Muyuan Foods (SZ:002714) Sou Hu Cai Jing·2025-08-20 17:01Core Viewpoint - The financial performance of Muyuan Foods has shown explosive growth, with a net profit of 10.53 billion yuan, a staggering increase of 1169.77% year-on-year, yet the stock price has recently declined by 3.24% despite a 25% increase this year, raising questions about the sustainability of this growth and the market's reaction to it [1][3]. Group 1: Performance Highlights - The company sold 38.39 million pigs in the first half of the year, a year-on-year increase of 18.5%, significantly outperforming its closest competitor, Wens Foodstuffs, which sold 17.93 million pigs [3]. - The cost of raising pigs has been reduced from 13.1 yuan per kilogram at the beginning of the year to 12.1 yuan per kilogram by June, with a target of reaching 11 yuan by the end of the year, allowing the company to achieve a profit margin of nearly 2 yuan per kilogram at current pork prices [4]. - The company announced a dividend of 9.32 yuan per 10 shares, totaling 5 billion yuan, resulting in a dividend payout ratio of 47.5% of its net profit, with plans to use the remaining funds to reduce debt by 10 billion yuan [4]. Group 2: Stock Price Dynamics - The market had already priced in the expected performance, as the company had announced its profit surge in early July, leading to a peak stock price of 50 yuan and a price-to-earnings ratio of 15, which has since dropped to 47.5 yuan (PE of 10.5) [5]. - Concerns about a "weak cycle" in the pork market have emerged, with the company indicating that future pork prices are expected to fluctuate between 14 and 16 yuan per kilogram, suggesting that the era of high profits may be over [6]. - The company's plans to list H-shares could potentially pressure the A-share price if the H-share pricing is lower than expected, as foreign investment currently accounts for only 0.25% of the company's shares [6]. Group 3: Investment Strategies - For short-term investors, a key resistance level is at 49.3 yuan, with a significant volume needed to confirm a breakout; a stop-loss should be set at 45.6 yuan [7]. - For medium-term investors, the focus should be on whether the cost can drop to 11 yuan; if achieved, net profit could increase by 20%, with a target price of 55 yuan [7]. - Long-term investors should monitor the company's technological advancements in pig farming, as achieving a cost of 11 yuan per kilogram could position the company as a leader in the industry, akin to "Ningde Times" in its sector [7].