1. Report Industry Investment Rating - Not provided in the content 2. Core Viewpoints of the Report - The supply side has seen a slowdown in the slaughter rhythm of the breeding end, and the average slaughter weight has decreased, leading to a reduction in supply. However, the sow production capacity is in an increasing cycle in the second and third quarters, and the medium - term supply pressure is increasing. On the demand side, the slaughterhouse operating rate has stopped falling and rebounded, but high temperatures suppress the willingness to purchase pork, the terminal sales speed has slowed down, and the rebound space is limited, with a possible subsequent decline. Short - term supply reduction, along with policies discouraging secondary fattening and state reserve purchases boosting market sentiment, support a short - term rebound in hog futures prices. But the expected increase in medium - term supply and weak demand limit the upside of spot prices, which may drag down the futures price increase. Overall, the market is expected to be volatile. The strategy suggestion is to wait and see [6]. 3. Summary by Directory 3.1 Weekly Highlights Summary - **Market Review**: Hog prices rebounded, with the main contract rising 0.76% weekly [6][9]. - **Market Outlook**: Short - term supply reduction and policy support lead to a short - term futures price rebound, but medium - term supply increase and weak demand limit the upside of spot and futures prices. - **Strategy Recommendation**: Temporary wait - and - see [6]. 3.2 Futures Market Situation - **Price Movement**: Futures rebounded, with the main contract rising 0.76% weekly [9]. - **Net Position and Warehouse Receipts**: The net short position increased, and there were 750 futures warehouse receipts [11][15]. 3.3 Spot Market Situation - **Hog and Piglet Prices**: The national average hog price was 14.33 yuan/kg, unchanged from last week and down 0.9% from last month. The average price of 15 - kg weaned piglets was 34.14 yuan/kg, down 0.14 yuan/kg from last week and 16.04% from last month [26]. - **Pork and Sow Prices**: On June 12, the national average pork price was 25.26 yuan/kg, down 0.23 yuan/kg from the previous week. The average price of binary sows was 32.52 yuan/kg, unchanged from the previous week [31]. - **Pig - grain Ratio**: As of June 11, the pig - grain ratio was 6.12, down 0.17 from the previous week, below the break - even point [35]. 3.4 Upstream Situation - **Sow Inventory**: In April 2025, the national sow inventory was 40380000 heads, down 10000 from the previous month, up 1.31% year - on - year, equivalent to 103.6% of the normal inventory. In May, the sow inventory of large - scale farms increased by 0.33% month - on - month and 4.26% year - on - year, and that of small and medium - sized farms increased by 0.03% month - on - month and 8.07% year - on - year [40]. - **Hog Inventory**: In Q1 2023, the national hog inventory was 417310000 heads, down 10120000 from the previous quarter but up 8810000 year - on - year. In May, the hog inventory of large - scale farms increased by 0.45% month - on - month and 5.75% year - on - year, and that of small and medium - sized farms increased by 0.82% month - on - month and 8.07% year - on - year [43]. - **Hog Slaughter Volume and Weight**: In May, the hog slaughter volume of large - scale farms was 1059860000 heads, down 2.38% month - on - month but up 12.35% year - on - year, and that of small and medium - sized farms was 48960000 heads, down 1.48% month - on - month but up 73.46% year - on - year. The average slaughter weight was 123.78 kg, down 0.18 kg from last week [47]. 3.5 Industry Situation - **Breeding Profits**: As of June 20, the profit of purchasing piglets for breeding was a loss of 186.79 yuan/head, with a 19.4 - yuan increase compared to the previous week; the profit of self - breeding and self - raising was 19.4 yuan/head, with a 22.3 - yuan increase compared to the previous week. The poultry breeding profit was a loss of 0.47 yuan/head, with a 0.08 - yuan reduction in loss compared to the previous week [52]. - **Import Volume**: From January to May 2025, the cumulative imported pork was 450000 tons, with an average monthly import of 90000 tons, up 4.65% year - on - year, at a historically low level [57]. - **Substitute Products**: As of June 20, the price of white - striped chicken was 13.0 yuan/kg, unchanged from last week. As of June 19, the average national price difference between standard and fat hogs was - 0.22 yuan/kg, a 0.01 - yuan decrease from last week [60]. - **Feed Situation**: As of June 20, the spot price of soybean meal was 3015.14 yuan/ton, up 47.14 yuan/ton from the previous week; the corn price was 2417.06 yuan/ton, up 11.37 yuan/ton from the previous week. The DCE hog feed cost index closed at 971.29, up 0.99% from last week, and the price of finishing pig compound feed was 3.36 yuan/kg, unchanged from last week. In May 2025, the monthly feed production was 2762100 tons, up 98100 tons from the previous month [66][69][74]. - **CPI**: As of May 2025, the year - on - year CPI decreased by 0.1%, with a narrowing decline [77]. 3.6 Downstream Situation - **Slaughter and Cold Storage**: In the 25th week, the slaughterhouse operating rate was 27.97%, up 0.75 percentage points from last week and 17.77 percentage points higher than the same period last year. As of Thursday this week, the cold storage capacity of key domestic slaughterhouses was 17.35%, up 0.01% from last week [80]. - **Slaughter Volume and Catering Consumption**: As of April 2025, the slaughter volume of designated hog slaughtering enterprises was 30770000 heads, up 0.46% from the previous month. In May 2025, the national catering revenue was 4578.2 billion yuan, up 5.9% year - on - year [85]. 3.7 Hog - related Stocks - Mentioned stocks include Muyuan Co., Ltd. and Wens Co., Ltd., but no specific analysis is provided [86].

Report Summary 1. Report Industry Investment Rating No information provided. 2. Core Viewpoints - The supply pressure will ease at the end and beginning of the month, but the selling willingness of breeders and second - fattening farmers increases, and the mid - term supply pressure will increase due to the growth cycle of sows in the second and third quarters. - After the Dragon Boat Festival, terminal demand will cool down again, and the seasonal consumption of pork will weaken with rising temperatures. - In the short term, the change in the slaughter rhythm will lead to an adjustment in hog prices, but the overall price trend is weak due to the mid - term supply - demand imbalance with a looser pattern. - The recommended strategy is to short on rallies and conduct rolling operations. [6] 3. Summary by Directory 3.1 Weekly Highlights - **Market Review**: Hog prices fluctuated and adjusted, with the main contract rising 0.67% weekly. - **Market Outlook**: Supply pressure will ease in the short term but increase in the mid - term, and demand will decline seasonally. Overall, the short - term price will adjust, and the mid - term trend is weak. - **Strategy**: Short on rallies and conduct rolling operations. [6] 3.2 Futures and Spot Markets - **Futures Market**: This week, futures fluctuated and adjusted. The net short position of the top 20 futures decreased, and there were 0 futures warrants. As of May 30, the net short position of the top 20 in hog futures was 8,804 lots, 3,750 lots less than last week, and the number of futures warrants decreased by 633 to 5 lots compared to last week. [10][12][16] - **Spot Market**: - The basis of the July and September hog contracts was 1,295 yuan/ton and 895 yuan/ton respectively this week. - The national average hog price was 14.62 yuan/kg, up 0.27 yuan/kg from last week and down 1.88% from last month. The average price of 15 - kg weaned piglets was 40.66 yuan/kg, unchanged from last week and down 0.59% from last month. - The national pork price was 25.68 yuan/kg in the week of May 22, down 0.16 yuan/kg from the previous week. The average price of binary sows was 32.53 yuan/kg, unchanged from the previous week. - The hog - grain ratio was 6.29 as of the week of May 21, down 0.13 from the previous week, below the break - even point and continuing to weaken. [20][27][31][35] 3.3 Industry Situation - **Upstream**: - In April, the inventory of breeding sows decreased slightly month - on - month, accounting for 103.6% of the normal inventory. The inventory of breeding sows in large - scale farms and small and medium - sized farms in April showed a slight increase. - In the first quarter, the hog inventory increased year - on - year, and the inventory of institutions increased slightly in April. - In April, the hog slaughter volume increased, and the average slaughter weight remained unchanged. [40][43][46] - **Industry**: - As of May 30, the profit of purchasing piglets for fattening was a loss of 84.37 yuan/head, a decrease of 68.32 yuan/head month - on - month; the profit of self - breeding and self - fattening was 35.65 yuan/head, a decrease of 12.56 yuan/head month - on - month. The poultry breeding profit was a loss of 0.36 yuan/head, with a reduced loss of 0.09 yuan/head week - on - week. - From January to April 2025, the cumulative imported pork was 360,000 tons, a year - on - year increase of 5.88%, but at a historically low level. - As of May 30, the price of white - striped chickens was 13.2 yuan/kg, down 0.2 yuan/kg from last week; the average price difference between standard and fat hogs was - 0.01 yuan/kg, an increase of 0.02 yuan/kg from last week. - As of May 30, the spot price of soybean meal was 2,975.14 yuan/ton, down 52.86 yuan/ton from the previous week; the corn price was 2,376.08 yuan/ton, up 4.31 yuan/ton from the previous week. - As of May 30, the closing price of the Dalian Commodity Exchange hog feed cost index was 943.45, up 0.3% from last week; the price of finishing pig compound feed was 3.37 yuan/kg, unchanged from last week. - As of April 2025, the monthly feed output was 26.64 million tons, a year - on - year decrease of 1.132 million tons. - As of April 2025, China's CPI decreased year - on - year, but the decline narrowed. [51][56][60][65] - **Downstream**: - In the 22nd week, the slaughtering enterprise's operating rate was 29.35%, up 0.8 percentage points from last week and 9.03 percentage points higher year - on - year. The frozen product storage capacity of key domestic slaughtering enterprises was 17.28%, unchanged from last week. - As of April 2025, the slaughter volume of designated hog slaughtering enterprises was 30.77 million heads, an increase of 0.46% from the previous month. In April 2025, the national catering revenue was 416.7 billion yuan, a year - on - year increase of 5.2%. [79][84] - **Hog Stocks**: The report mentions the stock trends of Muyuan Co., Ltd. and Wens Co., Ltd., but no specific data is provided. [85]

Core Viewpoint - The company, Kemin Foods, reported a significant recovery in net profit for 2024, achieving 146 million yuan compared to a loss of over 60 million yuan in the previous year, primarily due to rising pig prices. However, the company still faces challenges in its pig farming business, which continues to incur losses, and its aggressive dividend plan has raised concerns given its financial pressures [1][3][4]. Group 1: Financial Performance - Kemin Foods achieved a net profit of 146 million yuan in 2024, marking a more than threefold increase from the previous year's loss of over 60 million yuan [1]. - The company's revenue for 2024 was 4.567 billion yuan, a decrease of 11.91% year-on-year, marking the second annual revenue decline in its history [3]. - Despite the overall recovery in the pig farming industry, Kemin's pig farming business reported a loss of approximately 94.7 million yuan in 2024, with a revenue of 784 million yuan from its subsidiary, Xingjiang Muge [3][4]. Group 2: Dividend and Financial Pressure - Kemin Foods proposed a cash dividend of 156 million yuan, exceeding its net profit of 146 million yuan, which has been deemed overly aggressive given its financial situation [1][4]. - The company's cash reserves stood at 357 million yuan against interest-bearing liabilities of over 2.406 billion yuan, indicating significant debt pressure [4]. - The total amount for dividends and share buybacks in 2024 reached 292 million yuan, accounting for 199.90% of the net profit, raising questions about the sustainability of such financial strategies [4]. Group 3: Management Changes - The company's chairman and general manager, Chen Hong, received a salary increase from 439,200 yuan to 699,300 yuan in 2024, raising eyebrows due to the significant jump in compensation within a year of taking over the role [4]. - Chen Hong's sister, Chen Hui, also saw her salary rise to 580,000 yuan in 2024, which is an increase of 80,000 yuan since 2020 [4].