Core Viewpoint - The report from Dongxing Securities indicates that the prices of piglets, live pigs, and pork are expected to fluctuate in July 2025, with average prices at 35.73 CNY/kg, 14.91 CNY/kg, and 25.37 CNY/kg respectively, reflecting a mixed trend in price changes [1] Industry Supply and Demand Performance - In July, pig prices rose and then fell, with a slight rebound in early August before continuing to decline, leading to an average price of 13.82 CNY/kg by August 11 [1] - The supply side was influenced by the rhythm of supply, with group farms reducing output to support prices in early July, but facing pressure from increased supply from individual farmers later in the month [2] - The demand side saw weak consumption due to high summer temperatures, leading to sluggish sales for slaughterhouses [2] Capacity Change Trends - As of June, the number of breeding sows was reported at 40.43 million, showing a slight increase of 0.02% month-on-month, with a narrowing growth rate [2] - Data from July indicated a 0.52% increase in breeding sow samples, while other data remained stable, suggesting a potential halt in growth since February [2] Policy Guidance - Since late May, policies have focused on "reducing production capacity, controlling weight, and limiting secondary fattening," signaling a stabilization of pig prices [3] - Stricter environmental regulations have been implemented, particularly in southern water network areas, which may lead to short-term price pressures but are expected to benefit long-term market stability [3] Future Market Outlook - The ongoing capacity regulation driven by policy is expected to be a key theme in the near future, with an anticipated increase in the elimination of outdated capacity [4] - High-quality production capacity in 2025 is expected to maintain profitability due to cost advantages, with a recommendation to focus on leading companies in the industry such as Muyuan Foods, Wens Foodstuff Group, and others [4] July Sales Data of Listed Companies - In July, the average sales prices for major companies were as follows: Muyuan Foods at 14.30 CNY/kg, Wens Foodstuff Group at 14.58 CNY/kg, Zhengbang Technology at 14.31 CNY/kg, and New Hope Liuhe at 14.44 CNY/kg, with respective month-on-month changes of 1.56%, 1.32%, 1.85%, and 1.83% [5] - The sales volume for these companies showed a mixed trend, with Muyuan Foods down by 10.40% to 750,000 heads, while Wens Foodstuff Group increased by 5.24% to 316,000 heads [5] - The average weight of pigs sold decreased across most companies, indicating a continued trend of reduced weights in the industry [5]

Summary of the Pig Farming Industry Conference Call Industry Overview - The pig farming industry is currently experiencing a price bottoming phase, with pig prices reaching a new low not seen in about a year and a half. This is primarily due to passive capacity reduction, ongoing production cuts driven by policy, and tightening environmental regulations [2][6]. Key Price Trends - In July 2025, the average prices for piglets, live pigs, and pork were 35.7 CNY/kg, 34.91 CNY/kg, and 25.37 CNY/kg, reflecting year-on-year declines of 18.65%, 20.05%, and 12.8% respectively. Month-on-month, piglet prices decreased by 4.09%, while live pig and pork prices saw slight increases of 1.72% and 0.31% [2][3]. - By early August 2025, the average selling price of live pigs had dropped to 13.82 CNY/kg, continuing a downward trend [2]. Supply and Demand Dynamics - The supply side has significantly influenced recent price movements. In early July, large-scale farms reduced output to support prices, but increased supply from smallholders later in the month exerted downward pressure on prices. Demand was weak due to seasonal factors, with expectations for improvement in late August or early September as schools reopen [4][6]. Environmental Regulations Impact - Stricter environmental policies are placing considerable pressure on small to medium-sized farms. The Ministry of Ecology and Environment has intensified inspections, particularly in southern water network regions, which is expected to accelerate the upgrade or exit of outdated production capacity, promoting high-quality development in the pig farming industry [5][6]. Profitability Analysis - As of August 8, 2025, self-breeding and self-raising pigs yielded an average profit of 45.13 CNY per head, while purchased piglets continued to incur losses of 134.14 CNY per head, indicating that self-breeding remains slightly profitable while external purchases are increasingly unprofitable [3][7]. Major Companies Performance - In July 2025, major pig farming companies reported the following slaughter volumes: Muyuan (7.5 million heads, down 10.4%), Wens (3.1 million heads, up 5.24%), New Hope (1.3 million heads, up 2.07%), and Zhengbang (700,000 heads, down 2.16%). Collectively, 17 listed companies slaughtered 15.81 million heads, a 5.3% decrease month-on-month [3][9]. - The average slaughter weights for July were: Muyuan (108.57 kg), Wens (105.69 kg), and New Hope (95.81 kg), with most companies showing a decrease in average weight, indicating a continued trend towards lighter slaughter weights [3][11]. Cost Structure and Competitive Advantage - Muyuan has a significant cost advantage, with its total cost in July 2025 reported at 11.9 CNY/kg. This positions leading companies favorably to achieve good returns this year and maintain profitability into 2026 [3][12]. Future Outlook - The industry is expected to continue facing a supply surplus in the short term, leading to a price bottoming phase. However, in the medium to long term, this situation may facilitate the exit of outdated production capacity and stabilize the market. Regulatory policies are likely to remain strict, with expectations for improved prices and profitability in the second half of the year and into 2026 as pressures ease [6][13][14]. Investment Recommendations - Investors are advised to focus on leading companies with clear cost advantages and high performance reliability, such as Muyuan, Wens, and Shennong Technology. The sector is currently undervalued, presenting safety and upside potential. Additionally, close attention should be paid to trade tensions and changes in import/export policies to mitigate risks associated with raw material cost fluctuations [8].

Report Overview - Report Title: Zhengxin Futures Egg Weekly Report 2025 - 8 - 18 [2] - Research Group: Zhengxin Futures Research Institute - Agricultural Products Research Group [2] Industry Investment Rating - Supply: Bearish [3] - Demand: Neutral [3] - Profit: Neutral [3] - Price and Volume: Neutral [3] - Strategy: Bearish [3] Core Viewpoints - This week, the price of culled chickens from sample breeding enterprises continued to decline, the culling age fluctuated slightly, the price difference between large and small eggs oscillated at a high level, and the price of chicks continued to drop [3] - The high price difference between large and small eggs and the relatively strong price of culled chickens indicate more new additions and fewer culls, which may suppress the price elasticity in the traditional consumption peak season [3] - This year, the capacity reduction is insufficient, the Mid - Autumn Festival stocking is premature, and the egg - laying rate decline due to high temperature is getting smaller, so the rebound momentum in the peak season is limited [3] - This week, the sales volume in the main sales areas and the shipping volume in the main production areas decreased slightly, and the inventory in the circulation and production links also decreased slightly [3] - Traders are afraid of price drops, purchase cautiously, and the overall sales in the production areas are a bit slow [3] - The breeding profit has rebounded slightly and is near the break - even point, and the egg - feed ratio is at the lowest level in the same period of the past 4 years [3] - The egg futures contracts in the delivery month are slightly at a discount, while the other contracts are slightly at a premium [3] - The price difference between the near and far - term egg futures has dropped significantly and is at a moderately high level [3] - Due to the change of the main contract of egg futures, the net short position of institutions in September decreased, while that in October increased [3] - Under the background of high inventory, the near - term supply pressure is large, and the far - term situation will gradually improve with the strengthening of capacity reduction expectations [3] - Before the capacity is cleared due to breeding losses, the pattern of near - term weakness and far - term strength of egg futures is expected to continue, and it is recommended to pay attention to the reverse spread opportunity of egg 9 - 1 [3] Summary by Directory Price and Volume Analysis - Sub - sections include spot price (comparison between main production area price and main sales area price), egg basis (basis of each egg futures contract), egg price difference (price difference of each egg futures contract), and futures institutional net position (long - to - short ratio of institutional positions in September and October egg futures contracts) [4][7][10][13] Supply Analysis - Covers aspects such as egg - laying hen inventory and its structure, culling situation (culled chicken price and average culling age), replenishment situation (price of commercial egg - laying chicks and hatching egg utilization rate), and size - code situation (prices of large and small eggs and seasonal chart of price difference) [16][18][20][23] Demand Analysis - Includes发货量&销量 (sales volume in main sales areas and shipping volume in main production areas), inventory (production - link inventory and circulation - link inventory), and substitutes (seasonal charts of egg - to - pork price ratio and egg - to - vegetable price ratio) [26][28][31] Profit Analysis - Comprises breeding profit (current profit vs. expected profit and comprehensive egg - laying hen breeding profit) and egg - feed ratio (egg - feed ratio and its break - even point, and seasonal chart of egg - feed ratio) [34][37]

Group 1 - The domestic futures market for agricultural products showed mixed results, with egg futures experiencing a decline, closing at 3170.00 CNY per 500 kg, down 2.19% from the previous session [1] - High inventory levels of laying hens and increased supply pressure from new production are contributing to the weak performance of the egg market, alongside soft terminal demand and competition from substitutes due to high temperatures [1] - Institutions expect a potential rebound in egg prices due to upcoming school stocking and mid-autumn festival purchases, although the overall trend remains weak due to high production capacity and low spot prices [1] Group 2 - The futures market is under pressure from high inventory levels, leading to a near-term weak outlook while the long-term may improve as production capacity decreases [2] - Current market sentiment is bearish, influenced by weak demand in the spot market, but there is potential for a recovery as seasonal demand may strengthen in the future [2] - Recommendations suggest waiting for stabilization and considering a bullish approach at lower price levels, as the downside risk appears limited [2]

Investment Rating - The industry investment rating is "Positive" [5] Core Insights - In July, pig prices peaked and then declined, with the average prices for piglets, live pigs, and pork at 35.73 CNY/kg, 14.91 CNY/kg, and 25.37 CNY/kg respectively, showing month-on-month changes of -4.09%, +1.72%, and +0.31% [1][16] - The supply side saw a significant impact from the supply rhythm, with a notable increase in the number of pigs being sold by smallholders, leading to supply pressure [19] - The demand side faced challenges due to weak consumption during the summer heat, resulting in sluggish sales for slaughterhouses [19] - The Ministry of Agriculture and Rural Affairs reported a slight increase in the number of breeding sows, indicating a potential stabilization in supply [19][24] - Policy measures aimed at reducing production capacity and controlling weight have begun to show effects, with expectations for a gradual reduction in industry capacity [24][25] Summary by Sections Industry Supply and Demand - July pig prices were influenced by supply dynamics, with a peak followed by a decline due to increased selling by smallholders and controlled sales by larger farms [19] - The average price of live pigs fell to 13.82 CNY/kg by August 11 [1][16] Production Capacity Trends - The number of breeding sows was reported at 40.43 million, with a slight month-on-month increase of 0.02% [19][24] - Data from various sources indicated a halt in growth for breeding sows for the first time since February [19][24] Policy and Regulatory Environment - Recent policies have focused on "reducing production capacity, controlling weight, and regulating secondary fattening," which are expected to stabilize the market in the long term [24][25] - Stricter environmental regulations are anticipated to pressure smaller farms, leading to the elimination of outdated production capacity [25] Market Performance of Listed Companies - In July, the average sales prices for major companies like Muyuan Foods, Wens Foodstuff, and New Hope Liuhe showed slight increases, with prices at 14.30 CNY/kg, 14.58 CNY/kg, and 14.44 CNY/kg respectively [9][32] - The total sales volume for listed companies decreased by 5.30% month-on-month, with notable declines in companies like Muyuan Foods [33][36] Profitability and Cost Analysis - The cost of production is a critical factor, with Muyuan Foods reporting a cost of 11.90 CNY/kg in July, indicating a competitive advantage over peers [41][42] - The profitability of listed companies is expected to remain strong, with significant year-on-year growth in net profits anticipated for the first half of 2025 [44][47]

Investment Rating - The report maintains an "Overweight" rating for the agriculture, forestry, animal husbandry, and fishery industry [46][47]. Core Insights - The SW agriculture, forestry, animal husbandry, and fishery industry slightly underperformed the CSI 300 index, with an increase of 1.32% from August 1 to August 14, 2025, lagging behind the index by approximately 1.08 percentage points [10][11]. - Most sub-sectors recorded positive returns, with only the fishery sector showing a negative return of -0.64%. The agricultural product processing, feed, planting, animal health, and breeding sectors saw increases of 6.53%, 1.88%, 0.97%, 0.93%, and 0.38%, respectively [11][12]. - Approximately 57% of stocks in the industry recorded positive returns during the same period [12]. Industry Data Summary - **Pig Farming**: - The average price of external three yuan pigs fell from 14.21 CNY/kg to 13.82 CNY/kg between August 1 and August 14, 2025. - The cost of corn was 2394.12 CNY/ton, showing a recent decline, while soybean meal was priced at 3126 CNY/ton, which increased recently [21][23]. - Profit for self-bred pigs was 28.85 CNY/head, while the profit for purchased piglets was -157.05 CNY/head, both showing a decline compared to the previous week [26]. - **Poultry Farming**: - The average price of broiler chicks was 3.58 CNY/chick, which continued to rise, while the average price for layer chicks was 3.6 CNY/chick, showing a slight decline [28]. - The average price of white feather broilers was 7.2 CNY/kg, which increased, and the profit for white feather broiler farming was 1.03 CNY/chick, also showing an upward trend [32]. - **Aquaculture**: - The average wholesale price for crucian carp was 22.38 CNY/kg, showing a slight decline, while the average price for carp was 15.69 CNY/kg, which increased [34]. Company Insights - The report highlights several companies to watch, including: - Muyuan Foods (002714), noted for its cost, scale, and integration advantages in pig farming [48]. - Haida Group (002311), recognized as a leading feed company with expected market share growth [48]. - Shennong Development (002299), a leader in the white feather broiler industry with advantages in breeding and food business expansion [48]. - Reap Bio (300119), a leader in the animal health industry with a growing product matrix for pet health [48]. - Zhongchong Co. (002891), a top player in the pet food sector with strong domestic growth and recovering export business [48].

Core Viewpoint - A production halt by CATL has triggered a significant surge in the lithium carbonate market, with futures prices reaching a three-month high [2][3]. Group 1: Market Reaction - On August 11, lithium carbonate futures hit the daily limit, rising by 8% to 81,000 yuan per ton [3]. - The halt in production at CATL's Yichun project is interpreted as the first substantial reduction signal in the lithium salt industry, which has been experiencing insufficient capacity reduction [3][4]. - The halt coincides with a traditional peak season for inventory demand, leading to a sharp rebound in lithium carbonate futures prices [3]. Group 2: Stock Market Impact - The surge in lithium carbonate futures has led to a collective rise in A-share lithium mining stocks, with companies like Tianqi Lithium and Ganfeng Lithium hitting their daily limits [5][6]. - Hong Kong and overseas lithium mining stocks also saw significant gains, with Ganfeng Lithium rising over 20% [7]. Group 3: Supply Chain Concerns - The Yichun project is crucial in the lithium supply chain, and a production halt exceeding two weeks could disrupt downstream inventory plans [7]. - There are concerns about potential chain reactions, as seven other lithium mica mines are also facing certificate renewals, which could impact 24% of domestic lithium production [10]. Group 4: Industry Outlook - Despite the production halts, the overall lithium carbonate output remains high, and the impact of the stoppages is considered manageable [11]. - New lithium extraction capacities from salt lakes are expected to come online, which may offset some supply disruptions [11].

Core Viewpoint - The lithium carbonate market experienced a significant price surge following a production halt at CATL's Yichun project, which is interpreted as a substantial reduction signal in the lithium salt industry, amidst a backdrop of high demand during the traditional peak season [2][3]. Group 1: Production and Market Impact - CATL announced a temporary suspension of mining operations at its Yichun project due to the expiration of its mining license, with plans to apply for a renewal [2]. - The halt in production has led to a notable increase in lithium carbonate futures prices, reaching 81,000 yuan/ton, marking a three-month high and a rise of 15% over two trading days [3]. - The Yichun project is crucial in the lithium supply chain, and its suspension could disrupt downstream inventory plans if it lasts more than two weeks [3][6]. Group 2: Broader Industry Implications - In addition to CATL's project, seven other lithium mica mines are facing collective license renewals, which could impact approximately 18,000 tons of lithium carbonate equivalent (LCE) production, accounting for 24% of domestic output [5]. - The new Mineral Resources Law, effective July 1, 2025, will classify lithium as an independent mineral, prompting regulatory changes that could further affect supply [5]. - Current lithium carbonate production levels remain high, and while the supply shock from the production halt is manageable, the long-term effects on supply-demand balance are uncertain [6][7]. Group 3: Future Supply Developments - Domestic lithium extraction from salt lakes is expected to increase, with new projects coming online, such as the 20,000 tons/year lithium carbonate project by Qinghai Huixin [7]. - Analysts suggest that while the production halt has driven prices up, there may be potential supply increases from other domestic and international sources in the future [7].

Investment Rating - The overall industry rating is "Positive" for the agriculture sector, indicating expected returns above the CSI 300 index by more than 5% in the next six months [6][51]. Core Views 1. **Livestock Industry Chain** - The swine market is experiencing rising epidemic risks and policy support, which is expected to enhance the motivation for capacity reduction. The average price of live pigs is currently 13.71 CNY/kg, down 0.62 CNY from last week, while the average price for 15 kg piglets is 31.24 CNY/kg, down 1.48 CNY [5][19]. - The operating rate of large-scale slaughterhouses has increased to 31.9%, up 0.36 percentage points from last week and 7.26 percentage points year-on-year. The total output of pigs from 16 listed companies reached 100.75 million heads, a year-on-year increase of 16.9% [5][19]. - The number of breeding sows has decreased to 40.43 million heads, down 370,000 from the peak last year. The average profit per head for self-bred pigs is 45 CNY, an increase of 2 CNY from last week [6][20]. 2. **Poultry Industry** - Chicken prices are experiencing fluctuations, with the average price for broiler chickens at 3.54 CNY/lb, up 0.13 CNY from last week. The average price for white feather chickens is 13.9 CNY/kg, up 0.2 CNY [21][23]. - The industry is at a historically high capacity level, with limited imports in the first seven months of the year. The profitability per chicken has turned positive at 0.62 CNY [21][23]. - The yellow chicken market is also seeing price declines, with average prices at 9.77 CNY/kg for Lihua yellow chicken, down 0.02 CNY from last month [23][24]. 3. **Seed and Planting Industry** - The seed industry is benefiting from ongoing policy optimization and the promotion of genetically modified organisms (GMOs). The long-term investment value of leading seed companies is highlighted as they are at historical low valuations [10][24]. - Grain prices are experiencing short-term adjustments but are expected to rise in the medium term due to reduced imports and adverse weather conditions. The average purchase price for corn is 2441 CNY/ton, down 4 CNY from last week [12][24]. Company Recommendations - Recommended companies include: - Zhongchong Co., Ltd. - Buy [3] - Muyuan Foods Co., Ltd. - Buy [3] - Suqian Agricultural Development Co., Ltd. - Buy [3]

Report Summary 1. Report Industry Investment Rating - No industry investment rating information is provided in the report. 2. Core View of the Report - Today's overall spot market is stable. After the price drop in the previous few days, farmers expect to hold prices. According to Yongyi data, the monthly hog slaughter began to increase month - on - month in August, with the fastest month - on - month growth rate in October. The weight is gradually declining but still has room to fall. There was little change in piglet prices compared to last week. The continuous decline in spot prices in July led to some capacity reduction. The downward space for spot prices is limited, but it will still take time for prices to rise. Near - month contracts may follow the weak spot market. Continue to focus on the 9 - 11 reverse spread [2]. 3. Summary by Relevant Catalog Hog Price Data - On August 7, 2025, the national average hog price was 13.2 yuan/kg, down 0.1 yuan/kg. Prices in various regions also showed a downward trend, with price drops ranging from 0.09 to 0.21 yuan/kg. For example, the price in Henan was 13.86 yuan/kg, down 0.14 yuan/kg; in Hunan, it was 13.66 yuan/kg, down 0.12 yuan/kg; in Guangdong, it was 15.3 yuan/kg, down 0.2 yuan/kg [2]. Futures Contract Data - On August 7, 2025, the price of LH2509 was 13,870 yuan, up 60 yuan; LH2511 was 14,100 yuan, up 90 yuan; LH2601 was 14,395 yuan, up 85 yuan. The spread between LH09 - 11 was - 230 yuan, down 30 yuan; the spread between LH11 - 01 was - 295 yuan, up 5 yuan [2]. Hog Slaughter and Weight Data - According to Yongyi data, the monthly hog slaughter began to increase month - on - month in August, with the fastest month - on - month growth rate in October. This week, the average weight of hog slaughter was 127.98 kg, down 0.50 kg from last week, a month - on - month decrease of 0.39%, and up 2.52 kg from the same period last year, a year - on - year increase of 2.01% [2]. Piglet Price Data - Piglet prices have not changed much compared to last week [2].