Market Overview - The domestic market indices showed positive performance with the Shanghai Composite Index closing at 3,581.86, up by 0.62% [2] - The agricultural sector underperformed slightly with a decline of 0.14% in the agricultural, forestry, animal husbandry, and fishery sector [4] Agricultural Sector Insights - The report highlights a favorable investment opportunity in Haida Group, driven by expected recovery in the feed industry as upstream raw material prices stabilize and downstream farming conditions improve [4] - Recent data indicates a decline in pig prices, with average prices in key provinces showing a decrease of 4.88% in Sichuan and Guangdong, while the average pork price increased by 0.29% [4] - The report discusses the cyclical nature of the pig industry, emphasizing that the current market may be overly pessimistic regarding the impact of rising pig production capacity on profitability [4] - Recommendations include companies like Wen's Foodstuffs, Shennong Group, and New Hope, which are expected to benefit from the anticipated recovery in the pig farming sector [4] Poultry and Pet Food Industry - The poultry sector is projected to see performance driven by new demand recovery in 2025, with Shennong Development positioned well for growth [4] - The pet food market is highlighted as a key area for growth in 2025, with a focus on brands that are leading in profitability and market trends, recommending Guibao Pet Food as a top pick [4] Textile and Apparel Sector - Nine Star Holdings reported a revenue increase of 2.9% in Q2 2025, with footwear manufacturing also showing growth [6][8] - The report notes that the sports apparel segment is experiencing robust demand, with brands like Anta Sports and Li Ning showing varied performance in retail sales [10] - Recommendations for the textile sector include companies with strong mid-year performance certainty, such as Bailong Oriental and Zhejiang Natural [10] Jewelry Sector - The gold and jewelry retail sector saw a year-on-year growth of 6.1% in June 2025, indicating stable demand [10] - Companies like Laoputang and Chaohongji are recommended for their potential recovery based on channel scale and franchise resources [10]

Group 1: Company Overview - Yuran Dairy's stock price has increased from 1.03 HKD to 3.92 HKD, indicating significant growth potential despite current valuations [1][3] - The company has a strong relationship with Yili, selling nearly all its products to them, which provides a stable revenue stream [3][4] - Yuran Dairy's high debt ratio is a concern, but its cash flow is robust due to guaranteed sales to Yili [4][8] Group 2: Investment Strategy - The investment approach for Yuran Dairy has shifted from a left-side trading strategy (buying on dips) to a right-side strategy (buying on upward trends) [2][4] - The company is expected to benefit from an industry cleanup starting in the second half of 2024, which could improve profitability [2][8] - The current market conditions and capital inflow into the dairy sector have positively impacted Yuran Dairy's stock price [4][5] Group 3: Market Dynamics - The dairy farming industry is facing high levels of debt and losses, with 90% of companies in the sector currently unprofitable [8] - The cyclical nature of the pig farming industry is highlighted, suggesting that similar dynamics may affect dairy farming in the future [5][8] - The upcoming third quarter is critical for cash flow management in the dairy sector due to the need for feed purchases [7][8]

Summary of Key Points from Conference Call Industry Overview - The conference call focuses on the pig farming sector, particularly the impact of policies, environmental regulations, and market dynamics on the industry [1][2][3]. Core Insights and Arguments - **Policy Impact**: Government policies aim to stabilize pig prices and CPI through measures like production limits and environmental regulations, which may extend the industry's profitability cycle [1][2][3]. - **Environmental Regulations**: Nationwide environmental rectification is being implemented, requiring companies to meet compliance standards to avoid penalties or shutdowns. Compliance is crucial for sustainable development [1][5]. - **Price Forecast**: Future pig prices are expected to fluctuate between 14-16 RMB/kg, influenced by breeding increments, weight reduction effects, market demand, and frozen meat indicators. Effective production limits could extend the profitability cycle into next year [1][6]. - **Company Performance**: Companies like DeKang, Muyuan, and Bangji Technology are performing well under current conditions. DeKang has cost and volume advantages, Muyuan is reducing costs and exceeding profit expectations, while Bangji is expanding its industry chain [1][7]. - **Industry Transition**: Pig farming enterprises should actively adjust and transform by utilizing idle capacity, optimizing production structures, and enhancing environmental compliance to adapt to new policies and improve competitiveness [1][8]. Additional Important Content - **Agricultural Sector Growth**: Recent surges in agricultural stocks and futures are attributed to intensified policy support aimed at eliminating inefficient production capacity and stabilizing the industry [2]. - **Current Pig Cycle**: The current pig cycle began in March 2024, with a peak in August 2024. The cycle has been compressed due to African swine fever, but limited production increases and ongoing de-capacity efforts may prolong profitability [3][9]. - **Innovative Models**: The industry is seeing innovative models such as partnerships with farmers, family farm arrangements, and light-asset models, which are becoming standardized and cost-effective [10][11]. - **Core Competitiveness**: Cost control is identified as the core competitiveness for pig farming enterprises, with a focus on seed resources, management levels, feed quality, and innovative models [12]. - **Company Recommendations**: DeKang is highlighted for its robust gene pool and policy alignment, with a potential market space of 500-1,000 billion RMB. Muyuan is noted for its strong innovation and profitability, while Bangji Technology is expected to grow its market value significantly [13][15]. - **Future Price Trends**: The pig farming sector is expected to see stock price increases in the next three months, driven by strong policy support and company innovations [16]. - **Environmental Policy Trends**: The ongoing environmental policies are expected to continue shaping the industry, with gradual implementation rather than abrupt shutdowns [19]. - **Market Dynamics**: The slight increase in the number of breeding sows aligns with market trends, and the sector's performance is influenced by policy and environmental factors rather than solely by breeding dynamics [21]. Company-Specific Insights - **DeKang's Growth Potential**: DeKang is projected to have a market potential exceeding 1,000 billion RMB, with significant growth in output expected in the coming years [26][29]. - **Muyuan's Profitability**: Muyuan's strong profitability and dividend potential make it a suitable candidate for investment, especially as the industry consolidates [20]. - **Bangji's Strategic Development**: Bangji is focused on establishing a complete industry chain, with significant growth potential in both feed and pig farming sectors [14][15][22]. This summary encapsulates the critical insights and developments within the pig farming industry as discussed in the conference call, highlighting the interplay between policy, environmental factors, and company performance.

Group 1 - COFCO Jiajia Kang (01610.HK) was fined 120,900 yuan for transporting unquarantined pigs, raising concerns about supply chain management and food safety [3] - The company has not issued cash dividends for three consecutive years, with the last payout in 2021, despite cumulative net profits exceeding 4.4 billion yuan from 2020 to 2024 [3] - As of 2024, COFCO Jiajia Kang's cash on hand is only 1.064 billion yuan, nearly halved from the previous year, while short-term debts due within a year amount to 2.6 billion yuan, resulting in a cash-to-short-debt ratio of 0.41 [3] Group 2 - The company has increasingly relied on external financing to manage liquidity risks, with significant fluctuations in financing cash flow from 2022 to 2024, indicating a fragile cash flow situation [4] - The pig farming industry is significantly affected by the "pig cycle," requiring companies to have strong risk resilience; COFCO Jiajia Kang must improve cash flow management and compliance to avoid a passive position under competitive and debt pressures [4] - Investors are concerned whether the company will prioritize debt repayment over shareholder returns given its high debt levels [4]

Investment Rating - Investment rating for the agriculture, forestry, animal husbandry, and fishery industry is "Positive" (maintained) [1] Core Viewpoints - The industry is experiencing a supply contraction due to overselling of live pigs since June, leading to a potential increase in pig prices in Q3 2025. The average selling price of live pigs in June 2025 was 14.28 yuan/kg, down 2.28% month-on-month and down 21.99% year-on-year [4][15] - The supply-demand dynamics are improving, with the gross white price difference strengthening month-on-month. As of July 17, 2025, the gross white price difference was 4.71 yuan/kg, an increase of 0.45 yuan/kg compared to June, although lower than the same period in 2024 [5][27] - The industry is entering a critical supply contraction phase, with expectations for the price center of live pigs to rise monthly [4][15] Summary by Sections Industry Overview - Since June, the overselling of live pigs has intensified, leading to a supply contraction. The average price of live pigs in June 2025 was 14.28 yuan/kg, reflecting a month-on-month decrease of 2.28% and a year-on-year decrease of 21.99% [4][15] - The monitoring sample indicated a slaughter volume of 4.3168 million heads in June 2025, down 6.20% month-on-month but up 12.22% year-on-year [4][15] Supply and Demand Dynamics - The gross white price difference has improved, indicating a stronger supply-demand balance. The national frozen product storage rate was 16.85%, down 0.03 percentage points year-on-year [5][27] - The industry is currently in a supply contraction phase, with expectations for the price center of live pigs to rise gradually [4][15] Company Performance - As of July 10, 2025, 12 listed pig farming companies reported a total of 16.1481 million heads sold in June, a year-on-year increase of 45.98% [6][34] - The average selling prices for major listed pig companies decreased month-on-month, with specific companies reporting the following prices: Muyuan Foods at 14.08 yuan/kg, Wens Foodstuff Group at 14.39 yuan/kg, and New Hope Liuhe at 14.18 yuan/kg [7][41]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - Long - term: Supply increases, demand peaks, and it's an era of small profits. A profit of 200 yuan per pig may be the price ceiling. Macroscopically, the government promotes a reasonable recovery of prices and uses reserve purchases to support the market. In terms of supply and demand, supply is expected to increase continuously after July (except for a slight decline in July), and the supply growth rate is faster than the demand growth rate before November. The supply - demand gap is expected to narrow at the end of the year. Pig prices are expected to be strong from July to August, then gradually decline under pressure, and have a seasonal rebound at the end of the year. Spot prices are expected to range from 13 - 16 yuan/kg, and futures prices from 12.5 - 15 yuan/kg. Opportunities to short at high prices can be considered from July to August, and industrial clients can consider selling hedging for far - month contracts after the high in the third quarter [58]. 3. Summary by Relevant Catalogs 3.1 Long - term: Stable Supply, Peak Demand, and Era of Small Profits 3.1.1 Supply Dimension - **Concentration Increase and Stable Capacity**: Currently, the proportion of small - scale farmers' pig sales is 31.9% (91.3% in 2000), and that of large - scale enterprises is 68.1% (8.7% in 2000). Group farms are expanding rapidly, and small - scale farmers are exiting. With the increase in the concentration of large - scale breeding enterprises, their influence on pig prices has increased. The production capacity will be relatively stable as large - scale enterprises have stronger anti - risk capabilities [7]. - **Improvement in Production Efficiency**: There is still much room for improvement in China's pig production efficiency compared with foreign countries. For example, Denmark's PSY is as high as 34.14, while the UK's is 26.64. In 2022, the daily weight gain in Denmark and Sweden exceeded 1000 grams. With stable and slightly increasing capacity, higher large - scale proportion, and improved production efficiency, the supply from leading enterprises will continue to increase [10]. 3.1.2 Consumption Dimension - **Peak in Pork Consumption**: In 2014 and 2023, pig prices were low and there were breeding losses, indicating oversupply. The similar pork production in 2014 and 2023 shows that domestic demand may have saturated at around 58 million tons, suggesting that China's pork consumption may have peaked in 2014 [13]. 3.1.3 Supply - Demand and Profit - **Gradually Loosening Supply - Demand and Small Profits**: China's population decline is faster than expected, which will lead to a decrease in pork consumption in the long run. The total pork consumption is the product of the total population and per - capita consumption. With a negative population growth and a possible peak in per - capita pork consumption, the total demand is weakening. A profit of about 200 yuan per pig corresponds to a cost increase of 2 yuan/kg [17][18]. 3.2 Medium - and Short - Term: Sufficient Supply and Lower Price Center 3.2.1 Supply Side - **Adequate Capacity**: As of the end of May 2025, the national inventory of breeding sows was 40.42 million, 103.64% of the normal inventory of 39 million, with a month - on - month increase of 0.1% and a year - on - year decrease of 1.2%, indicating sufficient breeding sow capacity [21]. - **Weak Will to Reduce Capacity**: There is a lack of strong motivation among producers to reduce production capacity as shown by relevant profit and sow culling data [23][24][25]. - **Continuous Improvement in Production Efficiency**: Indicators such as the breeding - farrowing rate, piglet survival rate, litter size of healthy piglets, and fattening pig survival rate have shown an upward trend, indicating continuous improvement in production efficiency [29]. - **Increasing Slaughter**: In the first half of the year, the national pig slaughter was 366.19 million, a year - on - year increase of 0.6%. Except for a slight decline in July, the slaughter volume is expected to increase continuously, and the pig price center is expected to decline accordingly [36]. - **Increasing Second - Fattening Pressure**: The enthusiasm for second - fattening was similar to last year from February to April this year, reaching a peak in mid - April and then declining rapidly. However, the utilization rate of second - fattening pens has recently increased rapidly, indicating that the supply pressure is postponed, and the subsequent second - fattening slaughter pressure will increase [39]. - **Increasing Slaughter Weight**: This year's pig slaughter weight is at a four - year high, with an average increase of 3 kg compared to last year. Due to low feed costs, enterprise breed improvement, and favorable standard - fat price spreads, large - scale enterprises have generally increased the slaughter weight. The game between large - scale enterprises and small - scale farmers makes weight reduction uncertain [43]. 3.2.2 Demand Side - **Seasonal Weakening of Slaughter Volume**: The pig slaughter volume shows a seasonal weakening trend [44]. 3.2.3 Price - **Widening Standard - Fat Price Spread and Rebounding Piglet Price**: The standard - fat price spread has widened, and the piglet price has rebounded [46]. 3.2.4 Policy - **CPI and Policy Actions**: The government aims to promote a reasonable recovery of prices. Relevant policies include large - scale enterprises not increasing the number of breeding sows, reducing the slaughter weight to 120 kg, and banning the second - fattening of the head part [51]. - **Pork Reserve Early - Warning and Adjustment Mechanism**: The mechanism has different early - warning levels and corresponding reserve adjustment measures for both excessive price drops and rises. As of June 11, the official pig - grain ratio was 6.12, in the third - level early - warning, and frozen meat reserve purchases were initiated in advance [52][54].

Group 1: Macro Strategy - The report indicates that the market expects the Federal Reserve to maintain interest rates steady in July and October 2025, with a 25 basis point cut anticipated in September and December [6][7] - Key macroeconomic data shows a decline in initial jobless claims to 227,000, and a significant increase in tax revenue by $61 billion year-on-year, driven by tariffs [6][7] Group 2: Industry Commentary - Power Equipment and New Energy - China Mobile has procured humanoid robots worth 1.24 billion yuan, marking a significant investment in robotics [10] - The National Development and Reform Commission has approved a cross-regional electricity trading mechanism, enhancing the efficiency of electricity transactions [10] - The report highlights the establishment of a joint laboratory between BYD and Hong Kong University of Science and Technology focusing on robotics and intelligent manufacturing [10][11] Group 3: Industry Commentary - Textile Manufacturing - The 2024 Top 100 supermarket enterprises in China are projected to achieve sales of approximately 900 billion yuan, reflecting a 0.3% year-on-year growth [14] - The report notes a significant decline in the number of stores, down 9.8% year-on-year, while 42 enterprises reported sales growth [14] - The textile manufacturing sector in Vietnam has shown a cumulative year-on-year export growth of 13.0% in the first half of 2025 [16] Group 4: Company Commentary - Haohua Technology - Haohua Technology is expected to achieve a net profit of 5.9 to 6.5 billion yuan in the first half of 2025, representing a year-on-year growth of 59.3% to 75.5% [23] - The company benefits from a favorable market for refrigerants, with prices for key products rising significantly since the beginning of the year [23][24] - The report emphasizes the growth potential in electronic materials due to the expansion of the integrated circuit industry [23][24] Group 5: Investment Recommendations - The report recommends focusing on companies in the BC new technology sector such as Aisuo Co. and Longi Green Energy, and those benefiting from supply-side improvements like Daqo New Energy [12] - It suggests monitoring companies in the humanoid robotics sector, including UBTECH and Yijiahe, for potential investment opportunities [12]

Investment Ratings - The report provides investment ratings for several companies in the agriculture sector, with "Buy-A" for Haida Group (002311.SZ), "Buy-B" for Shennong Development (002299.SZ) and Wens Foodstuff Group (300498.SZ), and "Hold-A" for Guai Bao Pet (301498.SZ) and Zhongchong Co., Ltd. (002891.SZ) [2] Core Insights - The agriculture sector has shown resilience, with the agricultural index outperforming the broader market, indicating potential investment opportunities [3][4] - The report highlights the cyclical nature of the pig farming industry, emphasizing that the current downturn may not necessarily lead to prolonged losses due to potential recovery in raw material costs and macro demand in 2025 [5][6] - Haida Group is identified as a key investment opportunity due to its strong fundamentals and potential growth in overseas feed business [4][5] Industry Performance - The agriculture sector's performance for the week of July 7-13 shows a 1.09% increase, with top-performing sub-industries including fruit and vegetable processing, meat chicken farming, and feed production [3][22] - The average price of live pigs in key provinces has decreased, with prices in Sichuan, Guangdong, and Henan at 14.35, 16.39, and 14.78 CNY/kg respectively, reflecting a decline of 3.37%, 6.56%, and 2.31% week-on-week [4][31] - The average pork price has slightly increased to 20.60 CNY/kg, while the average wholesale price of piglets has decreased to 26.00 CNY/kg, indicating mixed trends in the market [4][31] Company-Specific Analysis - Haida Group is expected to benefit from a recovery in the feed industry as raw material prices stabilize and the breeding sector improves [4][5] - Wens Foodstuff Group, Shennong Group, and Juxing Agriculture are recommended for their potential to outperform market expectations as the pig farming industry enters a profitability cycle [5] - Guai Bao Pet and Zhongchong Co., Ltd. are highlighted for their strong brand positioning and growth potential in the pet food market, particularly in 2025 [6]

Investment Rating - The report maintains an "Outperform" rating for the agricultural sector [1][4]. Core Viewpoints - The report is optimistic about the reversal of the beef cycle, recommending investments in livestock, pet industries, and companies with low valuations in the pig and poultry sectors [3][4]. - The beef price remains strong during the off-season, indicating a potential upward trend in the beef cycle for 2025 [1][3]. - The supply of pigs is expected to maintain low volatility, with a forecast for continued price stability in 2025 [1][3]. Summary by Sections 1. Weekly Overview and Data Summary - The report highlights that beef prices are resilient during the off-season, while pig prices show strong support [1]. - As of July 11, 2025, the price of live pigs is 14.70 CNY/kg, down 3.86% week-on-week, while the price of 7kg piglets is approximately 445 CNY/head, up 2.75% week-on-week [1]. 2. Fundamental Tracking 2.1 Swine - The price of live pigs is expected to maintain low volatility, with a forecast for continued market stability in 2025 [1][14]. 2.2 Poultry - The report notes a reduction in parent stock and structural changes in the poultry market, with consumption gradually shifting upwards [1][15]. 2.3 Beef - The domestic beef market price is 59.23 CNY/kg as of July 11, 2025, reflecting a year-on-year increase of 27.38% [1][16]. 3. Key Company Profit Forecasts and Investment Ratings - Companies such as Guangming Meat Industry, Muyuan Foods, and Haida Group are rated as "Outperform" with respective earnings per share (EPS) forecasts for 2025 of 0.53, 3.57, and 2.64 CNY [4].

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Viewpoints - The supply contraction and macroeconomic catalysts are expected to resonate positively, with strong support for pig prices in Q3 2025 [4][5] - The leading pig companies are reporting significant profit increases for Q2 2025, with a notable rise in pig output and a decrease in production costs, indicating a potential for sustained profitability [4][13] - The beef cycle remains supported by rising calf prices and a decrease in cattle inventory, suggesting a favorable outlook for beef prices in the latter half of 2025 and into 2026 [6][29] Summary by Sections Weekly Observation - Leading pig companies are expected to report substantial profit growth for H1 2025, with estimates for Muyuan Foods indicating a net profit of 10.2-10.7 billion yuan, a year-on-year increase of 1129.97% to 1190.26% [4][13] - The average cost of production for Muyuan Foods has decreased to below 12.1 yuan/kg, supporting profitability through the cycle [4][13] Market Performance - The agricultural index has risen by 1.09% in the week of July 4-11, 2025, aligning with the overall market performance [39][41] - The pig farming sector is experiencing a supply contraction, which is expected to drive pig prices upward after a period of fluctuation [5][14] Price Tracking - As of July 11, 2025, the average price of pigs is 14.81 yuan/kg, reflecting a decrease of 0.54% from the previous week, while the price of piglets has increased by 1.79% to 31.89 yuan/kg [48][49] - The wholesale price of beef is reported at 69.82 yuan/kg, showing a slight increase of 0.07% [56] Recommendations - The report recommends investment in leading companies such as Muyuan Foods, Wens Foodstuffs, and others in the pig farming sector due to improving investment logic and favorable market conditions [6][35] - In the feed sector, companies like Haida Group and New Hope are recommended due to strong domestic and overseas demand [35]