Group 1 - The core viewpoint of the article indicates that the company, New Hope (000876.SZ), has made progress in reducing pig farming costs as planned for 2025 [2] - As of December 2025, the total cost of raising pigs is approximately 12.2 yuan per kilogram [2] - For 2026, the company aims to continue improving production management to further lower costs [2]

Summary of Shennong Group Conference Call Company Overview - **Company**: Shennong Group - **Industry**: Pig Farming Key Points and Arguments Production and Cost Targets - **Expected Output**: Shennong Group anticipates a production volume of 3.5 million pigs in 2025, with a focus on controlling total costs below 12 CNY/kg, aiming for 11.5 CNY/kg [2][6] - **Regional Focus**: The majority of output will be concentrated in Yunnan and the Guangxi and Guangdong regions, with an expected output of nearly 1 million pigs from these areas [2][7] Cost Management Strategies - **Cost Reduction Measures**: The company plans to lower farming costs through several strategies: - Improving PSY (Pigs Weaned per Sow per Year) to 30.3 heads, with a target of over 30 heads next year - Maintaining a feed-to-meat ratio around 2.45 - Achieving a survival rate exceeding 85% - Stabilizing weaning costs at approximately 270 CNY [2][4][9][8] Market Conditions and Price Forecast - **Current Market Trends**: The overall trend for pig prices is declining after a profitable period of about 18 months, with farmers experiencing losses for about a quarter [3] - **Future Price Expectations**: The average pig price for 2026 is expected to be weaker than in 2025, ranging between 12 to 13 CNY/kg, with no significant price rebound anticipated in the first half of the year [15] Production Indicators - **Key Production Metrics**: As of November, the total cost was 12 CNY/kg, with a weaning cost of 269 CNY per head and a PSY of 30.3 heads [4][8] Dependency on Contract Farming - **Contract Farming Model**: Currently, about 70% of production is through contract farming, with plans to increase this to 80% or even 90%. There are no plans for new self-built capacity [5][16] Financial Performance of Other Segments - **Other Business Segments**: - Feed sales have decreased, yielding only slight profits - Slaughtering operations generate annual profits in the tens of millions - The deep processing segment is currently in a strategic loss phase but aims for breakeven within five years [20] Disease Control and Impact - **Disease Management**: The company has maintained stable disease control, with minimal impact from African swine fever and blue ear disease on production [12][14] Capital Expenditure and Dividend Policy - **Capital Expenditure**: The budget for capital expenditure in 2026 is expected to remain stable without significant fluctuations [18] - **Dividend Policy**: Dividends will be considered annually based on operational performance, ensuring funds are available for shareholder needs [19] Regional Cost Differences - **Cost Variations**: There are minor differences in farming costs across regions, with the best facilities achieving costs below 11.5 CNY/kg, while average facilities maintain around 12 CNY/kg [11] Raw Material Price Considerations - **Cost Targets and Raw Materials**: The cost targets for 2026 are based on raw material prices remaining stable compared to 2025, with adjustments made if prices fluctuate significantly [22]

Core Viewpoint - The company has significantly reduced its costs, leading to a competitive advantage over peers, primarily due to improvements in production performance and a decrease in period expenses [1] Group 1: Cost Reduction Factors - The complete cost of pig farming for the company is approximately 11.3 yuan/kg as of October 2025 [1] - The main reasons for the cost reduction include enhanced production performance and lower period expenses [1] - Despite a slight increase in feed prices since the beginning of the year, the company's continuous improvement in production performance and management has resulted in a month-on-month decline in total farming costs [1] Group 2: Future Strategies - The company plans to focus on business and organizational management to seek innovative breakthroughs in pig farming technology [1] - There will be ongoing efforts to promote and replicate successful management experiences across internal operations to improve the performance of underperforming farms [1] - The aim is to enhance overall efficiency and further reduce costs through effective internal management [1]

Industry Overview - The supply of breeding sows is relatively abundant, with the national breeding sow inventory at 40.35 million heads as of September 2025, exceeding the normal holding level of 39 million heads by 3.5%. This indicates a relatively ample supply foundation. Additionally, improvements in production efficiency among pig enterprises may further increase pork supply. It is expected that the average price of pigs may decline in Q4 2025 to H1 2026 due to weak demand and increased output from leading pig enterprises [2] Company Performance - The company has continuously strengthened its production and operational management, resulting in a further cost advantage. The complete cost of fattening pigs has decreased to 12.4 yuan per kilogram in Q3 2025, down by 1.1 yuan per kilogram year-on-year. Key cost control measures include disease management, genetic improvement of breeding stock, and better feed-to-meat ratio management, with the feed-to-meat ratio improving from an average of over 2.5 last year to 2.43 by September this year [3] - The company's debt ratio remains stable, with an asset-liability ratio of 27% as of Q3 2025, down by 0.32 percentage points from the end of 2024. The company aims to keep this ratio below 40%. Capital expenditure is projected to be around 1 billion yuan this year, with plans in place for next year's credit and funding to ensure stable cash flow [3] Profit Forecast and Valuation - The company maintains its forecast for net profit attributable to shareholders for 2025-2027 at 518 million, 459 million, and 2.013 billion yuan, respectively. The corresponding BVPS is projected to be 10.20, 10.82, and 14.40 yuan. Considering the company's leading breeding costs and stable financial condition, a valuation of 4.5 times PB for 2025 is assigned, resulting in a target price of 45.90 yuan [4]

Core Viewpoint - The price of live pigs has dropped significantly, falling below 12 yuan/kg for the first time this year, with a year-on-year decline of over 30% [1][2] Group 1: Price Trends - In October, the average price of live pigs in the national market also fell below 12 yuan/kg, with no clear signs of a price recovery [1] - The continuous decline in pig prices is primarily due to an oversupply in the market [1] Group 2: Cost and Profitability - The overall cost of pig farming has decreased due to advancements in large-scale production, breeding technology, and refined management practices [1] - Some companies have reported that their total breeding costs have fallen below 12 yuan/kg, with the best-performing farms achieving costs below 11 yuan/kg [1] - Despite falling prices, companies with cost advantages are still able to maintain profitability and have no internal motivation to reduce production [1] Group 3: Impact on Companies - The ongoing decline in pig prices is beginning to significantly impact the revenue and profits of related companies, leading to a substantial drop in industry profitability [2] - Among 12 A-share listed companies in the pig farming sector, 6 reported a year-on-year decline in revenue for the first three quarters, while 9 companies saw a drop in net profit, with over half experiencing a profit cut by 50% [2] - Some companies are nearing a loss situation, with a few already reporting a shift from profit to loss compared to the previous year [2] Group 4: Industry Outlook - If pig prices continue to decline sharply, widespread losses among pig farming companies may occur, which would negatively affect sustainable operations and the overall development of the industry [2] - Government guidance is deemed necessary to respect market rules, while companies need to enhance technology and management to ensure quality and cost control, promoting high-quality industry development [2]

Investment Rating - The investment rating for the company is "Buy" and is maintained [6]. Core Views - In the context of rising costs and declining prices, the company's breeding business turned to a loss in Q3 2025. The company continues to achieve high growth in its output scale, with a breeding sow inventory of 180,000 heads at the end of Q3, supporting the annual target of 4 million heads [2][4]. - The company reported a revenue of 5.639 billion yuan for the first three quarters of 2025, a year-on-year increase of 43%, but the net profit attributable to the parent company was 107 million yuan, down 59% year-on-year. In Q3 alone, the revenue was 1.922 billion yuan, a year-on-year increase of 12%, but the net profit turned to a loss of 74 million yuan [4][2]. - The average selling price of live pigs in Q3 was approximately 13.35 yuan/kg, a decrease of 7% from Q2, leading to an average loss of 32 yuan per head sold. The breeding business is expected to incur a loss of approximately 31 million yuan in Q3 [9][4]. - The company is expected to achieve net profits of -208 million yuan and 297 million yuan for 2025 and 2026, respectively, indicating potential recovery [2]. Summary by Sections Financial Performance - For the first three quarters of 2025, the company achieved a total revenue of 5.639 billion yuan, with a net profit of 107 million yuan, reflecting a significant decline in profitability [4]. - In Q3, the company reported a revenue of 1.922 billion yuan, but incurred a net loss of 74 million yuan, marking a shift from profitability to loss [4]. Production and Sales - The company maintained a high output scale, with approximately 2.93 million pigs sold in the first three quarters, a year-on-year increase of 64%. The Q3 output was about 1.02 million pigs, a 46% increase year-on-year [9][4]. - The breeding sow inventory remained stable at 180,000 heads at the end of Q3, supporting the annual output target [2]. Cost and Efficiency - The company is focusing on improving production efficiency, with a PSY (Pigs per Sow per Year) of approximately 29 and a feed-to-meat ratio of 2.57, maintaining industry-leading levels [9]. - The company anticipates significant cost reduction opportunities in the future, particularly as production performance improves [2].

Investment Rating - The report maintains a "Strong Buy" investment rating for the company [1][3]. Core Insights - The company continues to improve its breeding costs, leading to a significant increase in per-head profitability compared to the industry average. The cash flow has improved, and the debt-to-asset ratio is steadily declining. Due to industry losses and policy adjustments, it is expected that the reduction in sow capacity will accelerate, potentially raising the average pig price in 2026. The company is well-positioned to benefit from its low-cost advantage [1][7]. Financial Data and Valuation - Total revenue for 2023 is projected at 110.861 billion yuan, with a year-on-year decrease of 11%. The operating profit is expected to be -3.732 billion yuan, reflecting a significant decline of 125%. The net profit attributable to shareholders is forecasted at -4.263 billion yuan, down 132% year-on-year. The earnings per share (EPS) for 2023 is estimated at -0.78 yuan, with a price-to-earnings (PE) ratio of -65.6 [2][18]. - For 2024, total revenue is expected to rise to 137.947 billion yuan, with a growth rate of 24%. The operating profit is projected at 20.011 billion yuan, and the net profit attributable to shareholders is forecasted at 17.881 billion yuan, indicating a significant recovery [2][18]. Performance Overview - In the first three quarters of 2025, the company achieved a revenue of 111.8 billion yuan, a year-on-year increase of 16%, and a net profit of 14.8 billion yuan, up 41%. In Q3 2025, the revenue was 35.3 billion yuan, down 11% year-on-year, while the net profit was 4.25 billion yuan, down 56% year-on-year. The company’s performance aligns with expectations [7][8]. - The company has successfully reduced its breeding costs from 13.1 yuan/kg at the beginning of the year to 11.6 yuan/kg by September 2025, with expectations to further decrease to 11 yuan/kg by year-end [7][8]. Shareholder Information - The total share capital is 5,463 million shares, with 3,811 million shares listed for trading. The total market capitalization is approximately 279.6 billion yuan, and the circulating market capitalization is about 195.1 billion yuan. The return on equity (ROE) is reported at 28.9%, and the debt-to-asset ratio stands at 55.5% [3][18].

Group 1 - The core viewpoint of the article highlights that despite the overall recovery in the pig farming industry, Tangrenshen (002567.SZ) continues to face losses in the first half of the year, raising concerns among investors [1][2] - The company’s self-raised pig breeding production cost is reported to be 12.71 yuan/kg, which is approximately 1 yuan/kg higher than leading competitors like Muyuan Foods (002714.SZ), whose cost is below 11.7 yuan/kg [1][2] - The company’s financial director stated that the breeding costs are on a downward trend, and measures are being implemented to align with industry leaders, focusing on cost reduction through optimizing feed formulas and improving breeding performance [1][2] Group 2 - Investors have shown interest in the company's latest breeding costs and capacity arrangements, but the management did not provide specific responses during the earnings call [2] - The company expects to achieve a sow capacity utilization rate of over 90% and an own pig supply ratio of 80% by the end of the year [2] - The company is monitoring national policies and market changes closely, indicating that decisions will be made based on actual conditions, especially in light of recent government calls for capacity control among leading enterprises [2]

Summary of TianKang Biological Conference Call Company Overview - **Company**: TianKang Biological - **Industry**: Pig farming and feed production Key Points and Arguments 1. **Production Goals**: TianKang plans to produce 3.5 to 4 million pigs in 2025, with a self-breeding cost of around 12.5 CNY per kg and total costs below 13 CNY per kg. The acquisition of Changdu Livestock is expected to increase production to 5 million pigs by 2026 [2][3] 2. **Cost Control Measures**: The company has optimized feed structure by increasing the proportion of Central Asian raw materials (such as barley and wheat) to 10%-20%, which has helped reduce feed costs. Personnel efficiency and facility optimization have also contributed to controlling labor costs [2][5] 3. **Regional Cost Comparison**: Production costs in Gansu have decreased from 16-17 CNY to 13.18 CNY, but remain higher than Xinjiang's 11.6 CNY. The company aims to further reduce costs in Gansu through improved facilities and management [2][7] 4. **Production Capacity**: TianKang has achieved full matching of fattening capacity in Xinjiang and Henan, with approximately 1.4 to 1.5 million heads each, totaling around 3 million heads. Gansu has a fattening capacity of about 500,000 heads [2][9] 5. **Market Outlook**: The company believes that the downward space for pig prices is limited, as the reduction in sow numbers indicates a potential price stabilization and recovery. Corn prices may gradually rise [2][10] 6. **Acquisition of Changdu Livestock**: Changdu Livestock, located in Xinjiang, has a capacity of 2 million heads and is expected to produce 1.6 to 1.7 million heads this year. The partnership is based on a long-standing collaboration and cost-effective operations [2][11] 7. **Feed Sales Goals**: The feed sales target for 2025 is set at 2.9 to 3 million tons, with a domestic to export ratio of approximately 1:2 [2][21] 8. **Production Efficiency Improvements**: The company has made significant efforts to enhance production efficiency and reduce costs, including the completion of facility construction in Gansu and increased investment in epidemic prevention measures [2][8] 9. **Future Production Plans**: If the acquisition of Changdu Livestock is successful, the company anticipates reaching a production volume of 5 million heads by 2026, ahead of schedule [2][18] 10. **Feed Raw Material Strategy**: The company is actively exploring raw material procurement in Central Asia, with plans to increase the import volume to further reduce feed costs [2][6] Additional Important Information - **Profitability**: In the first half of 2025, the company achieved a net profit of 338 million CNY, with the pig farming segment contributing 119 million CNY [3] - **Cost Structure**: The self-breeding cost for the first half of 2025 was 12.7 CNY, while the cost for farmer-reared pigs was 13.7 CNY, with labor costs being a significant differentiator [3][14] - **Sales Performance**: The sales volume of ruminant feed decreased by 25% year-on-year, indicating a trend of capacity reduction [2][17] - **Future Product Development**: TianKang is focusing on developing new veterinary products, including vaccines for foot-and-mouth disease and avian influenza, while also working on gene engineering projects [2][28]

Group 1: Financial Performance - The company achieved a revenue of 1.00 billion in the first half of 2025, representing a year-on-year growth of 124.68% [2] - The net profit attributable to shareholders for the second quarter of 2025 was 0.17 billion, marking a return to profitability [2] - The total number of pigs sold in the first half of 2025 reached 259.36 thousand, a year-on-year increase of 37.75% [2] Group 2: Business Operations - The company’s fat pig sales reached 246.61 thousand, with a year-on-year growth of 49.73%, accounting for 95.08% of total sales [2] - The feed business volume increased to 322.56 thousand tons in the first half of 2025, reflecting an 11.71% year-on-year growth [3] - The company has invested in modern slaughter and meat processing bases in regions such as Hunan and Henan [3] Group 3: Cost Management and Efficiency - The company has implemented cost reduction projects for feed, vaccines, and employee salaries, leading to improved production efficiency [2] - The production cost of piglets decreased by 0.74 per kilogram compared to the beginning of the year [3] - The utilization rate of breeding sows has gradually improved, contributing to better production performance [2] Group 4: Strategic Initiatives - The company is focusing on a "company + farmer" breeding model, which accounted for 80.64% of fat pig sales in the first half of 2025 [3] - The introduction of the new Dan breed has increased its proportion from 56% to 76% over the past year [3] - The meat business is transitioning from a regional brand to a national brand, with plans for increased strategic investment in the second half of 2025 [3]