BAF Q2 2026 Profit Drops 50% as Hog Prices Fall; Sector Under Pressure

Overview

BAF Vietnam Agriculture JSC (BAF) reported a 50% year-on-year decline in Q2 2026 net profit to VND 105 billion, despite a 61% increase in hog sales volume. The company attributed the drop to lower average selling prices and higher costs. Other major pig farming companies, including Dabaco Vietnam Group (DBC), Hoa Phat Agricultural Development (HPA), and Masan MeatLife (MML), also reported significant profit declines for the quarter.

Key Facts

• BAF’s Q2 2026 net profit fell 50% to VND 105 billion, while H1 revenue reached VND 3,899 billion, exceeding its half-year plan by 5%.
• BAF sold 532,000 hogs in H1 2026, up 61% year-on-year.
• BAF’s average selling price in Q2 was VND 63,000–65,000/kg, down from VND 65,000–70,000/kg in the same period last year.
• DBC’s Q2 net profit dropped 42.9% to VND 289 billion, with H1 profit down nearly 35% to VND 663 billion.
• HPA’s Q2 net profit fell 43% to VND 303 billion; H1 profit was VND 648 billion, down 31%.
• MML’s Q2 net profit decreased 23% to VND 191 billion, despite a 15% revenue increase to VND 2,683 billion.
• Vietnam’s hog herd grew 2.2% in H1 2026 and 2.6% by end-July 2026, according to the Ministry of Agriculture and Environment and the General Statistics Office.

What Happened

In regulatory filings to the State Securities Commission on July 30, BAF explained that its Q2 average selling price fell to VND 63,000–65,000/kg from VND 65,000–70,000/kg a year earlier. The company also cited higher interest expenses due to rising market rates and increased fixed costs from newly operational farms that have not yet reached optimal efficiency.

Dabaco, in a filing to HOSE on July 28, said its feed, poultry, and vegetable oil subsidiaries performed better than last year, but pig farming operations dragged down consolidated results due to lower hog prices. HPA attributed its revenue decline to deliberate herd size adjustments and retention of breeding stock for expansion. MML, the smallest decline in the group, saw revenue grow but margins compress.

Market Context

All four companies trade on HOSE: BAF closed at VND 32,600, DBC at VND 17,400, HPA at VND 28,100, and MML at VND 29,400 on August 28, 2026. The sector faces a supply glut: the national hog herd expanded 2.2% in H1 and 2.6% by end-July, while pork imports also rose—Q2 imports reached 271,100 tonnes worth USD 810.09 million. This oversupply is pressuring hog prices and squeezing margins across the industry.

Strategic Significance

For long-term investors, the earnings miss highlights the cyclicality of Vietnam’s pig farming sector. Companies that expanded aggressively, like BAF, are now absorbing higher fixed costs and interest expenses as prices soften. The divergence between BAF’s volume growth and profit decline suggests that scale alone does not protect margins in a downcycle. DBC’s feed business outperformance offers a partial hedge, but pig farming remains the swing factor. The sector’s ability to manage herd expansion and cost control will determine profitability as supply normalizes.

What to Watch

• Q3 2026 earnings reports from BAF, DBC, HPA, and MML, expected in October, to see if profit declines narrow or widen.
• Monthly hog price data from the Ministry of Agriculture and Environment for signs of price stabilization.
• Pork import volumes and any trade policy changes affecting imports.
• BAF’s progress on new farm efficiency and interest cost trajectory.
• Any government measures to manage hog supply or support farmers.