loss period for hog producers.

Price data are even clearer. On 2026-08-19, the National Development and Reform Commission’s price-monitoring center reported an average hog price of CNY 11.20/kg, corn at CNY 2.46/kg and a hog-to-grain ratio of 4.55. That ratio is consistent with severe producer stress, and it explains why even very efficient operators were losing money.

Supply adjustment has started, but a turn takes time. Policy reduced the normal national breeding-sow target from 39.0 million to about 37.5 million in 2026, and Q2 inventory was already close to the new target. Because sow changes need roughly ten months or more to flow through piglet production and slaughter supply, the evidence supports a better hog backdrop in 2027 more strongly than it supports an immediate H2 2026 recovery. That timing is an inference from the inventory data and industry production cycle rather than company guidance.

Raw materials create the second cycle.

The fishmeal peak is from Haid’s own filing; the July corn/soymeal figures are industry-market data reported in August, while the August corn point is from the NDRC price-monitoring series.

Fishmeal is the unusual problem. Haid describes H1 2026 as one of the most extreme fishmeal price increases in recent years, with prices breaking above CNY 24,000 per tonne. A post-results market report describes a move from roughly CNY 16,000 early in the year toward CNY 24,000 as Peruvian supply tightened. By late August quotations had retreated, which should reduce incremental pressure if sustained.

Aquaculture is less cleanly measurable than hogs because national species-level farm-gate data are fragmented. Haid’s primary disclosure says most ordinary freshwater-fish prices were relatively firm, tilapia was hurt by tariff effects, specialty fish remained weak, and shrimp prices were subdued as farming efficiency improved and supply expanded. It also says high fishmeal prices discouraged early-year stocking in some aquaculture categories, potentially reducing H2 feed demand. I did not recover a sufficiently consistent nationwide primary species-price time series to turn those statements into a single aquatic-price index, so that remains a research blind spot rather than a fabricated data series.

The 12-month cycle picture is thus late-downcycle rather than confirmed recovery. Hog breeding capacity is approaching a policy-defined normal range, a positive leading indicator. Current hog economics remain deeply unprofitable, a negative coincident indicator. Fishmeal appears off the extreme peak, while aquaculture stocking is mixed. The strongest protection for Haid is market-share gain, not an already favorable commodity cycle.

What the competitors have become

New Hope Liuhe is the closest Chinese structural comparator because it combines commercial feed with hogs, poultry and downstream food. Its model has historically been more heavily exposed to large integrated livestock operations and the pig cycle than Haid’s aquaculture-rooted service system. New Hope’s 2026 interim summary was filed on 2026-08-29, almost at this research cutoff, limiting the amount of segment detail available in the parsed sources; its FY2025 annual report remains a more stable basis for structural comparison.

Tongwei is a historical aquafeed rival that became something economically different: solar manufacturing now dominates the listed group’s earnings risk. Tongwei reported H1 2026 group revenue of CNY 34.36 billion and an attributable loss of CNY 5.12 billion, which largely rules the listed entity out as a clean feed multiple despite its continuing feed expertise. It remains important competitively in Chinese aquaculture, but a Tongwei group P/E tells an investor more about the solar cycle than about animal nutrition.

Muyuan and Wens are not feed peers; they are the correct benchmarks for Haid’s farming exposure. Muyuan reported H1 2026 revenue of CNY 59.41 billion and a net loss of about CNY 6.08 billion despite reducing June all-in hog production cost to around CNY 11.7/kg. Wens reported H1 revenue of about CNY 46.75 billion and attributable loss around CNY 4.37 billion. These losses show how severe the underlying hog shock was. Haid’s consolidated profit remained positive because feed absorbs rather than amplifies most of that commodity exposure.

Sources are each company’s H1 disclosure or contemporaneous filing coverage.

Charoen Pokphand Foods is the better international strategic comparison. CPF already operates an integrated feed-farm-food model across ASEAN and other markets, with deeper local farming integration than Haid in many countries. CPF reported a sharp sequential profit recovery in Q1 2026 as meat oversupply began to ease. The competitive lesson is that Haid is entering markets where CP has decades of distribution, breeder and farming relationships; overseas success cannot be extrapolated merely from Chinese scale.

Haid’s differentiation overseas is the same bundle it built domestically: feed plus genetics, animal health and technical service, localized rather than exported as a purely Chinese product catalogue. The proposed Haid International structure identifies Southeast Asia, Africa and Latin America as the focus. The filing specifically describes Vietnam and Indonesia as core Southeast Asian markets, Egypt as the African bridgehead and Ecuador as the Latin American platform.

Two major H1 subsidiaries show that overseas profitability is already more than a narrative. The report lists Sheng Long Bio-tech International with approximately CNY 1.54 billion of H1 revenue and CNY 0.18 billion of net profit, and the Ecuador feed subsidiary with about CNY 1.31 billion of revenue and CNY 0.17 billion of net profit. These are subsidiary-level figures, not a consolidated overseas margin, but they show that meaningful international profit pools already exist.

Group overseas revenue reached CNY 10.19 billion in H1 2026, up 24.01%, with a reported geographic gross margin of 13.90%, down 1.18 percentage points. The 13.90% should not be compared mechanically with the 9.52% product-level feed margin because the geographic line includes a different business mix and consolidation structure. Still, overseas growth is clearly faster than domestic growth.

Haid does not publish a sufficiently complete by-country installed-capacity and utilization schedule to support claims such as “Vietnam is X% utilized” or “Ecuador has Y million tonnes of spare capacity.” Management says new overseas capacity is gradually commissioning and that it has been debottlenecking pelleting and extrusion lines. The Hong Kong spin-off filing further describes international operations as being in a capital-intensive expansion period. Those facts support continued capacity growth, but country-by-country utilization remains insufficiently disclosed.

The timing question is how long before overseas genuinely changes group cyclicality. Starting from H1 2026 overseas revenue equivalent to roughly 15.9% of group revenue, a simple scenario in which overseas grows 25% annually and the rest of the group grows 5% would take overseas to about 31% of revenue after five years and about 43% after eight years. If overseas growth slows to 18–20%, 30% share takes roughly seven to eight years. These are my calculations, not management guidance. The practical answer is that overseas can begin changing the earnings mix within four to five years, but probably needs five to eight years before it is large enough to materially damp the Chinese farming cycle on its own.

Nutreco/Skretting and BioMar are useful technical benchmarks in premium aquafeed, and Alltech is an animal-nutrition and additive reference. Their ownership structures and limited public segment disclosures prevent clean public-equity valuation comparisons. That makes Haid relatively unusual: investors get a listed, scaled aquafeed and animal-nutrition franchise, but also inherit Chinese hog and downstream farming volatility.

The ecological niche is specific. Haid is neither the lowest-cost hog farmer nor a pure premium aquaculture nutrition company. It is a scaled commercial-feed company that tries to make customers’ whole farm economics better. In fragmented aquaculture and mid-sized livestock farming, that service architecture is hard to replicate cheaply. In industrial hog farming, vertically integrated customers can substitute away by producing feed themselves. Overseas is attractive precisely because many target markets are earlier in that industrialization curve.

Current fundamentals and valuation

The last two reported quarters show worsening profit momentum beneath growing revenue.

Huaan Securities’ post-results decomposition uses these filing data. Q2 brought more revenue than Q1 but less profit, while the year-on-year profit decline accelerated materially.

No reliable primary source in the material reviewed provides a clean “consensus beat/miss” number immediately before the interim report. The more informative expectation signal is that at least one covering broker cut 2026–2028 profit estimates after the print, even while retaining a positive recommendation. That tells us the market’s medium-term debate is about the depth and duration of the hog/input cycle, not about whether feed volume is growing.

The current market narrative has four ingredients. Feed share gain and international volume growth are already in the numbers. Organizational productivity improvements have early evidence but are not yet large enough to offset farming. Hog recovery is an expectation based on sow de-stocking. The Hong Kong spin-off is optionality subject to regulatory and transaction execution. Mixing the four together would overstate what has already been earned.

The balance sheet is not distressed, but expansion is visible. H1 assets were about CNY 55.29 billion. Cash was CNY 3.43 billion; accounts receivable rose to CNY 5.41 billion and inventory to CNY 13.92 billion. Short-term borrowings reached CNY 3.60 billion, up from about CNY 1.16 billion at year-end, primarily because of overseas financing. Finance expense rose about 14.1%. This is acceptable while overseas volume and cash generation grow, but it removes some of the financial conservatism visible after the domestic capacity build slowed.

Foreign exchange is now economically relevant. H1 other comprehensive income included a roughly CNY 231 million adverse foreign-currency translation movement, while international borrowing contributed to higher finance cost. Neither proves a permanent value loss, but both show why international revenue should not be valued as if it were identical to domestic CNY cash flow.

Historical and market-based valuation

At CNY 46.24 on 2026-08-28, live market data showed a TTM P/E of approximately 23.5× and TTM EPS near CNY 1.96. On FY2025 attributable profit of CNY 4.28 billion, the same CNY 76.6 billion market capitalization is about 17.9× historical earnings. The difference is the H1 2026 earnings collapse rolling into TTM profit.

Using Huaan’s freshly reduced CNY 4.306 billion 2026 forecast, the current market cap is about 17.8× 2026 earnings; against its CNY 5.714 billion 2027 forecast, it is about 13.4×. The stock is priced for some recovery, but not as though the 2027 recovery were guaranteed.

Historical valuation data vendors disagree materially on the live P/E denominator. One source displayed roughly 23.5× TTM after the interim report, while another valuation screen showed figures closer to the high teens or lower depending on update timing and earnings convention. That makes a precise “current historical percentile” unreliable at the base date. A domestic data source also shows a P/E median around the mid-20s under its methodology. My restrained interpretation is that Haid is near the middle to lower half of its long-run valuation regime on normalized earnings, but not at an extreme trough once the depressed H1 TTM denominator is used. I would not attach a false percentile to inconsistent feeds.

Peer P/E adds less information than usual. Muyuan and Wens are loss-making in H1; Tongwei’s listed earnings are dominated by solar losses; New Hope mixes feed with large farming and downstream exposure; CPF operates under a different country, accounting and capital-market regime. A single cross-sectional P/E table would imply comparability that does not exist. Absolute valuation against normalized Haid cash earnings deserves more weight.

Cash-flow passthrough and owner earnings

Five-year cumulative operating cash flow from 2021–2025 was approximately CNY 36.91 billion against roughly CNY 16.12 billion of cumulative attributable profit, or about 2.29×. Even excluding the exceptionally cash-rich 2023 year, conversion remained generally above 1×. The problem is not chronic cash conversion.

Total capex is not the same as maintenance capex. Haid spent CNY 3.35 billion, CNY 3.14 billion and CNY 3.34 billion on long-term operating assets in 2023, 2024 and 2025 respectively. The company said the major 40-million-tonne feed-capacity layout was substantially complete by 2023, while current investment is increasingly directed to international growth. On that evidence, I estimate maintenance capex at roughly CNY 2.2–2.6 billion in a normalized year and growth capex at roughly CNY 0.7–1.2 billion during the recent CNY 3.1–3.4 billion capex regime. This split is an analytical estimate; Haid does not disclose maintenance capex separately.

Using a conservative cash-owner-earnings proxy of 2025 OCF less estimated maintenance capex gives approximately CNY 3.66–4.06 billion. At the August 28 market capitalization, that is a 4.8–5.3% owner-earnings yield, equivalent to roughly 18.9–20.9× owner earnings. Headline FY2025 P/E is approximately 17.9×. The difference is under 30%, so the framework does not require abandoning earnings-based valuation, but I use owner earnings as a cross-check. Total 2025 free cash flow after all capex was about CNY 2.92 billion, only a 3.8% yield on current market capitalization.

Absolute valuation

The valuation below uses normalized 2027 owner earnings because H1 2026 hog losses make simple TTM capitalization misleading. It discounts a one-year-ahead normalized value back at approximately 9%; that is a research hurdle rate, not an observable market fact. Shares outstanding are held close to the current approximately 1.66 billion-share base, with repurchases and option exercise treated as roughly offsetting at scenario precision.

The volume anchor is intentionally below, around, and above the post-H1 Huaan projections of 32.51 million tonnes for 2026 and 35.94 million for 2027.

This is valuation-scenario analysis within a research framework, not investment advice.

The conservative case assumes Haid continues taking some feed share but the hog cycle provides little help, fishmeal remains expensive and the market refuses a premium multiple. The base case requires the feed franchise to do what it has already been doing: mid-to-high single-digit or better volume growth, no structural gross-margin damage, plus partial normalization of farming. The optimistic case needs both overseas compounding and a cyclical recovery. It deserves the highest skepticism because those two drivers can be correlated through animal-protein economics.

Expectation-gap risk sits mainly in 2027. The market can tolerate weak H2 2026 if feed volume and per-tonne economics remain intact and sow de-stocking continues. It will become harder to defend the current multiple if the hog industry reaches early 2027 without price recovery, or if aquafeed margin fails to improve after fishmeal eases.

A market-data calendar currently indicates the next earnings report for 2026-10-16. I treat that date as expected rather than company-confirmed because a primary scheduled-disclosure notice was not recovered in the sources reviewed.

Margin-of-safety recheck

At CNY 46.24 the current price sits above the conservative fair-value range of CNY 37–42. On the framework’s own conservative case, the margin of safety is zero.

The most fragile base-case assumption is normalized feed/farming owner EPS of roughly CNY 3.20–3.40 in 2027. If the earnings recovery achieves only 70% of that assumption, normalized owner EPS falls to roughly CNY 2.25–2.38. At 17× and discounted one year at 9%, the resulting present value is only around CNY 35–37 per share.

A tougher flat-earnings test produces the same warning. If current TTM EPS of roughly CNY 1.96 remains flat for three years and the P/E normalizes from approximately 23.5× to 18×, the terminal share price would be around CNY 35.3. Even allowing approximately CNY 1 per share of annual cash dividends, the three-year annualized total return would be roughly negative mid-single digits. China’s 10-year government-bond yield was about 1.70% on 2026-08-28. Under that flat-earnings test, there is no margin of safety at this buy price.

Maintaining the current 23.5× multiple with zero earnings growth would produce a dividend-like low-single-digit return instead, but that assumes investors continue paying a recovery multiple after three years in which recovery never arrives. I regard that as too generous for a margin-of-safety test.

Margin-of-safety sufficiency verdict: none.

That is not the same as calling Haid grossly overvalued. It means the current price asks the buyer to receive at least part of the earnings recovery that the operating evidence makes plausible. The conservative case is not being purchased at a discount.

Risks, catalysts, tracking indicators and uncertainties

The largest risk has high probability over the next twelve months and high earnings impact: prolonged hog losses. The observable indicators are hog price, the hog-to-grain ratio and breeding-sow inventory. At a 4.55 hog-to-grain ratio on 2026-08-19, the industry is already in a severe loss environment; if the ratio stays below 5 through early 2027, Haid’s farming business can continue absorbing feed-franchise profit. The H1 transmission path is already visible: farming gross profit fell approximately CNY 1.46 billion year on year.

Against that, sow inventory has fallen to 37.80 million, close to the new 37.50-million normal target. That reduces the probability of an indefinitely worsening cycle but does not eliminate the lag between capacity cuts and slaughter supply. A durable move in the hog-to-grain ratio above 6 would be a much stronger positive signal than one month of higher hog prices.

Raw-material and pass-through risk carries medium probability with high potential impact. Fishmeal above CNY 24,000 per tonne is particularly relevant to aquafeed, Haid’s technically strongest and generally higher-value category. So far the feed franchise has passed through enough cost to keep aggregate gross profit per tonne above H1 2025, but overseas geographic gross margin fell 1.18 points and feed gross-margin percentage fell 0.27 points. If fishmeal remains structurally elevated while farmers remain unwilling to accept feed-price increases, the current evidence of resilience can reverse.

Overseas execution is a medium-probability risk with medium-to-high impact. It is the most important long-term growth engine, but fast international expansion adds construction execution, local management, receivables, FX and funding risks. H1 short-term borrowing more than tripled from year-end, partly for overseas subsidiaries; finance expense rose 14.1% and foreign-currency translation generated a roughly CNY 231 million OCI loss. A combination of overseas growth below 10%, falling geographic margin and continued borrowing growth would challenge the thesis that internationalization is adding resilience rather than simply another capital cycle.

Credit and working-capital risk sits at medium probability and medium impact. Accounts receivable rose 81.65% from year-end to CNY 5.41 billion. Management attributes that primarily to scale expansion and seasonal peak sales, which is plausible, but credit impairment losses also worsened year on year. Feed companies serving smaller farmers can unintentionally turn product sales into financing if they defend volume too aggressively in a downcycle. The warning indicator is receivables growing materially faster than feed sales after seasonal normalization, accompanied by higher overdue balances or impairment charges.

The long-term strategic risk is farming capital creep. Its probability is medium and its impact on valuation could be high. Haid can justify small farming operations as demonstration and technology platforms. H1 proves that sufficiently large commodity farming exposure can dominate consolidated earnings. The observable signal is farming capex, biological assets and segment revenue growing faster than feed while farming returns remain below feed returns, not a press release about “integrated agriculture”. Because exact segment capital employed is not disclosed, investors need to monitor this indirectly through agricultural revenue, gross profit and group capex.

Governance risk is lower but non-zero. Founder control creates long-horizon alignment and decision stability, while also reducing the influence of outside shareholders. The planned international spin-off adds related-party, asset-allocation and minority-interest complexity even though Haid intends to retain at least 75% for five years. The economic test is whether outside capital accelerates overseas feed returns without transferring an excessive share of a valuable growth asset away from A-share holders.

Positive catalysts are already identifiable. Fishmeal returning toward more ordinary levels would remove pressure from aquafeed formulation and customer pricing. A hog-to-grain ratio moving sustainably above 6 would turn farming from a major drag toward a neutral or positive contributor. Overseas feed staying above 20% growth while geographic margin stabilizes would make the international thesis more credible. Continued headcount leverage in the reorganized swine-feed unit could convert volume growth into expense-ratio improvement. Progress on the Hong Kong spin-off could fund overseas capacity without proportionate A-share balance-sheet leverage, although no value should be assigned before regulatory and execution milestones become concrete.

Negative catalysts are the mirror image. Another fishmeal spike, hog prices staying around CNY 10–11/kg into 2027, a renewed decline in aquaculture stocking, overseas margin falling below domestic improvement, or rising credit losses could all force further earnings cuts. The clearest capital-market warning would be another round of 2027 estimate reductions after the post-H1 cuts already made.

†Expected date from a market-data calendar rather than a primary company scheduling notice. Operating and financial values come from Haid filings; hog variables come from government and industry disclosures.

The dashboard’s most useful combination is feed gross profit per tonne plus external volume growth. Volume alone can be bought with low prices or loose credit. Margin alone can be protected by refusing business. Shareholder value comes from sustaining both. Overseas revenue growth and margin should be read together for the same reason.

Hog indicators answer a different question: whether group earnings are about to stop fighting their own farming exposure. Sow inventory leads; hog-to-grain ratio is coincident. A low sow count with a still-depressed ratio describes the current setup: future supply is adjusting, but current economics remain poor.

Research uncertainties are material in five areas.

First, Haid does not disclose aquafeed, poultry-feed and swine-feed revenue and gross profit separately, so category gross profit per tonne cannot be independently reconstructed. Second, standalone hog-farming profit and farming capital employed are not published, preventing clean feed-versus-farming ROIC. Third, consolidated overseas installed capacity and utilization by country are not sufficiently disclosed. Fourth, a consistent nationwide species-level aquaculture price series was not recovered at research cutoff. Fifth, live historical-P/E databases disagree after the H1 earnings reset, so I have deliberately not reported a false precise historical percentile.

These gaps are relevant primarily to precision, not to the report’s central profit bridge: the statutory segment numbers are sufficient to show that farming, rather than aggregate feed economics, caused most of the H1 gross-profit deterioration.

Cross-synthesis, final research conclusion and sources

Vertically, Haid has proved one capability over almost three decades: it can convert animal-nutrition knowledge into feed-market share across changing farming structures. Its historical success was helped by China’s rising protein consumption, industrialization of farming and industry consolidation, but those tailwinds do not explain why Haid is still growing external feed about twice as fast as the national industry in a difficult H1 2026. Formulation flexibility, distributed production and a field-service system are operating capabilities rather than a historical accident.

The strongest test came from the raw-material shock. Fishmeal moved above CNY 24,000 per tonne, yet feed-sales gross margin fell only 27 basis points and blended feed gross profit increased approximately CNY 0.55 billion. Aggregate gross profit per external tonne rose slightly. That is evidence for pricing and formulation resilience. It does not prove every feed category improved, because the filing lacks category P&Ls, but it makes a structural collapse in feed pricing power difficult to reconcile with the statutory numbers.

The weakness is also clear. Management chose to own enough farming exposure that commodity animal prices can swamp that franchise’s incremental earnings. H1 farming gross profit fell about CNY 1.46 billion while feed gross profit increased about CNY 0.55 billion. The strategic case for farming is legitimate when it provides product testing, farmer credibility, technical data and demonstration capacity. The economic evidence argues for keeping that exposure limited.

Horizontally, Haid occupies a better position than a plain feed mill and a less defensive position than a pure animal-nutrition technology company. New Hope shares its integrated feed-plus-farming architecture but carries different livestock exposure. Tongwei remains a relevant aquafeed competitor but its listed economics are dominated by solar. Muyuan and Wens show what full hog-cycle exposure looks like: both fell deeply into loss in H1 2026. CPF is a formidable international benchmark because it has much deeper ASEAN integration. Haid’s edge is the combination of feed product performance and farmer-level service; its disadvantage overseas is that incumbents already possess local networks and farming relationships.

Overseas is the long-term swing variable. CNY 10.19 billion of H1 revenue growing 24% and feed volume growing more than 25% are large enough to matter, but not yet large enough to remake the group. At today’s roughly 16% revenue share, even sustained 25% overseas growth against 5% domestic growth takes about five years to reach 30% of group revenue. More realistic deceleration can extend that to seven or eight years. Investors expecting overseas to remove Chinese cyclicality within the next twelve or twenty-four months are pre-spending growth that has not yet reached sufficient scale.

The next twelve months are chiefly about whether three lines turn at the right time: hog prices, fishmeal and feed margin. Hog capacity has moved close to the new policy normal, which supports an eventual supply correction. Current hog economics remain deeply unprofitable. Fishmeal has retreated somewhat from the H1 extreme but remains high. Feed margins have held better than group profit suggests. That combination makes a 2027 recovery plausible without making it inevitable.

At three years, the more important question is overseas execution. A Haid that reaches roughly one-quarter to one-third overseas revenue, maintains international gross margin around the low-to-mid teens, and keeps farming capital constrained would deserve a structurally higher-quality earnings profile. A Haid that uses internationalization to add farms, working capital and leverage faster than feed earnings would deserve the opposite.

At five years, the central variable becomes whether the bundled “feed + seedstock + animal health + technical service” model remains differentiated as customers scale up. Large integrated hog producers can internalize feed. Small independent farmers value service but face financing pressure and consolidation. Haid needs its technical system to remain valuable to the increasingly professional mid-sized and large independent producer. Aquaculture and emerging overseas markets provide the best setting for that model because production outcomes still depend heavily on genetics, water, disease and feeding technique.

The stock market appears to understand much of this. At CNY 46.24 the TTM P/E looks elevated at roughly 23.5× because H1 profit has collapsed, yet a reduced 2027 brokerage forecast puts the multiple near 13.4×. That spread is the market’s recovery bet in one number. The stock is cheap if CNY 5.5–6.0 billion of earnings becomes normal quickly; it is not cheap if CNY 3–4 billion becomes the post-cycle normal.

The market may be misjudging the composition of the H1 decline more than its magnitude. A superficial reading sees revenue up and margin down and concludes that feed competition destroyed pricing. The segment bridge says farming drove the bulk of gross-profit loss while feed gross profit increased. Bulls are right on that point. Bears have the stronger argument on valuation discipline: at today’s price, shareholders do not receive the conservative outcome at a discount.

The commissioning brief’s 71/100 historical quality-screen score is directionally compatible with the feed franchise but almost irrelevant to the timing decision. A decade of good ROE does not change a current hog-to-grain ratio of 4.55, and it does not make a CNY 1.46 billion farming gross-profit decline disappear. Quality and cycle position answer different questions.

The case becomes materially better if feed gross margin remains above roughly 9.5%, overseas continues growing above 15–20%, receivables normalize after peak season, sow de-stocking pushes hog economics back toward equilibrium, and the share price provides a conservative margin of safety. The case should be overturned if feed volume ceases gaining on the industry for multiple periods while feed gross profit per tonne falls below CNY 300, because that combination would signal franchise deterioration rather than a farming cycle.

Core bull reasons

1. H1 external feed volume grew about 8%, roughly twice reported Chinese industrial-feed growth, while swine and aquafeed volumes rose about 15% and 21% respectively.
2. Feed gross profit increased approximately CNY 0.55 billion and derived blended gross profit per tonne rose to about CNY 350 despite fishmeal exceeding CNY 24,000 per tonne.
3. Overseas revenue grew 24.01% and overseas feed volume more than 25%, with major Vietnam- and Ecuador-linked subsidiaries already profitable.
4. China’s breeding-sow inventory has fallen to 37.80 million, close to the new 37.50-million normal target, improving the odds of a later hog-price recovery.
5. Five-year cumulative operating cash flow was more than twice cumulative attributable profit, reducing concern that Haid’s earnings are structurally non-cash.

Core bear reasons

1. Farming gross profit fell roughly CNY 1.46 billion in H1, more than offsetting approximately CNY 0.55 billion of feed gross-profit growth and exposing the cost of owning commodity farms.
2. Adjusted attributable profit fell 50.81%, materially worse than the 38.95% headline decline because roughly CNY 305 million of non-recurring gains cushioned reported earnings.
3. Overseas expansion is increasing working-capital and financing demands: short-term borrowing rose more than 200% from year-end and finance expense increased 14.1%.
4. At CNY 46.24 the share price exceeds the conservative CNY 37–42 fair-value scenario, leaving no conservative margin of safety.
5. Commercial-feed demand faces a structural offset from the consolidation of hog farming into integrated producers that manufacture their own feed, a pressure explicitly identified by Haid.

Pre-mortem

The first 50%-loss script begins with a failed hog recovery. Suppose 2027 hog prices remain around CNY 10–11/kg because productivity gains offset sow reductions, keeping the hog-to-grain ratio near or below 5. Haid’s farming margin turns negative rather than recovering from 6.41%. Fishmeal stays elevated and weak aquaculture stocking pushes feed gross margin from 9.52% toward 8.5%. Attributable EPS settles around CNY 1.5–1.7 instead of recovering above CNY 3. The market stops treating the problem as cyclical and assigns 14× earnings. A CNY 1.6 EPS at 14× gives roughly CNY 22 per share, slightly more than 50% below the August 28 reference price. The sequence requires both farming and feed economics to weaken; that is why it is a pre-mortem rather than the base case.

The second script attacks the long-term moat. Suppose that during 2027–2028 CP-linked operators, New Hope and strong local mills respond aggressively to Haid’s growth in Vietnam and Indonesia, using 5–8% lower pricing or bundled credit to defend accounts. Overseas feed growth falls below 10%, overseas geographic gross margin declines from 13.90% toward 10%, and the Hong Kong expansion program continues consuming capital. At the same time Chinese integrated hog groups keep internalizing feed. Consolidated feed margin falls below 9% and the market concludes that historical share gains depended on fragmented customers that are disappearing. Even with EPS around CNY 2, a de-rating to 14–15× would imply CNY 28–30, a decline of roughly one-third; adding renewed farming losses could plausibly produce a 50% drawdown. Haid’s H1 overseas momentum makes this a lower-probability scenario today, but it identifies the exact evidence that would invalidate the moat thesis.

Final research conclusion

Haid is a high-quality feed franchise housed inside a materially more cyclical agricultural group. H1 2026 did not show the core franchise breaking: external volume rose, feed gross profit increased, gross profit per tonne held up and overseas grew quickly. It showed the cost of the group’s farming exposure with unusual clarity. That distinction is the reason I would not sell Haid simply because adjusted earnings fell 51%, and it is also the reason I would not capitalize the feed franchise as though the farming losses belonged to someone else.

At CNY 46.24, the stock already offers reasonable upside if 2027 resembles the post-H1 brokerage recovery path. It does not offer a sufficient discount if earnings remain flat or the hog cycle stays hostile. The balance between those outcomes supports holding an existing position rather than starting an aggressive new one. A buy becomes more compelling in the low CNY 30s, where the investor would be paying at least 20% less than my conservative estimate of normalized value while still receiving the overseas option. A different route to a stronger conclusion would be fundamental rather than price-based: sustained feed margin above 9.5%, overseas growth above 20%, a hog-to-grain ratio above 6 and normalized receivables would justify raising the conservative value.

【Company-profile scores】

• Fundamental quality: high
• Growth: medium
• Moat: strong
• Financial soundness: medium
• Management credibility: high
• Valuation attractiveness: medium
• Risk level: medium
• Suitable investor type: long-term growth investors able to tolerate agricultural cycles

【Investment rating】

• Rating: Hold
• One-line thesis: Feed share gains and overseas growth remain intact, but hog-cycle losses leave the current price without a conservative margin of safety.
• Ideal buy price: see the dedicated line below.
• Acceptable hold price: CNY 45–61
• Clearly overvalued price: CNY 74–80
• Current-price classification: acceptable hold
• Whether to wait for a better price: yes. For new capital, CNY 30–33 is the preferred entry range unless fundamentals strengthen enough to lift conservative value. The opportunity cost is missing a possible 2027 hog recovery and continued overseas compounding.
• Target holding horizon: 3–5 years
• Expected annualized return: conservative approximately -1% to +2%; base approximately 10–14%; optimistic approximately 17–21%, including a modest cash-distribution contribution and assuming the respective earnings/multiple paths.
• Max-loss risk: roughly 50–55% in the combined pre-mortem where farming stays loss-making, feed gross margin falls toward 8.5%, EPS drops toward CNY 1.5–1.7 and the market de-rates the shares to approximately 14× earnings.
• Reassessment-trigger signals: feed gross margin below 9.0% for two reporting periods; derived feed gross profit below CNY 300 per tonne while volume also underperforms industry growth; overseas revenue growth below 10% with geographic margin below 11%; hog-to-grain ratio below 5 into 2027 despite sow reductions; receivables exceeding 10% of comparable-period revenue alongside rising credit impairment.

【Ideal Buy Price】30–33 CNY

Basis: at least approximately 20% below the CNY 37–42 conservative intrinsic-value scenario, allowing for uncertainty in farming normalization and maintenance capital requirements.

【Valuation Range】

• current: 46.24 CNY (close as of 2026-08-28)
• bear (conservative · ideal buy zone): [30, 33] CNY
• base (fair · acceptable hold zone): [45, 61] CNY
• bull (optimistic · above the clearly-overvalued line): [74, 80] CNY

The price reference is the 2026-08-28 completed close; contemporaneous August 31 sources were still showing intraday quotations, so they were deliberately excluded from the valuation anchor.

The most important primary sources for this research are Haid’s H1 2026 interim report and summary, which provide the operating, segment, balance-sheet, cash-flow and non-recurring-item evidence used in the margin bridge. The FY2025 annual report provides the multi-year financial base, feed cost structure, capex and annual-volume context. The IPO prospectus and listing announcement provide the ownership and listing history. The August 25 investor-relations record provides management’s current feed-category volumes and overseas commentary.

Industry-cycle evidence comes from the 2026 hog disclosures incorporated in Muyuan’s interim filing, the revised national breeding-sow policy, NDRC hog/corn monitoring and reported China Feed Industry Association production data. International-strategy evidence comes from Haid’s proposed Hong Kong spin-off filing and subsequent progress disclosure. Current-price and valuation references use dated market quotations, while forward earnings are compared with the post-H1 Huaan Securities forecast revision rather than stale pre-report estimates.

Other tickers mentioned

• 000876.SHE: New Hope Liuhe, the closest listed Chinese feed-plus-farming structural comparator.
• 600438.SHG: Tongwei, a major historical aquafeed competitor whose listed economics are now dominated by solar.
• 002714.SHE: Muyuan Foods, the key Chinese hog-cost and commodity-cycle benchmark for Haid’s farming exposure.
• 300498.SHE: Wens Foodstuff, another large Chinese livestock producer illustrating current hog-cycle earnings pressure.
• CPF.BK: Charoen Pokphand Foods, the principal international integrated feed-farm-food reference for Haid’s Southeast Asian expansion.

This report is based on public information and does not constitute investment advice. Markets carry risk; invest with caution.