SMAC(SH:600073) Guoxin Securities·2025-06-22 15:25Investment Rating - The industry investment rating is "Outperform the Market" (maintained) [2][6] Core Viewpoints - The report anticipates a turning point in the beef cycle in 2025, with a continued rise in meat prices expected until 2027, driven by supply adjustments and improved market conditions [4][16] - The domestic beef and milk prices have diverged, with the beef-to-milk price ratio reaching a historical high of 20.97, indicating potential for accelerated dairy cow culling and a subsequent recovery in raw milk prices [3][20] - The report highlights that the domestic beef market is expected to tighten due to reduced supply and import pressures, leading to a sustained upward trend in beef prices [11][16] Summary by Sections Beef Market Outlook - The report projects that the beef market will experience a significant recovery starting in 2025, with prices expected to rise until 2027 due to supply adjustments and reduced losses among farmers [5][16] - The current beef price has been under pressure, with a cumulative decline of nearly 25% from the peak in 2023, but the report suggests that the market is poised for recovery [5][10] Dairy Market Outlook - The raw milk market has been underperforming, with prices dropping below cash costs, but improvements are anticipated in the second half of 2025 as supply and demand dynamics shift [17][25] - The report notes that the culling of dairy cows will provide additional beef supply, reinforcing the interconnectedness of the beef and dairy markets [19][20] Investment Recommendations - The report recommends focusing on companies directly benefiting from the beef market recovery, such as Bright Meat Industry, and suggests monitoring dairy farming companies like Yuran Dairy, Modern Farming, and China Shengmu for potential performance recovery [4][26]