The long-serving senior executive has stepped down, the actual controller is experiencing a marital change, and the share price of Yunnan's leading pig farming enterprise has plunged sharply.

The leading pig farming enterprise in Yunnan seems to have hit a run of bad luck.

Two days after announcing the departure of its veteran farming executive, Shennong Group (605296.SH) disclosed on September 23 that its controlling shareholder and actual controller He Zuxun was involved in a prosecuted divorce dispute case.

Public information shows that Shennong Group, founded in 1999, is a national key leading enterprise of agricultural industrialization that integrates feed production, pig breeding, slaughtering and processing, and deep food processing. It is also the largest pig farming enterprise in Yunnan Province at present.

Against the backdrop of the departure of its key capable executive and the unsettled property division in the actual controller's divorce case, it will take time to test whether Shennong Group's future operation will be affected. However, the successive changes have prompted some investors to choose to withdraw temporarily. On September 24, Shennong Group's share price opened lower and trended down, hitting the limit down during the trading session, and finally closed at 30.30 yuan per share, down 9.82%.

Family holds over 80% of shares, actual controller caught in divorce dispute

On the evening of September 23, Shennong Group announced that it recently received notice from He Zuxun, its controlling shareholder and actual controller, that the divorce dispute filed by Luo Wanyu against He Zuxun has been accepted by the People's Court of Guandu District, Kunming. The plaintiff requested the court to rule the dissolution of her marriage with He Zuxun and divide the joint property of the couple. As of the disclosure date of this announcement, the two parties have negotiated and agreed to conduct mediation first under the auspices of the court.

The announcement shows that the plaintiff Luo Wanyu does not hold any shares of the company as of now; the defendant He Zuxun is the controlling shareholder and actual controller of the company, directly holding 261 million shares of the company as of the announcement date, accounting for 49.60% of the total share capital of the company. Calculated at the closing price of 33.60 yuan per share on September 23, the market value of his held shares is about 8.77 billion yuan. After the share price drop on September 24, the market value of his held shares further shrank to 7.908 billion yuan.

If the shares held by He Zuxun are divided, will this lead to a change in the actual controller of Shennong Group? Times Finance called Shennong Group in the identity of an investor, and relevant staff said that the actual controller's family has signed a concert party agreement, with the family's shareholding ratio at around 87%. "For the overall control right, the impact is actually very limited."

The 2026 semi-annual report shows that among the top ten shareholders, He Zuxun (holding 49.74% of shares), He Qiaoguan (holding 11.48% of shares), He Baojian (holding 7.65% of shares) and He Yuebin (holding 7.65% of shares) have signed a concert party agreement, and act in concert with Yunnan Zhengdao Venture Capital Development Partnership (Limited Partnership) (holding 10.03% of shares), whose executing partners are the concert parties He Zuxun and He Qiaoguan.

Shennong Group's prospectus shows that He Zuxun, He Qiaoguan, He Yuebin and He Baojian are siblings, which means that He Zuxun's family holds a total of 86.55% equity of Shennong Group.

Regarding the progress of the divorce dispute, relevant staff said that the case is currently in the acceptance stage, and an announcement will be made if there is any follow-up progress.

Public information shows that He Zuxun, 61 years old, worked as a livestock veterinarian at the Animal Husbandry Bureau of Luliang County from 1988 to 1990, and worked in sales at CP Kangdi (Shenzhen) Co., Ltd. from 1992 to 1998. He founded Shennong Feed in 1999, and currently serves as the chairman and general manager of Shennong Group, the executing partner of Zhengdao Investment, and the executive director of Shennong Real Estate.

Shennong Group stated that as of the disclosure date of this announcement, the litigation only involves the personal shareholder equity of He Zuxun, the controlling shareholder and actual controller, and has nothing to do with the company's production and operation, and has no major impact on the company's production and operation.

Pig cycle hits the bottom, veteran farming executive leaves office

It is worth noting that in addition to the divorce lawsuit, just recently, Dun Can, Shennong Group's key capable executive, has just resigned, whose original term of office was due to expire on May 19, 2028.

Dun Can is a veteran farming executive who grew up step by step from the grassroots level in Shennong, with more than 14 years of experience in the development of Shennong. According to public information, he served as technical service manager and production manager in the Farming Division of Shennong Group from April 2012 to April 2015, and successively served as farm director of Yuezhou Sow Farm, farm director of Pule Breeding Pig Farm, general manager of the pig farming system in Luliang Region, deputy general manager of the Farming Division concurrently serving as general manager of the pig farming system in Luliang Region, and general manager of Guangxi Daxin Shennong Agriculture and Animal Husbandry Co., Ltd. from May 2015 to June 2021.

The announcement on the evening of September 21 mentioned that Mr. Dun Can applied to resign from his positions as director of the 5th Board of Directors, member of the Strategy and ESG Committee of the Board of Directors, and vice general manager of the company due to personal reasons. After his resignation, Dun Can will no longer hold any position in the company.

The relevant person mentioned above also said that this is related to the internal senior management rotation of the company, as well as Dun Can's other work ideas and career plans.

Against the backdrop of the departure of the core backbone of the farming business and the actual controller being involved in the divorce lawsuit, Shennong Group's own operation has also fallen into losses due to the continued downturn of the pig cycle.

Wind data shows that Shennong Group achieved operating revenue of 2.489 billion yuan in the first half of 2026, down 11.02% year on year; the net profit attributable to shareholders was a loss of 809 million yuan, down 308.74% year on year, turning from profit to loss. This is also the largest semi-annual loss of Shennong Group since the African swine fever outbreak in 2018.

In this context, high-quality cost reduction remains an important way for Shennong Group to cross the pig cycle.

It is understood that the total cost of pig breeding of Shennong Group in the first half of this year is 12 yuan per kilogram, which is lower than that of last year (12.3 yuan per kilogram). The main reason for the limited cost reduction may be that the cost of feed raw materials in Yunnan region where the company is located is relatively high. Previously, Jiang Hong, the Board Secretary, said at the 2026 semi-annual report conference call that excluding the impact of the 0.2 yuan per kilogram rise in feed cost, the company's actual cost reduction since the beginning of this year has reached 0.5 yuan per kilogram (that is, the cost under the breeding assessment calibre has dropped to 11.8 yuan per kilogram). "The company is confident to achieve the annual cost target of 11.5 yuan per kilogram (assuming the raw material price remains the same as last year)."

Regarding the future cost reduction space and management priorities, Shennong Group mentioned in the investor relations activity record form that the company's cost will have continuous reduction space in the next 2 to 3 years, but it will decrease in a stepwise manner. Measures such as pig breed improvement have implementation cycles, and after one round of optimization is completed, there will be a plateau period before further reduction. If the raw material price goes down, the cost reduction space will be further expanded. In the future, optimized pig genetics, refined management, improved personnel efficiency and full-capacity operation will be the main priorities, and all work will be carried out step by step to steadily improve cost and operation efficiency on a quarterly and annual basis.

This article is from the WeChat Official Account "Times Finance APP" (ID: tf-app), written by Zhou Li, authorized to be published by 36Kr.