“Sky-high divorce” raids Shennong Group

Zebra Consumption Shen Tuo

When the Mid-Autumn Festival is full of flowers and the moon is full, it is the moment of turmoil for He Zuxun, the “Pig King of Yunnan”.

In just two trading days, Shennong Group disclosed two major events in succession – core executive Dun Can resigned early, followed closely by the fact that the actual controller He Zuxun was sued for divorce by his spouse and advocated the division of joint property between husband and wife.

As soon as the news came out, it quickly stirred up the secondary market, the company’s stock price fell sharply, and related topics became hot searches on Baidu.

As a leading local agricultural and animal husbandry enterprise in Yunnan, Shennong Group has built a complete industrial chain of feed, breeding, breeding, slaughtering, and food deep processing over more than 20 years. At present, enterprises are at the juncture of deep adjustment in the pig cycle. They must not only bear the fundamental pressure brought by the industry downturn, but also face the external impact caused by this divorce dispute.

Over the past 27 years, the growth of Shennong Group has been highly tied to He Zuxun personally. Nowadays, multiple factors such as the outcome of judicial mediation, personal energy allocation, and the pace of corporate development will all affect the company’s subsequent development.

The time to test He Zuxun has arrived.

雙重暴擊

He Zuxun, 61, did not have a peaceful Mid-Autumn Festival.

On the eve of the holiday, core executives resigned early, and the actual controller’s divorce proceedings followed one after another, which brought a double impact to Shennong Group.

On September 22, the company announced that director and deputy general manager Dun Can resigned more than a year in advance. Duncan has worked at Shennong Group for 14 years, and has gradually been promoted from a grassroots technical position to a core executive in the breeding business. He has personally experienced and led the entire process of the company’s pig breeding scale expansion from 100,000 to one million pigs. In 2025, his annual salary will be 1.5319 million yuan, far exceeding the actual controller He Zuxun.

The market has not yet fully digested the impact of the executive changes, and another major announcement followed.

After the market closed on September 23, Shennong Group (605296.SH) disclosed that controlling shareholder and actual controller He Zuxun was sued by his spouse Luo Wanyu, requesting the dissolution of the marriage and property division.

On September 24, the company’s stock price plummeted 9.82%, and its market value evaporated by 1.736 billion yuan in a single day.

As of the announcement date, He Zuxun directly held 261 million shares of Shennong Group, accounting for 49.60% of the company’s total share capital, corresponding to a market value of nearly 8 billion yuan.

This is also the first divorce lawsuit involving a huge amount of equity in a listed company among A-share listed pig breeding companies in recent years.

Nine years ago, Kunming City, where the Shennong Group is headquartered, also had a high-profile divorce case involving the division of property between Ruan Hongxian, a listed pharmacy company, and Liu Qiong, a couple. In comparison, there are significant differences between the two wealthy marriages.

First of all, Ruan Liu and Ruan Liu had agreed upon a property division plan in advance before it was announced by the listed company. However, this time Luo Wanyu took the initiative to sue, and the case entered the court for pre-trial mediation and subsequent litigation processes, indicating that the two parties had not reached a prior consensus, and the final result relied entirely on judicial procedures.

From the perspective of equity basis, both Ruan and Liu held equity in the listed company before the divorce. The divorce was mainly about the dissolution of the joint control relationship; while Luo Wanyu held 0 shares in the listed company, and the dispute focused on the equity registered in the name of He Zuxun, with higher uncertainty.

The divorce proceedings of He Zuxun and Luo Wanyu come at a time when the pig industry cycle is at a low point, and the company has already suffered large losses and financial pressure is rising. In this context, the outbreak of family disputes can easily induce a series of secondary risks.

關鍵先生

As the leader in pig breeding in Yunnan, Shennong Group has a stable operating style in the past. It is an agricultural and animal husbandry enterprise that relies heavily on the industrial capabilities of actual controllers to grow.

He Zuxun graduated from the veterinary medicine major of South China Agricultural University in 1988 and was assigned to work as a veterinarian in the Luliang County Animal Husbandry Bureau under the jurisdiction of Qujing, Yunnan.

In 1992, he resigned and joined Zhengda Kangdi (Shenzhen), known as the “Whampoa Military Academy” in the feed industry, and was responsible for feed sales.

This career experience allowed him to systematically learn the operational thinking of the entire industry chain such as modern feed production and enterprise management, and form a mature industrial layout concept, laying the foundation for building an industrial layout in the future.

He Zuxun’s entrepreneurial path is similar to Lin Yinsun, the founder of Zhengbang Technology. Both started from the pig feed business and gradually extended to the pig breeding industry.

In 1999, He Zuxun returned to Kunming and founded Shennong Feed, entering the upstream of the pig industry;

In 2002, the company entered the field of pig breeding, firmly adhered to the self-propagation and self-support model, and promoted the expansion of the breeding business;

In 2005, it acquired Qujing Food Company, entered the field of pig slaughtering, and created the local fresh food brand “Shen Nong Guangxin Pork” to hedge against industry cycles by internally digesting self-raised pigs;

The original breeding pig farm was launched in 2017 until the Chengjiang food factory was put into operation in 2023, completing the last piece of the industrial puzzle of deep food processing.

Relying on the accumulation of front-line breeding business, He Zuxun took the lead in building a self-propagation and self-supporting and full industry chain system to build the company’s core competitive moat. As chairman and general manager at the same time, he is deeply involved in the formulation and execution of corporate strategies, and has a decisive voice in the development process of the company.

In the process of entrepreneurship and development, Shennong Group has obvious characteristics of a family business: He Zuxun is the leader, and the He brothers and sisters participate collaboratively. Among them, He Yuebin and He Baojian were engaged in individual feed operations in their early years. He Qiaoguan has experience in accounting, finance and other fields. The core members of the family formed the backbone of the company’s early entrepreneurship.

He Zuxun’s spouse, Luo Wanyu, has not participated in the company’s business operations, nor does he hold any position or shares.

As of the end of June, He Qiaoguan, He Baojian, He Yuebin and Zhengdao Venture Capital collectively held 36.81% of the company’s equity. Even if the equity in He Zuxun’s name is split in half, the He family will still firmly control Shennong Group.

艱難時刻

In May 2021, after Shennong Group successfully landed on the main board of the Shanghai Stock Exchange, it expanded production capacity and promoted the expansion of its pig business counter-cyclically.

The company’s IPO raised nearly 2.1 billion yuan, most of which was invested in seven piglet expansion projects, three high-quality pig fattening projects, an annual output of 500,000 tons of feed and biosecurity projects, and an annual slaughtering project of 500,000 pigs.

In the year of listing, domestic pig prices fell from highs, and the operating pressure of the pig breeding industry gradually emerged. Even so, Shennong Group still achieved steady profits.

In 2023, the oversupply phenomenon in the pig breeding industry became prominent, and Shennong Group also suffered its first loss since its listing, with a net profit loss of 401 million yuan attributable to the parent company for the year.

In 2024, the industry will see a phased upward trend, with the company’s pig slaughter volume reaching 2.2715 million. Coupled with the cost advantage brought by self-breeding and self-raising, the company turned around losses in one fell swoop and achieved a net profit attributable to the parent company of 687 million yuan, the best performance since its listing.

However, industry risks are coming faster than imagined.

In 2025, pig prices are on a roller coaster, and the industry is generally under pressure. The company’s pig slaughter volume soared to 3.0742 million heads, but the volume increased and the price fell. The net profit attributable to shareholders for the year fell to 339 million yuan, a year-on-year decrease of 50.65%.

In the first half of 2026, pig prices continued to be lower than the industry’s breeding cost line. Shennong Group achieved operating income of 2.489 billion yuan, a year-on-year decrease of 11.02%, and a net profit loss of 809 million yuan attributable to the parent company.

In such an environment, coupled with the departure of core executives and the divorce of the actual controller, Shennong Group is in the most difficult stage since its listing.