(Yicai) Aug. 21 -- Muyuan Foods’ shares jumped after the major Chinese pig breeder said profit soared almost 13 times in the first half of the year, largely as a result of cost-cutting measures.

Muyuan Foods [SHE: 002714] closed up 5.7 percent at CNY50.21 (USD7) per share in Shenzhen today. The stock has gained 31 percent so far this year.

Net profit surged 1,170 percent to CNY10.53 billion (USD1.46 billion) in the six months ended June 30, the Nanyang-based company said in a trading report published yesterday. Operating revenue climbed 35 percent to CNY76.463 billion.

The Chinese government recently rolled out broad controls on hog breeding to help balance supply and demand and keep prices steady, company officials said at an earnings briefing. In line with this, Muyuan is having to reduce its breeding-sow herd, which is expected to shrink to 3.3 million by year-end.

The company also said it has set up an overseas business team and is actively assessing markets abroad, with its recent research having pointed to promising opportunities. It has already built a lucrative partnership with farming giant BAF Vietnam.

Muyuan said it will take various approaches to develop its international business based on local conditions. In addition to the asset-light model, the company will also explore building new production capacity abroad and pursuing targeted mergers and acquisitions.

Pork prices have been falling since 2021, causing losses at hog breeders. Muyuan saw its earnings plunge 75 percent to CNY6.904 billion (USD960 million) that year.

Prices recovered in the third quarter of 2022 and the company logged a CNY13.3 billion profit, only for prices to fall again the following year, handing it a CNY4.3 billion loss. With price swings last year and the company demonstrating strong cost control, it managed to make a net profit of CNY17.9 billion.

Editor: Tom Litting