Group 1 - The livestock ETF (159865) has increased by over 1.2%, with a net inflow of nearly 300 million yuan in the past 10 days according to Wind data [1] - As of the time of reporting, over 60 million shares have been subscribed today [1] - Dongxing Securities indicates that capacity regulation driven by policy will remain a core theme for the foreseeable future, with expectations for the elimination of outdated capacity increasing, leading to significant catalysts for the sector [1] Group 2 - The livestock ETF (159865) tracks the CSI Livestock Index (930707), which selects listed companies involved in livestock farming, feed processing, and veterinary drug production to reflect the overall performance of related securities [1] - The constituent stocks cover the entire industry chain from farming to processing, demonstrating strong industry representation [1] - Investors without stock accounts can consider the Guotai CSI Livestock Farming ETF Connect A (012724) and Guotai CSI Livestock Farming ETF Connect C (012725) [1]

Group 1 - The company reported a revenue of 76.46 billion yuan for the first half of 2025, representing a year-on-year increase of 34.5% [1] - The net profit attributable to shareholders reached 10.53 billion yuan, showing a significant year-on-year growth of 1169.7% [1] - For the second quarter of 2025, the company achieved a revenue of 40.40 billion yuan, up 32.1% year-on-year, and a net profit of 6.04 billion yuan [1] Group 2 - The company recorded a stable growth in the number of livestock, with 46.91 million heads sold in the first half of 2025, a year-on-year increase of 45% [2] - The number of commercial pigs sold was 38.39 million heads, reflecting a year-on-year growth of 32%, while the sale of piglets surged by 168% to 8.29 million heads [2] - The company is actively managing breeding costs and aims for high-quality development, with a reduction in the number of breeding sows to 3.431 million heads by the end of June [2] Group 3 - The company demonstrated strong financial health, with a debt-to-asset ratio of 56.06% at the end of Q2 2025, a decrease of 2.62 percentage points from the end of 2024 [2] - The company plans to distribute a cash dividend of 9.32 yuan per 10 shares, amounting to 47.5% of the net profit attributable to shareholders for the first half of 2025 [1] - As an industry leader, the company is expected to maintain stable performance amid capacity control measures, with improved operational quality and reduced capital expenditures [2]

Financial Performance - In the first half of 2025, the company achieved a revenue of 76.463 billion yuan, a year-on-year increase of 34.46% [4] - The net profit attributable to shareholders reached 10.530 billion yuan, a staggering year-on-year growth of 1,169.77% [4] - The net cash flow from operating activities was 17.351 billion yuan, up 12.13% year-on-year [4] - As of the end of Q2 2025, the company's debt-to-asset ratio was 56.06%, a decrease of 3.14 percentage points from the end of Q1 [5] Debt Management - The company aims to reduce its overall debt by 10 billion yuan this year, having already decreased its total debt by 5.6 billion yuan by the end of Q2, achieving over half of its target [5] Livestock Production - In the first half of 2025, the company sold 46.91 million pigs, including 38.39 million market pigs, 8.29 million piglets, and 225,000 breeding pigs [5] - The number of breeding sows as of June 2025 was 3.431 million, with plans to reduce this to 3.3 million by year-end [7][8] - The cost of pig farming has decreased to approximately 11.8 yuan/kg as of July, with a target of an average cost of 12 yuan/kg for the year [5][14] Slaughtering and Meat Processing - The company slaughtered 11.4148 million pigs in the first half of 2025, a year-on-year increase of 110.87%, with a capacity utilization rate of 78.72% [6] - The company reported a significant reduction in losses, down to approximately 100 million yuan compared to the previous year [6] Dividend Distribution - The company plans to distribute a cash dividend of 9.32 yuan per 10 shares, totaling 5.002 billion yuan, which accounts for 47.50% of the net profit for the first half of 2025 [6][10] Industry Response and Strategy - The company is actively responding to national measures for capacity regulation in the pig industry, including reducing the number of breeding sows and managing pig weights [7][8] - The company has halted sales of fattening pigs to secondary fattening customers to ensure all pigs are directed to slaughterhouses [8] Global Expansion - The company is advancing its global strategy through its Hong Kong stock issuance, with funds primarily allocated for global market expansion and R&D, not for domestic capacity increases [9] - An overseas business team has been established to explore international markets, leveraging existing technology and cost advantages [11][12] Cost Reduction Initiatives - The company has successfully reduced costs from 13.1 yuan/kg in January to 11.8 yuan/kg in July, with a target to further decrease to 11 yuan/kg by year-end [14] - Key cost reduction strategies include breeding improvements, health management, and employee training [14] Community Engagement - The company is enhancing its piglet sales and providing customized solutions for farmers, aiming to strengthen ties and share industry benefits [15]

Core Viewpoint - The company, Muyuan Foods, reported a significant increase in its half-year performance, with a net profit growth of 1169.77% and plans for substantial cash dividends to shareholders, while actively participating in industry capacity regulation [2][3][5]. Financial Performance - In the first half of the year, the company achieved operating revenue of 764.63 billion yuan, a year-on-year increase of 34.46% [3] - The net profit attributable to shareholders reached 105.3 billion yuan, reflecting a remarkable growth of 1169.77% [3] - The company sold 46.91 million pigs, with a slaughter volume of 11.41 million pigs, marking a 110.87% increase year-on-year [3] - The cash flow from operating activities was 173.5 billion yuan, up 12.13% compared to the previous year [2] Dividend and Share Buyback - Muyuan Foods plans to distribute a cash dividend of 9.32 yuan per 10 shares (including tax), totaling 50.02 billion yuan [2][7] - As of June 30, the company has repurchased 52.54 million shares, with a total transaction amount of 2.11 billion yuan [2][7] Industry Capacity Regulation - The company is committed to reducing its breeding sow inventory to 3.3 million by the end of the year, in line with national capacity regulation efforts [4][5] - As of the end of the second quarter, the breeding sow inventory was reduced to 3.43 million, a decrease of 54,000 heads [5] - The company aims to lower the average weight of pigs for slaughter to 120 kg by the end of the year [5] Strategic Initiatives - Muyuan Foods is expanding its global presence, having established a subsidiary in Vietnam and applied for an H-share listing in Hong Kong [7] - The funds raised from the H-share listing will primarily be used for smart farming research and international supply chain development, rather than increasing domestic production capacity [7] Commitment to Quality and Sustainability - The company emphasizes the importance of meeting customer needs and aims to produce safe and healthy pork products while promoting high-quality industry development [8]

Summary of the Conference Call for Muyuan Foods Co., Ltd. Company Overview - **Company**: Muyuan Foods Co., Ltd. - **Industry**: Swine farming and meat processing Key Financial Performance - **Revenue**: In the first half of 2025, revenue reached 51 billion yuan, a year-on-year increase of 12.13% [2] - **Net Profit**: For the same period, net profit was 105.3 billion yuan, showing a growth of over 11 times compared to the previous year [3] - **Debt Ratio**: The debt ratio decreased to 56.06%, down 3.14 percentage points from the end of the first quarter [2][4] - **Cash Flow**: Operating cash flow was 173.51 billion yuan, a year-on-year increase of 12.13% [3] Production and Sales - **Pig Sales**: Sold 46.94 million pigs in the first half of 2025, including 38.39 million commercial pigs [2][5] - **Breeding Stock**: The number of breeding sows is planned to be reduced to 3.3 million by the end of the year, a decrease of 130,000 from the second quarter [2][8] - **Cost Management**: The complete cost of pig farming dropped to approximately 11.8 yuan per kilogram in July, with a target of averaging 12 yuan per kilogram for the year [2][15] Slaughtering and Meat Processing - **Slaughter Volume**: Slaughtered 11.41 million pigs, a year-on-year increase of over 110.87% [6] - **Utilization Rate**: Capacity utilization rate improved to 78.72% [6] - **Losses**: Despite a loss of approximately 100 million yuan, the loss was significantly reduced compared to the previous year [6][20] Shareholder Returns - **Dividend Distribution**: Announced a cash dividend of 9.32 yuan per 10 shares, totaling 5 billion yuan, which is 47.5% of the net profit for the first half of 2025 [7][10] Strategic Initiatives - **Global Expansion**: Funds raised from the Hong Kong stock issuance will be used for R&D and overseas expansion, not for domestic capacity increases [9][11] - **Response to National Policies**: Actively responding to national capacity control policies, taking on 30% of the target [8][25] - **Future Plans**: No new domestic capacity plans for the second half of the year; focus on maintaining existing capacity [9][28] Cost Reduction and Efficiency - **Cost Targets**: Aiming for an average cost of 12 yuan per kilogram for the year, with a goal to reduce it to 11 yuan by year-end [15] - **Cost Management Strategies**: Focus on breeding improvements, disease control, and employee training to enhance production efficiency [15][19] Industry Context - **Market Dynamics**: The company is committed to fulfilling its capacity control commitments, which may influence production and operational plans for the upcoming year [8][27] - **Collaboration with Other Enterprises**: The company is exploring partnerships and collaborative models to enhance its market position and service offerings [21] Conclusion Muyuan Foods Co., Ltd. is demonstrating strong financial performance and strategic initiatives aimed at enhancing production efficiency, responding to national policies, and expanding its global footprint while maintaining a focus on shareholder returns and cost management.

Investment Rating - The investment rating for the agriculture, forestry, animal husbandry, and fishery industry is "Positive" (maintained) [1] Core Viewpoints - The report highlights a significant transformation in industry policies, focusing on protecting farmers' rights and stimulating enterprise innovation. Future growth stocks will likely prioritize technological content and innovative models while mobilizing existing production factors [5][16] - The report anticipates that the industry's profit center will recover due to clear capacity regulation policies and a strong commitment to maintaining stable pig prices [5][16] - The report recommends focusing on companies with a "platform + ecosystem" model, particularly technology-driven and service-oriented ecological platform companies like Dekang Agriculture, as well as leading pig farming companies such as Muyuan Foods and Wens Foodstuff [5][16] Summary by Sections 1. Swine Industry - The latest pig price is 13.67 CNY/kg (down 0.06 CNY/kg MoM), with an average slaughter weight of 127.82 kg (up 0.02 kg MoM). The price for 15 kg piglets is 484 CNY/head (down 33 CNY/head MoM). Short-term price declines may be due to policy-induced weight reductions [4][15] - Dekang reported a pre-fair value profit of 1.273 billion CNY for H1 2025, a 251% YoY increase, and is expected to achieve over 1.5 billion CNY in profits from its swine segment, with a per-head profit exceeding 300 CNY [5][15] 2. Poultry Industry - The price of chicken seedlings in Yantai is 3.65 CNY/chick (unchanged MoM), and the price of broiler chickens is 3.65 CNY/kg (up 1.39% MoM, down 4.7% YoY). Seasonal factors and structural price increases in downstream products may lead to a price recovery in the industry [6][16] - The report identifies two main lines of focus: high-quality imported breeding stock leaders and fully integrated industry leaders like Yisheng and Shengnong Development [6][16] 3. Feed Industry - The report recommends Haida Group due to the recovery of the industry, improved management effects, and increased capacity utilization, which is expected to lead to volume and profit growth [7][17] - The report notes a slight decline in water product prices due to the seasonal arrival of new fish varieties, with various fish species showing mixed price changes [7][17] 4. Pet Industry - The pet category saw a month-on-month increase in sales growth in July, despite uncertainties regarding tariffs and export fluctuations impacting the sector [9][20] - The report emphasizes the resilience of leading companies in the pet sector, such as Guibao and Zhongchong, which are expected to maintain high growth rates and drive industry concentration [9][21] 5. Agricultural Products - The USDA's August supply and demand report unexpectedly lowered the new season's soybean harvest area, tightening the supply-demand relationship for U.S. soybeans. Domestic soybean imports are expected to decline seasonally, which may lead to an upward shift in soybean meal prices [11][21]

Core Viewpoints - The report maintains a positive outlook on the agriculture, forestry, animal husbandry, and fishery industry, with a focus on potential investment opportunities in the sector [1][3] - The market performance over the last 12 months shows a decline of 11% for the agriculture sector compared to a 4% decline in the CSI 300 index, indicating relative underperformance [2][10] Livestock Farming Data Tracking - Pig prices have been declining due to increased supply pressure, with the average price of live pigs at 13.74 CNY/kg as of August 14, reflecting a week-on-week decrease of 2.00% [6][29] - The number of breeding sows showed a slight increase in July, with a month-on-month growth of 0.28% [20] - Profitability for self-bred pigs remains positive at 28.85 CNY per head, while purchased piglets show a loss of 157.05 CNY per head [35] Poultry Farming Data Tracking - The average price of white feather broilers was 7.20 CNY/kg as of August 15, with a week-on-week increase of 0.84% [36][39] - The ongoing avian influenza outbreaks in Europe and the U.S. are expected to benefit the white feather chicken industry by stabilizing prices [36] Animal Health Data Tracking - The demand for animal health products is expected to rebound, with significant year-on-year growth in vaccine issuance for various diseases, including a 76% increase for circovirus vaccines in June [45] - The development of African swine fever vaccines is progressing, with clinical trials expected to enhance market interest in the sector [45] Seed Industry Data Tracking - The average prices for wheat, soybean meal, and corn as of August 15 are 2438 CNY/ton, 3097 CNY/ton, and 2394 CNY/ton, respectively, with soybean meal prices increasing by 2.7% week-on-week [48] - The USDA's August report indicates a decrease in global corn and soybean stocks for the 2025/26 season compared to the previous year, which may impact pricing and availability [49][51] Pet Industry Data Tracking - Pet food exports totaled 4.999 billion CNY in the first half of 2025, showing a year-on-year increase of 0.4% [53] - Domestic sales of pet food are growing rapidly, with a combined growth rate of 5% across major e-commerce platforms in July [56] - Companies with strong domestic sales growth and supply chain advantages are expected to enhance their market share [56]

Market Overview - Global markets showed mixed performance, with the Hang Seng Index closing at 24,970, up 0.25% for the day and 24.48% year-to-date [1] - The US markets saw gains, with the Dow Jones up 1.10% and the S&P 500 up 1.13%, reflecting positive sentiment driven by moderate inflation data [3] Hong Kong Stock Performance - The Hang Seng Financial Index rose 0.52% and is up 28.47% year-to-date, while the Hang Seng Utilities Index fell 0.30% but is still up 5.00% for the year [2] - Southbound capital saw a net inflow of HKD 9.45 billion, indicating strong interest in Hong Kong stocks [3] Economic Policies and Impacts - The Chinese government announced targeted interest subsidies for personal consumption loans, potentially leading to an increase in loan growth by CNY 1 trillion [3] - The Hong Kong Monetary Authority intervened by buying HKD 7.065 billion to defend the currency peg, with total purchases since June reaching HKD 116.6 billion [3] Company Analysis: Kingdee International - Kingdee reported a 1H25 revenue of CNY 3.19 billion, a year-on-year increase of 11.2%, aligning with expectations [4] - The company aims for AI-related revenue to constitute over 30% of total revenue by 2030, with AI contracts exceeding CNY 150 million in 1H25 [4] Company Analysis: Tencent Music - Tencent Music's 2Q25 revenue grew 18% to CNY 8.44 billion, with Non-IFRS net profit increasing 37% to CNY 2.57 billion, surpassing market expectations [5] - The company is expected to continue its growth trajectory, with projected revenue and profit increases of 17% and 28% respectively for 3Q25 [5] Focus Stocks - Geely Automobile (175 HK) has a target price of HKD 24.00, representing a 24% upside potential [6] - Luckin Coffee (LKNCY US) has a target price of USD 44.95, indicating a 19% upside potential [6] - Tencent (700 HK) is rated "Buy" with a target price of HKD 660.00, reflecting an 18% upside potential [6]

Group 1: Report Industry Investment Rating - No relevant content provided Group 2: Core Viewpoints of the Report - The CBOT soybean futures price is expected to maintain a bottom - oscillating pattern in the short term, and the domestic continuous meal is affected by various factors with different price trends. The short - term price of the live hog spot is falling, but the near - month contract is relatively resistant to decline, and the 2511 contract fluctuates strongly [17][18][20] Group 3: Summary by Relevant Catalogs 1. Market Review - The DCE soybean meal main 2601 contract fell by 0.71% to 3072 yuan/ton, and the coastal mainstream oil mill quotes decreased by 10 - 30 yuan/ton. The DCE live hog main 2509 contract rose by 0.29% to 13970 yuan/ton. The national average ex - factory price of ternary live hogs decreased by 0.01 yuan/kg to 13.67 yuan/kg. The overnight CBOT US soybean main contract decreased by 0.80% to 987 cents/bushel [2] 2. Weather in Main Producing Areas - In the US Midwest, the west has active rainfall and the east is relatively dry. In the 6 - 10 - day outlook, there will be sporadic showers locally, and the temperature is close to or higher than normal. Most areas have good soil moisture [3][4] 3. Macroeconomic and Industry News - In the 32nd week (August 2 - 8), the actual soybean crushing volume of oil mills was 217.75 million tons, with an operating rate of 61.21%. On August 11, the import cost of US soybeans increased, while that of Brazilian and Argentine soybeans decreased. On August 8, the national main oil mill soybean meal transaction volume decreased. The CNF quotes of imported Brazilian soybeans for October - November shipment increased. Canadian rapeseed exports decreased in the week ending July 31 but increased year - on - year. The Mississippi River barge freight rate decreased. China will implement comprehensive regulation of live hog production capacity. The self - breeding and self - raising live hog farming profit increased, while the profit of purchasing piglets for farming was still in the red. The national live hog inventory increased by 2.2% at the end of June, and China's July PPI decreased year - on - year with a narrowing decline month - on - month [5][6][7] 4. Data Charts - The report provides charts on the prices of rapeseed meal, live hogs, soybean meal, and their corresponding bases, as well as charts on Chinese soybean and soybean meal inventories [10][13][15][16] 5. Analysis and Strategies - **Soybean Meal**: The CBOT soybean futures price is expected to oscillate at the bottom in the short term. The domestic continuous meal main contract has switched. The M09 contract has a support at 3000, and the M01 contract has a short - term support at 3050. The spot price of soybean meal is slowly rising, but the high operating rate of oil mills and inventory pressure restrict price increases. The import of Argentine soybean meal may boost downstream purchasing [17][18] - **Live Hogs**: On the supply side, the supply increases as farmers reduce the weight of hogs for sale. On the demand side, the demand is expected to improve significantly during the back - to - school season and double - festival stocking. The spot price is falling, but the near - month contract is relatively resistant to decline, and the 2511 contract fluctuates strongly. It is recommended to conduct light - position trial long trades [20]

Investment Rating - The industry rating is "Outperform the Market" indicating that the overall return of the industry is expected to exceed the market benchmark index by more than 5% in the next 6 months [70]. Core Insights - In July, the growth rate of breeding sows across three parties generally narrowed, indicating a focus on changes in pig production capacity. The average price of live pigs in China on August 8 was 13.67 CNY/kg, down 0.42 CNY/kg week-on-week [2][9]. - The white chicken market is experiencing a phase of reduced supply, leading to continued price increases. The average price of white feathered meat chickens on August 8 was 7.14 CNY/kg, up 0.31 CNY/kg week-on-week [3][33]. - The agricultural sector is focusing on the promotion of high-quality seeds and technology selection to enhance food security, with the Ministry of Agriculture and Rural Affairs initiating a project for the 2025 national crop variety promotion directory [44]. Summary by Sections Pig Farming - The average weight of pigs being sold has continued to decline, with the average weight as of August 7 being 127.80 kg, down 0.18 kg week-on-week. This is attributed to the ongoing high temperatures affecting feed intake and growth rates [21][31]. - The slaughter volume of sample enterprises has remained stable, with an average daily slaughter of 137,100 pigs, reflecting a slight increase of 0.05% week-on-week [12][31]. - The policy focus on capacity regulation is expected to accelerate the elimination of inefficient production capacity, potentially raising the long-term price center for pigs [31][32]. Poultry Sector - The supply of broiler chickens is tightening due to previous breeding losses, resulting in a continued rise in prices. The average price of broiler chicks was 3.13 CNY/chick, up 0.56 CNY/chick week-on-week [3][33]. - The egg market has seen a slight decline in prices, with the average price of eggs at 6.23 CNY/kg, down 0.51 CNY/kg week-on-week, although there is potential for a rebound due to upcoming seasonal demand [3][36]. Agricultural Products - The soybean meal market is showing strength, with the futures price on August 8 reaching 3,094 CNY/ton, up 57 CNY/ton week-on-week, driven by concerns over a soybean supply gap in the fourth quarter [45][48]. - The current domestic demand for soybean meal is supported by strong import needs from Brazil, leading to a bullish outlook for the market [45][48].