Dekon Food and Agriculture Group (Dekon AGR) reported a sharp reversal to a net loss of RMB 1.31 billion for the six months ended 30 June 2026, against a net profit of RMB 1.23 billion a year earlier. The downturn was driven by a steep fall in hog prices that dragged gross margin to –6.4% from 18.3% in the prior-year period.
Revenue contracted 13.7% to RMB 10.09 billion, while cost of sales climbed 12.3% to RMB 10.73 billion as market hog prices tumbled 30.9% year-on-year to RMB 10.4 per kg. Segment performance was mixed:
• Pig segment – Revenue dropped 20.7% to RMB 7.83 billion, remaining the principal contributor but heavily hit by the industry downturn. • Poultry segment – Revenue slipped 4.5% to RMB 1.27 billion; average selling price rose 13.8% to RMB 14.7 per kg, sustaining segment profitability. • Ancillary products – Revenue more than doubled to RMB 984.70 million, buoyed by a 176.6% jump in slaughter volume to 0.69 million heads.
Operating loss reached RMB 1.26 billion versus a profit of RMB 1.24 billion in 1H25. Asset-write downs surged to RMB 196.69 million, reflecting net realisable value adjustments on biological assets during the price slump. Investment income, mainly from closing hog-futures positions, rose to RMB 496.66 million (1H25: RMB 68.19 million), partially offsetting operating pressure.
Liquidity indicators weakened: net operating cash outflow was RMB 594.70 million (1H25: inflow of RMB 1.74 billion); EBITDA swung to a negative RMB 728.90 million (1H25: positive RMB 1.82 billion). Cash and cash equivalents stood at RMB 5.10 billion, while interest-bearing borrowings expanded to RMB 4.97 billion, lifting the net debt-to-equity ratio to 44.1% from 18.6% at end-June 2025.
Capital expenditure reached RMB 934.00 million, chiefly for farm upgrades, productive biological assets and food-processing projects. No interim dividend was declared.
Post balance-sheet, Dekon issued US$100 million zero-coupon convertible bonds on 4 August 2026, raising US$99.70 million net for debt repayment and working-capital needs.
During 1H26 the company repurchased 1.89 million H shares for HK$125.48 million, now held as treasury shares.
Dekon maintains that efficiency gains from genetic breeding, precision nutrition and biosecurity, coupled with disciplined cost control and hedging via hog futures, remain central to navigating industry volatility.