Guolian Minsheng Securities·2025-09-05 07:53Investment Rating - Investment recommendation: Outperform the market (maintained) [8] Core Viewpoints - The report highlights that as of July, the number of breeding sows in China decreased to 40.42 million heads, a decline of 10,000 heads month-on-month, while the number of sows eliminated increased by 2.1% [5][16] - The report emphasizes the need for strict implementation of production capacity control measures, including reasonable elimination of breeding sows and reduction of breeding sow inventory [5][16] - The report recommends focusing on high-quality breeding companies with significant cost advantages and high slaughter realization rates, specifically mentioning Muyuan Foods and Wens Foodstuffs [5][12] Summary by Sections 1. Changes in Breeding Sow Inventory in July - The breeding sow inventory in July showed a month-on-month decrease, with a total of 40.42 million heads reported by the Ministry of Agriculture and Rural Affairs [5][16] - The average profit per pig sold in 2025 has been 108 yuan, with continuous profitability in the pig farming sector for 15 months [5][9] 2. Future Pig Price Trends and Production Capacity Changes - The report anticipates that pig prices will face downward pressure in 2025 due to an increase in supply, with a projected weak overall price trend [24][25] - The breeding sow inventory is expected to continue to decrease, with a significant drop in net profit per pig to 21 yuan in July 2025, a 96.1% year-on-year decline [25][26] 3. Investment Recommendations - The report suggests investing in low-cost pig farming enterprises, highlighting the expected growth in pig output until at least September 2025, despite anticipated pressure on prices [26][12] - Recommended companies include Muyuan Foods and Wens Foodstuffs, along with companies in the animal health and feed sectors like Haida Group [12][26]