Muyuan Foods (SZ:002714) Dongxing Securities·2025-08-18 03:09Investment Rating - The industry investment rating is "Positive" [5] Core Insights - In July, pig prices peaked and then declined, with the average prices for piglets, live pigs, and pork at 35.73 CNY/kg, 14.91 CNY/kg, and 25.37 CNY/kg respectively, showing month-on-month changes of -4.09%, +1.72%, and +0.31% [1][16] - The supply side saw a significant impact from the supply rhythm, with a notable increase in the number of pigs being sold by smallholders, leading to supply pressure [19] - The demand side faced challenges due to weak consumption during the summer heat, resulting in sluggish sales for slaughterhouses [19] - The Ministry of Agriculture and Rural Affairs reported a slight increase in the number of breeding sows, indicating a potential stabilization in supply [19][24] - Policy measures aimed at reducing production capacity and controlling weight have begun to show effects, with expectations for a gradual reduction in industry capacity [24][25] Summary by Sections Industry Supply and Demand - July pig prices were influenced by supply dynamics, with a peak followed by a decline due to increased selling by smallholders and controlled sales by larger farms [19] - The average price of live pigs fell to 13.82 CNY/kg by August 11 [1][16] Production Capacity Trends - The number of breeding sows was reported at 40.43 million, with a slight month-on-month increase of 0.02% [19][24] - Data from various sources indicated a halt in growth for breeding sows for the first time since February [19][24] Policy and Regulatory Environment - Recent policies have focused on "reducing production capacity, controlling weight, and regulating secondary fattening," which are expected to stabilize the market in the long term [24][25] - Stricter environmental regulations are anticipated to pressure smaller farms, leading to the elimination of outdated production capacity [25] Market Performance of Listed Companies - In July, the average sales prices for major companies like Muyuan Foods, Wens Foodstuff, and New Hope Liuhe showed slight increases, with prices at 14.30 CNY/kg, 14.58 CNY/kg, and 14.44 CNY/kg respectively [9][32] - The total sales volume for listed companies decreased by 5.30% month-on-month, with notable declines in companies like Muyuan Foods [33][36] Profitability and Cost Analysis - The cost of production is a critical factor, with Muyuan Foods reporting a cost of 11.90 CNY/kg in July, indicating a competitive advantage over peers [41][42] - The profitability of listed companies is expected to remain strong, with significant year-on-year growth in net profits anticipated for the first half of 2025 [44][47]