Minsheng Securities·2025-07-23 11:40Investment Rating - Investment recommendation: Outperform the market (maintained) [8] Core Viewpoints - The June breeding sow inventory showed a slight increase, with a total of 40.43 million sows, which is 103.7% of the normal holding capacity of 39 million sows, indicating that production capacity is still within the green and reasonable control area [5][12][31] - The Ministry of Agriculture and Rural Affairs will focus on regulating pig production capacity and stabilizing production and prices to promote stable development in pig production [5][12] - The report recommends excellent breeding companies with significant cost advantages and high output realization rates, such as Muyuan Foods and Wens Foodstuff Group, as well as post-cycle animal health and feed sectors like Haida Group [5][12][32] Summary by Sections 1. June Breeding Sow Inventory Changes - The breeding sow inventory in June showed a slight increase, with a 0.8% decrease in the number of pigs over five months old, suggesting a reduction in pig output in July and August, which is beneficial for stabilizing pig prices and farming profitability [5][16] - The June breeding sow inventory from the Ministry of Agriculture and Rural Affairs indicates a slight increase, with data showing a 0.22% increase in sample 1 and a 0.12% increase in sample 2 [10][11][18] 2. Future Pig Price Trends and Capacity Changes - The report anticipates that pig prices will face downward pressure in 2025 due to a relatively loose supply situation, with an expected increase in pig output until at least September 2025 [30][31] - The breeding sow inventory is expected to continue to decrease, with the profitability of breeding operations declining, leading to a potential reduction in production capacity [31][32] 3. Investment Recommendations - The report emphasizes the recommendation of low-cost pig farming enterprises, highlighting the expected increase in breeding sow inventory and production efficiency, while also noting the anticipated pressure on pig prices in 2025 [12][32][33]