Core Viewpoint - The report from China Merchants Securities maintains a "strong buy" rating for Dekang Animal Husbandry (02419), forecasting significant net profit growth from 2025 to 2027 due to favorable policies and cost advantages in livestock production [1]. Group 1: Company Performance - Dekang is expected to achieve a net profit of 14.4 billion, 30.9 billion, and 50.8 billion yuan for the years 2025, 2026, and 2027 respectively, with EPS projected at 3.7, 8.0, and 13.1 yuan [1]. - The company anticipates a pre-adjusted net profit of 13 to 15 billion yuan in 2025, with the second half of the year expected to contribute 0.27 to 2.27 billion yuan [1]. - The company has a leading cost advantage in livestock production, with a projected output of 10.83 million pigs in 2025, representing a year-on-year increase of 23% [1]. Group 2: Industry Trends - The pig industry is experiencing a policy-driven capacity adjustment, which may lead to a reduction in breeding sows and an increase in future pig price expectations [2]. - The poultry industry is entering an upward cycle, with the supply of parent breeding chickens at historically low levels, setting the stage for future price increases [2]. - Dekang's long-term focus on cost reduction has positioned it among the top tier in the industry, with production costs for pigs around 12 yuan per kilogram [3].