Core Viewpoint - The company, Wens Foodstuff Group (300498), reported stable production in livestock and poultry for the year, with continuous optimization of core production indicators [1] Group 1 - The company has disclosed some relevant indicators for certain months in its investor relations activity record [1]

Core Viewpoint - The company expects a decrease in the comprehensive cost of pig farming, projecting it to be around 5.9 yuan per kilogram for the entire year of 2026, despite a slight anticipated increase in feed raw material prices [1] Group 1 - As of November 2025, the comprehensive cost of pig farming is expected to drop to between 6.1 and 6.2 yuan per kilogram [1] - The company is preparing for potential fluctuations in feed raw material prices while making its cost projections for 2026 [1]

Core Viewpoint - The company, Wens Foodstuff Group (温氏股份), provided insights into its projected average weights for live pig sales over the next few years, indicating a gradual increase in weights from 2023 to 2025 [1] Group 1: Average Weights of Live Pig Sales - The average weight of live pigs sold by the company in 2023 is approximately 238 pounds per head [1] - The projected average weight for 2024 is expected to be around 245 pounds per head [1] - For the first three quarters of 2025, the average weight is anticipated to be about 246 pounds per head [1]

Investment Rating - The report maintains a "Recommended" rating for the agriculture, forestry, animal husbandry, and fishery industry [1] Core Insights - The swine industry is entering an accelerated phase of capacity reduction, with a focus on positioning at the bottom of the market. Regulatory measures are being reinforced to stabilize pig prices, which are expected to face downward pressure in the short term due to increased market supply [3][15] - The poultry sector shows signs of fundamental improvement, with a focus on the white feather chicken breeding segment and potential price recovery in the future [4][28] - The animal health sector is closely monitoring the clinical trial progress of African swine fever vaccines, which could enhance market conditions for leading companies in the sector [5][38] - The pet industry continues to experience rapid growth, with domestic brands gaining strength and improving profitability [8][60] Summary by Sections Swine Industry - The average price of live pigs is reported at 11.53 CNY/kg, with a slight weekly increase. The number of breeding sows has decreased by 1.1% month-on-month [14][15] - Key investment recommendations include leading companies such as Muyuan Foods and Wens Foodstuffs, with additional attention on Dekang Agriculture and Shennong Group [3][15] Poultry Industry - The white feather chicken breeding segment has seen a total of 107.21 thousand sets updated from January to October 2025, with a balanced import and self-breeding ratio [4][28] - Recommended companies in this sector include San Nong Development and Lihua Shares [4][28] Animal Health - The animal health industry has faced losses for over three months, with expectations of continued low pig prices. The clinical trials for the African swine fever vaccine are a critical step towards commercialization [5][38] - Companies to watch include BioStock, Kexin Biological, and Ruipu Biological [5][38] Planting Industry - Grain prices are fluctuating, with corn prices at 2244 CNY/ton and wheat prices at 2515 CNY/ton. The pig-to-grain ratio is reported at 5.03 [44][48] - Investment suggestions focus on companies with strong positions in genetically modified seeds, such as Suqian Agricultural Development and Longping High-Tech [6][48] Feed Industry - Feed prices are experiencing fluctuations, with pig feed priced at 3.33 CNY/kg and chicken feed at 3.45 CNY/kg. The industry is expected to see increased concentration [49][50] - Recommended companies include Haida Group and He Feng Shares [49][50] Pet Industry - The pet market is projected to reach 300.2 billion CNY in 2024, with a year-on-year growth of 7.5%. The number of pet dogs and cats is also on the rise [59][60] - Recommended companies in the pet food sector include Guibao Pet, Zhongchong Shares, and Petty Shares [59][60]

Core Viewpoint - The company aims to reduce the comprehensive cost of pig farming and enhance production efficiency through various technological and management improvements while exploring growth opportunities in its pig farming business [1][2] Group 1: Cost Management and Projections - The comprehensive cost of pig farming is expected to decrease to 6.1-6.2 yuan per jin by November 2025, with a further projection of around 5.9 yuan per jin for the entire year of 2026 [1] - The company plans to focus on breeding technology, digital intelligence, production model iteration, feed nutrition optimization, and lean management to continuously improve production quality and efficiency [1] Group 2: Growth Opportunities - The company identifies growth potential primarily through optimizing existing production capacity, aiming to enhance the PSY (Pigs Sold per Year) level from the current 27 heads to over 32 heads in the future [1] - The company plans to diversify its operations by optimizing the structure of market releases, targeting that piglet sales will account for 5%-10% of total pig sales [1] - A strategic plan for black pig sales has been established, with a target of achieving a sales proportion of approximately 5% in the future [1] Group 3: Financial Position and Future Plans - The company currently has sufficient funds and a reduced debt ratio, indicating high financial security, and does not have immediate plans for a Hong Kong stock listing or new equity financing [2]

Group 1: Production and Operational Performance - The company sold a total of 3,591,000 pigs from January to November 2025, with 3,190,000 being market pigs and 401,000 piglets [2] - The total production of meat chickens reached 1.19 billion, with 200 million sold as fresh products, achieving a fresh sales ratio of 17% [2] - The company maintained a stable production of livestock and poultry, with core production indicators continuously optimized [2] Group 2: Cost Management in Pig Farming - In November, the production cost of piglets decreased to 250-260 RMB per head, with a market pig listing rate of 93.3% [3] - The comprehensive cost of raising market pigs dropped to 6 RMB per jin in November [3] - The average comprehensive cost for pig farming from January to November 2025 was between 6.1-6.2 RMB per jin, with a target of approximately 5.9 RMB per jin for 2026 [4] Group 3: Growth Strategies in Pig Farming - The company aims to enhance existing production capacity by improving PSY (Pigs Sold per Year) levels, targeting an increase of at least 1 head per year, with a future goal of exceeding 32 heads [5] - The company plans to diversify its operations, aiming for piglet sales to account for 5%-10% of total pig sales [6][7] Group 4: Chicken Farming and Market Positioning - The target for meat chicken listings in 2026 is to increase by approximately 10% from 2025 levels [10] - The company aims to enhance long-term profitability in chicken farming by increasing profit per chicken by 2 RMB, focusing on innovative marketing and product upgrades [11][12] Group 5: Financial Health and Future Plans - As of the end of Q3, the company's debt ratio was 49.4%, which is relatively low compared to industry standards, with a target to reduce it to around 48% by 2026 [14] - The planned fixed capital expenditure for 2026 is between 5-6 billion RMB [15] - The company currently has no plans for a Hong Kong stock listing or new equity financing [16] Group 6: Digital Transformation Initiatives - The company has partnered with high-tech firms to implement digital applications, significantly improving management efficiency and reducing operational costs [18] - The "Mushi Tong System" has enhanced management efficiency by 150% for remote farmers, with inventory management efficiency increasing by 300% [18]

Investment Summary - The report suggests focusing on three main investment themes for the agricultural sector in 2026: pig farming, feed and animal health, and pet food [4][5][6]. Group 1: Pig Farming - The supply-demand dynamics in the pig farming industry are improving, with a continued oversupply expected to pressure prices in the first half of 2026, leading to ongoing industry losses [4][16][19]. - The structural changes in pig farming post-African swine fever have led to increased scale and a rise in short-term farmers, resulting in narrower price fluctuations and reduced supply-demand conflicts [4][16][49]. - Cost management is crucial for pig farming companies to achieve excess returns and long-term growth, with significant differentiation expected among companies based on cost advantages [4][50][61]. - The report highlights that the valuation of the sector is at a low point, with expectations for recovery in the valuations of leading companies, particularly those with cost advantages like Muyuan Foods [5][61]. Group 2: Feed and Animal Health - The animal health sector is experiencing a weakening of its cyclical attributes, with research and innovation becoming the core focus for long-term growth [6][62][66]. - The feed market is characterized by competition in the domestic market, with an emphasis on cost control and precision management, while international markets present new growth opportunities for leading companies [6][62][66]. - The report recommends companies with strong research capabilities and cost control, such as Pulaike and KQ Bio, for long-term investment [6][62]. Group 3: Pet Food - The pet food market is expected to continue its growth despite short-term disruptions from tariffs, with domestic brands gaining market share [6][7]. - The report emphasizes the importance of adapting to consumer trends towards health and refinement in product offerings, which is likely to enhance market share and profitability for domestic brands [6][7].

Investment Rating - The industry investment rating is "Overweight" indicating that the industry is expected to outperform the overall market [4][44]. Core Insights - The report highlights a significant decline in pig prices leading to accelerated capacity reduction in the breeding sector, suggesting a left-side investment opportunity in pig farming [4][5]. - The report emphasizes the potential of the artificial cultivation of Cordyceps sinensis, with a market size exceeding 30 billion, and suggests focusing on companies involved in this sector [4][5]. - The report also notes that the pet food sector is experiencing a positive trend, with a year-on-year increase in online sales [4][5]. Summary by Sections Pig Farming - The report indicates that pig prices are currently fluctuating at a low level, with a national average selling price of 11.41 yuan/kg as of December 21, reflecting a week-on-week decrease of 1.1% [4]. - Breeding farms are facing continuous losses, with average losses per head reaching approximately 101.5 yuan for farms with fewer than 50 sows and 119.8 yuan for larger farms [4][5]. - The report recommends focusing on companies such as Muyuan Foods, Wens Foodstuff, and DeKang Agriculture for potential investment opportunities [4][5]. Pet Food Sector - The pet food industry has shown resilience, with a year-on-year growth of 17% in online sales during October and November, totaling 7.02 billion yuan [4][5]. - Specific companies like GuaiBao Pet and ZhongChong Co. have reported significant growth rates in their sales [4][5]. Chicken Farming - The report notes a rebound in the prices of white feather broilers, with the average selling price for broiler chicks at 3.39 yuan each, reflecting a week-on-week increase of 1.80% [4][5]. - The report suggests that the supply of broilers will remain ample, and it is essential to focus on leading companies in the sector [4][5]. Investment Recommendations - The report recommends a left-side investment strategy in the pig farming sector due to ongoing losses and capacity reduction [4][5]. - It also suggests monitoring the artificial cultivation of Cordyceps and the pet food market for potential investment opportunities [4][5].

Investment Rating - Industry rating: Recommended [3] Core Views - The report emphasizes the importance of the EU's anti-dumping duties on imported pork, which are expected to alleviate domestic supply pressures and stabilize prices in the pork market. The anti-dumping tax rates range from 4.9% to 19.8% and will take effect from December 17, 2025 [2][12] - The report highlights the ongoing adjustments in the pig breeding capacity, with a noted decrease in the number of breeding sows, which is expected to support price recovery in the pork market [2][12] - The report suggests that the commercialization of genetically modified seeds will accelerate, enhancing self-sufficiency in key crop varieties and benefiting companies in the seed industry [11] Summary by Sections Planting Industry Chain - The Ministry of Agriculture and Rural Affairs has initiated inspections to ensure the safety of seeds for the upcoming spring and summer planting seasons, focusing on key crops such as corn, rice, soybeans, cotton, and vegetables [11] - The report identifies companies like Beidahuang and Suqian Agricultural Development as beneficiaries in the planting sector, while companies with significant advantages in the seed industry include Dabeinong and Longping High-Tech [11] Pig Breeding - The average price of live pigs is reported at 11.64 CNY/kg, with a week-on-week increase of 1.45%. The total number of breeding sows is 39.9 million, reflecting a decrease of 1.1% month-on-month and 2.1% year-on-year [2][12] - The report recommends focusing on companies with significant cost improvements and high future output elasticity, including Li Hua Co., Muyuan Foods, and WH Group in the breeding sector, and Haida Group in the feed sector [2][12] Key Agricultural Product Data Tracking - Corn: The average price is 2351.76 CNY/ton, with a week-on-week decrease of 0.26% [25] - Wheat: The average price is 2517.30 CNY/ton, with a week-on-week increase of 0.04% [28] - Soybeans: The average price is 4014.74 CNY/ton, remaining stable week-on-week [40] - Cotton: The average price is 14950.00 CNY/ton, with a week-on-week increase of 0.67% [44] Feed and Vitamin Prices - The average price of pig feed is 2.62 CNY/kg, with no change week-on-week. The average price of chicken feed is 3.5 CNY/kg, reflecting a week-on-week increase of 0.29% [51][53]

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