Food & DrinkChina
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JOURNEY · DETAIL
New Hope Liu Yonghao: Started by selling watches and raising quail, overcame four crises to build an agricultural and livestock giant, and expanded into dairy and finance
Founded: Liu Yonghao, Liu Yongyan, Liu Yongxing, Chen Yuxin (The Four Liu Brothers) · New Hope Group Co., Ltd.
JOURNEY
Key Fields
FIELD STAMPSIndustryFood & Drink
RegionChina
ScaleGiant
ChannelOther
Origin
In 1982, Liu Yonghao, a teacher in Xinjin County, Sichuan, and his three older brothers pooled 1,000 RMB (selling personal items like watches and bicycles) to start a family farm. They chose to raise quail instead of chickens because quail have a faster turnover and lower capital requirements. The four brothers fed quail by day and self-studied breeding techniques at night. Recognizing that farmers lacked good feed, they built their own feed mill. Using 'Hope' brand feed to compete with Thailand's CP Group, they captured the market with prices 10% cheaper and high quality, transforming themselves from breeders into feed merchants.
Milestones
1982
Inception Turning Point
In 1982, the four Liu brothers pooled 1,000 RMB inGujiacun, Xinjin County, Sichuan, to found the Yuxin Breeding Farm. Initial attempts to hatch chicks failed, so they switched to raising quail. By 1986, quail inventory exceeded 100,000 birds with an annual output value of over 10 million RMB, making them famous local quail magnates and earning their first pot of gold.
1989
Transformation Transition
In 1989, after the quail market saturated, they decisively cut losses and invested millions of RMB into feed R&D. Around 1990, they built the Hope Feed Mill, waging a price war in Sichuan with prices about 10% lower than CP Group feed. By 1992, Hope Feed sales jumped to first place nationwide, completing a critical leap from farming to the upstream feed industry chain.
1995
Division Turning Point
In 1995, the four brothers divided assets by agreement. Liu Yonghao took the southern region to form Sichuan New Hope Group Co. Following the split, New Hope Group ranked first among China's top 100 feed industrial enterprises in 1996. Liu Yonghao repeatedly topped the list of China's richest people, proving that decentralization did not weaken but rather unleashed individual expansion energy.
1998
Diversification PMF
In 1998, Sichuan New Hope Agricultural Co., the predecessor of New Hope Liuhe, went public on the Shenzhen Stock Exchange. In 1999, it entered the dairy industry by acquiring Sichuan Huaxi Dairy. In 2000, as a founding shareholder, it co-founded Minsheng Bank (one of the first private banks), forming a tripartite pattern of feed, dairy, and finance. Investment returns contributed the lion's share of profits for a long period, spanning from 1998 to 2006.
2013
Massive Hog Farming Growth
After daughter Liu Chang took over as chairperson of New Hope Liuhe, the company made a heavy bet on hog farming. During the peak of the hog cycle from 2019 to 2020, it aggressively expanded capacity. In 2020, New Hope Liuhe's net profit approached 5 billion RMB, and its market value surged to a high, making it one of the most aggressive feed enterprises crossing over into hog farming. This phase lasted from 2013 to 2018.
2021
Heavy Losses Failure
Hit by a collapse in hog prices coupled with over-expansion, New Hope Liuhe recorded a net loss of approximately 9.59 billion RMB in 2021, continued losses in 2022, and further massive non-GAAP core losses in 2023. Over the three years, the hog farming segment accumulated losses exceeding 13 billion RMB, pushing group-wide liabilities close to 100 billion RMB and resulting in heavy annual interest expenses. Media described this as a thrilling slide from the richest person to the most heavily indebted. This phase lasted from 2021 to 2023.
2024
Stopping the Bleeding & Turnaround Transition
The company closed inefficient hog farms and focused on cost reduction. In 2024, it returned to profitability driven by ranking first nationwide in feed sales (annual sales around 25 million tons) and overseas business growth. Liu Yonghao publicly stated he is neither anxious nor complacent, anchoring the 2026 narrative on overseas feed capacity and the reversal of the hog cycle. This phase spans from 2024 to 2026.
Turning Points
- In 1989, proactively cutting off the peak-reached quail business to build its own feed mill, avoiding the red ocean of farming
- In 1995, the four brothers peacefully divided assets, and Liu Yonghao went solo with the southern market to build the New Hope system
- In 1996, participating in founding Minsheng Bank, upgrading industrial capital into a compound structure of industry plus finance
- In 2019, heavily betting on hog farming and hitting the cycle peak, which created the subsequent profit peak but also planted the hazard of massive losses
- After 2023, making a resolute cut by closing inefficient hog farms and refocusing strategic priorities on the core feed business and overseas markets
Failures & Pitfalls
- Initial chick-hatching failure in 1982 with massive chick mortality, forcing a shift to quail farming to survive
- In 2021, New Hope Liuhe's annual loss of about 9.59 billion RMB—its largest since going public—as aggressive hog expansion was penalized by the cycle
- From 2021 to 2023, cumulative losses in the hog farming segment exceeded 13 billion RMB, pushing liabilities close to 100 billion RMB with heavy annual interest burdens
- Multi-brand regional fragmentation in the dairy division for years, failing to create a national brand capable of head-to-head competition with Yili and Mengniu
- Quail business value hitting zero after market saturation in the late 1980s, effectively requiring the early farming system to be rebuilt from scratch
关键成功要素
- Starting with 1,000 RMB pooled by four brothers, using a family farm to validate the business model before increasing investment
- Capturing industry pain points to pivot tracks: from raising quail to selling feed, shifting from hard-earned labor income to supply chain profits
- Price-cutting predator strategy: undercutting CP Group by 10% with cost-effectiveness to break into the Sichuan market
- Family-style equity design dividing assets without splitting the enterprise, preventing internal friction from dragging down the company
- Dual-wheel drive of industry and finance, with Minsheng Bank equity providing continuous profit blood transfusions during lean feed years
- Contrarian operations of exercising restraint at cycle peaks and expanding at troughs, core to Liu Yonghao's survival philosophy over forty years
Lessons
- Farming is inherently cyclical; expansion at cycle peaks is equivalent to planting landmines in one's balance sheet
- In diversification, only businesses that generate genuine cash flow or equity returns constitute a moat; otherwise, they are liabilities
- Doing clear property-rights asset division for family businesses in advance is vastly cheaper than fighting for control afterward
- Shifting from a farmer to a shovel-seller is the most stable upward leap for agricultural entrepreneurs
- Being number one in scale does not equal being number one in profit; the national feed sales champion can still be dragged into massive losses by the hog cycle
Core Data
- firstcapital：1982 starting capital of 1,000 RMB (gathered by selling watches and bicycles) (public data basis, independent verification unverified)
- quailpeak：1986 quail inventory exceeding 100,000 birds with annual output value over 10 million RMB (public data basis, independent verification unverified)
- feedrank：1992 Hope Feed sales ranked first nationwide, group annual feed sales around 25 million tons scale (public data basis, independent verification unverified)
- recordloss：2021 New Hope Liuhe net loss of approximately 9.59 billion RMB (public data basis, independent verification unverified)
- pigloss3yr：2021 to 2023 cumulative hog farming losses exceeding 13 billion RMB (public data basis, independent verification unverified)
- peakprofit：2020 New Hope Liuhe net profit of approximately 4.98 billion RMB (public data basis, independent verification unverified)
- debtpressure：Group-level total liabilities once approaching the 100 billion RMB scale (public data basis, independent verification unverified)
- listedcompanies：Controlling shareholder of New Hope Liuhe and other listed companies, founding shareholder of Minsheng Bank (public data basis, independent verification unverified)
Competitors / Peers
In the core feed business, New Hope has long competed head-to-head with CP Group, Haid Group, and Twin-Twins Group, with Haid exhibiting stronger profit resilience through aquatic feed and fine operations; in the hog farming track, Muyuan Foods navigates cycles via a self-breeding and self-raising low-cost model, while Wens defends South China through its company-plus-farmer model, leaving New Hope Liuhe's cost control and debt levels at a disadvantage. On the dairy side, suppressed by the duopoly of Yili and Mengniu, New Dairy can only pursue a regional fresh milk differentiation path. Overall, its strengths lie in supply chain breadth and financial equity backing, while its weakness is that single-business profitability is weaker than specialized competitors.