Core Viewpoint - The article highlights the significant turnaround in the performance of Muyuan Foods (牧原股份) in the first half of the year, with a projected net profit of 10.2 billion to 10.7 billion yuan, representing a year-on-year increase of over 1100% [2][3]. Group 1: Company Performance - Muyuan's profit surge is attributed not to pig prices but to increased output and effective cost control [3]. - The company achieved a sales volume of 38.394 million pigs in the first half, a year-on-year increase of 18.54%, with a notable 168% increase in piglet sales [26]. - The average breeding cost for Muyuan in 2024 is projected to be 14 yuan per kilogram, with costs decreasing to 12-12.1 yuan per kilogram by June, nearing the annual target of 12 yuan per kilogram [17][18]. Group 2: Industry Trends - The "anti-involution" policy is reshaping the pig farming industry, with government efforts to reduce inventory, capacity, and optimize structure [4][5]. - The number of breeding sows has been adjusted, with a reduction in the breeding sow inventory to stabilize supply and ensure food safety [33][41]. - The industry is experiencing a shift towards larger-scale operations, with over 70% of pig farming now being industrialized, enhancing capital reserves and risk management capabilities [45]. Group 3: Market Dynamics - The pig price is expected to stabilize after a decline, with the market anticipating a recovery due to the reduction in breeding sow inventory and overall weight control of pigs [7][43]. - The prices of key feed ingredients like corn and soybean meal have decreased, contributing to the overall reduction in breeding costs [22][23]. - The industry is likely to see narrow fluctuations in the pig cycle, with profitability increasingly dependent on companies' cost control capabilities rather than price volatility [50].

Core Viewpoint - The investment value of leading pig farming companies such as Muyuan, Wens, and New Hope will diverge as the industry reaches a scale rate of 70% and the pig cycle becomes smoother [3]. Group 1: Industry Characteristics - The pig farming industry has a low entry threshold, with a scale standard of only 500 pigs, but it conceals high operational challenges due to the need for large-scale, low-cost production [5]. - The pig cycle is characterized by supply and demand imbalances, influenced by factors such as feed prices and disease outbreaks, leading to price volatility and affecting profitability [6][8]. - The average annual output per sow in China is significantly lower than that in the US and Denmark, indicating inefficiencies in the industry [9]. Group 2: Company Performance and Strategies - Muyuan has rapidly grown to become the world's largest pig farming company, while Wens and New Hope have also achieved significant scale, with their operational paths being a focus of analysis [5][20]. - The scale of pig farming in China has increased from 41.8% in 2014 to 70.1% in 2024, with the top 20 companies accounting for 30.7% of the total output [28]. - Muyuan's self-breeding model allows for better cost control and efficiency compared to Wens and New Hope's model, which relies on partnerships with farmers [30][41]. Group 3: Financial Health and Debt Management - Muyuan and New Hope have seen their debt levels rise, with debt financing comprising about 40% and 45% of their total assets, respectively, while Wens has maintained a lower debt ratio [52][59]. - The liquidity ratios indicate that Wens has a more stable financial position compared to Muyuan and New Hope, which are under tighter liquidity conditions [61][62]. - New Hope's reliance on long-term financing for its pig farming operations has led to increasing liquidity pressures, with a net outflow of cash in recent years [64]. Group 4: Future Outlook - Wens is expected to have continued growth potential due to its financial capacity to expand, while Muyuan and New Hope may face challenges in further expansion due to liquidity constraints [66]. - The pig cycle is anticipated to smooth out over time, reducing its impact on large-scale investments and expansions in the industry [19].

Market Overview - The report highlights a positive trend in the agricultural sector, particularly in the aquaculture, other agricultural product processing, pig farming, food and feed additives, and seed industries, with the agricultural sector index rising by 2.55% during the week of June 30 to July 6, 2025 [3] - The Shanghai Composite Index closed at 3,497.48, reflecting a 0.70% increase, while the Shenzhen Component Index rose by 1.47% to 10,588.39 [2] Key Investment Insights - The report identifies Haida Group as a promising investment opportunity due to the expected recovery in the feed industry, driven by declining upstream raw material prices and improving conditions in the breeding sector [3] - The average price of live pigs in key provinces showed a week-on-week increase, with prices in Sichuan, Guangdong, and Henan rising by 6.83%, 10.04%, and 1.68% respectively, indicating a positive trend in pig prices [3] - The report suggests that the current market may be overly pessimistic regarding the impact of pig production capacity recovery on profitability, while also overlooking the potential positive effects of declining raw material costs and macroeconomic demand recovery in 2025 [3] Industry Dynamics - The report discusses the cyclical nature of the pig farming industry, emphasizing that the current recovery phase may last longer than market expectations due to the industry's financial constraints and the need for debt reduction rather than rapid capacity expansion [3] - It is noted that the chicken industry may see performance driven by new demand recovery in 2025, with companies like Shengnong Development positioned at the bottom of their performance and valuation cycles, presenting good investment opportunities [3] Recommendations - The report recommends several pig farming stocks, including Wens Foodstuff Group, Shennong Group, Juxing Agriculture, Tangrenshen, and New Hope, based on the anticipated recovery in profitability [3] - For the pet food sector, the report highlights the importance of brand profitability and suggests focusing on leading domestic brands like Guibao Pet Food, which maintain strong sales performance [3][4]

Investment Rating - The report maintains an "Outperform" rating for the agricultural sector [4] Core Views - The report is optimistic about the reversal of the beef cycle, recommending investments in pet products and Hai Da Group, while focusing on undervalued leading companies in the pig and poultry sectors [3] - The pork production capacity is expected to remain stable, with strong support for pig prices in 2025 [1][3] - The beef market is showing resilience during the off-season, with expectations for a bullish cycle in 2025 [1][3] Summary by Sections 1. Weekly Overview and Data Summary - Weekly pig price as of July 4 is 15.29 CNY/kg, up 5.01% week-on-week [1] - Chicken prices are experiencing a decline, with broiler prices at 6.18 CNY/kg, down 10% week-on-week [1] - The average beef price is 59.35 CNY/kg, stable week-on-week and up 27.63% year-on-year [1] 2. Fundamental Tracking 2.1 Pork - Pork prices are expected to maintain low volatility, with a forecast for continued market stability in 2025 [1][14] 2.2 Poultry - The parent stock of broilers is decreasing, indicating a structural change in consumption [1][15] 2.3 Beef - The beef market is expected to benefit from a cyclical upturn, with prices remaining strong [1][16] 2.4 Soybean Meal - Current soybean prices are stable at 3926 CNY/ton, with soybean meal prices at 2928 CNY/ton, up 0.76% week-on-week [2][16] 2.5 Corn - Corn prices are expected to see moderate increases, with current prices at 2443 CNY/ton, up 0.37% week-on-week [2][16] 2.6 Sugar - Sugar prices are slightly increasing, with current prices at 6050 CNY/ton, up 0.33% week-on-week [2][16] 3. Company Profit Forecasts and Investment Ratings - Companies such as Guangming Meat Industry, Muyuan Foods, and Hai Da Group are rated as "Outperform" with respective EPS forecasts for 2025 [4]

Group 1 - The Hong Kong stock market has shown strong performance in the first half of the year, with the Hang Seng Index rising by 20%, making it one of the best performers globally [1] - The "Hong Kong Three Sisters"—Lao Pu Gold, Pop Mart, and Mixue Group—have gained significant attention, with Lao Pu Gold surging by 330%, Pop Mart by 200%, and Mixue Group by 96% [2][4] - A lesser-known player, Dekang Agriculture (02419), has also performed well, with its stock price increasing by 192% this year, peaking at a 247% rise [3] Group 2 - Dekang Agriculture's growth is driven by its low valuation and strong growth potential, primarily in pig farming, which constitutes about 80% of its business [5] - The company is projected to have a stable growth rate, with a 24% year-on-year increase in pig output expected in 2024, and ambitious targets of 31% and 30% growth for 2025 and 2026, respectively [6] - In comparison, major competitors like Muyuan Foods and Wens Foodstuffs are expected to have lower growth rates of 26% and 13%, respectively [6] Group 3 - Dekang Agriculture's cost structure is competitive, with a complete breeding cost of approximately 12.4 yuan/kg, placing it among the industry's top tier [8] - The company's debt-to-asset ratio is projected to be around 62.76% by the end of 2024, which is in line with the industry average, indicating manageable financial pressure [10] - The valuation method for pig farming companies is based on head average market value during the bottom of the pig cycle, with Dekang's head average market value at 2560 yuan, which is relatively low compared to peers [12] Group 4 - The current pig cycle is characterized by overproduction, with the national breeding sow inventory exceeding the target, leading to a downward pressure on pig prices [13] - The industry has seen improvements in breeding efficiency, with the average number of piglets weaned per sow increasing significantly, contributing to higher supply levels [13][14] - Despite the challenges, there is potential for policy interventions to stabilize the market, which could lead to temporary boosts in stock performance for companies like Dekang Agriculture [15]

（转自：猪兜） 农业农村部最新发布数：今年1至5月，全国规模以上生猪屠宰量同比增长12.8%，其中仅5月份单月屠宰量就达到3216万头，同比激增20.6%。一个更值得 警惕的信号是，能繁母猪存栏量仍维持在4042万头的相对高位，表明产能的去化速度尚未达到预期目标，供应压力持续存在。同时，全国多地仔猪价格以 跌至500元/头，部分地区已达480元/头。 产能高压持续，去化速度不及预期 面对行业深度调整的现实，采取务实有效的生存策略至关重要。对于大型养殖集团而言，核心任务已从规模扩张转向"降本增效"。像牧原、新希望这样的 头部企业，已明确提出将养殖综合成本控制在14元/公斤以下的战略目标，旨在构建更强的成本壁垒以抵御周期低谷。对于广大中小养殖场，当下的首要 任务则是确保"活下去"。这需要多管齐下：一是优化母猪种群结构， 果断淘汰产仔性能低下、健康状况不佳、泌乳能力差的低效母猪，减少无效产能和 后续持续的饲养成本负担。二是调整出栏节奏， 严格按照标准体重（如110-130公斤）及时出栏，避免因赌行情而过度压栏导致"越养越亏"。三是严控饲 料成本， 在保障基础营养的前提下，积极探索使用麸皮等性价比更高的替代原料部分替 ...

Investment Rating - The report assigns a "Buy" rating for the company with a target price of 154 HKD, indicating an upside potential of over 80% from the current price of 85.8 HKD [8]. Core Insights - The report highlights a new cycle logic in the pig farming industry, driven by supply-demand dynamics and policy interventions, which may lead to a phase of capacity reduction and recovery challenges [6][45]. - The company is positioned as a leading integrated livestock farming enterprise in China, focusing on pig and poultry farming, with a strong emphasis on cost management and innovative farming models [17][30]. Industry Overview - The pig farming sector is experiencing a supply surplus and weak demand, leading to a potential decline in pig prices and reduced profitability for farmers [1][44]. - The chicken market is expected to see a marginal recovery in prices in the second half of the year, driven by improving consumer demand and seasonal consumption patterns [2][56]. Company Overview - The company has developed a unique farming model that integrates traditional farming with innovative practices, allowing for rapid expansion and improved farmer collaboration [3][57]. - The pig farming segment has shown significant growth, with a projected output of 11 million pigs by 2025, contributing to an estimated market value of 33 billion CNY [6][30]. - The poultry segment has also seen a doubling of market share from 1.3% in 2018 to 2.6% in 2024, driven by a diversified product matrix and improved breeding techniques [4][30]. Business Segments - The pig farming business leverages a dual farming model, enhancing resource sharing and operational efficiency, which has resulted in a competitive cost structure [3][57]. - The chicken business focuses on breeding and product diversification, responding to market trends and consumer preferences, which is expected to support future price elasticity [4][56]. - The company's slaughtering operations are expanding, aligning with industry trends towards vertical integration and enhanced food processing capabilities [5][30].

Summary of Dekang Group's Conference Call Company Overview - **Company**: Dekang Group - **Industry**: Pig Farming and Processing Key Points and Arguments Industry Response and Strategy - Dekang Group actively responds to the National Development and Reform Commission's supply-side reform policies, planning for an increase in breeding sows and innovating farming models such as empowerment and resource integration to meet future development needs [2][5] Production and Efficiency Metrics - The target for pig output in 2025 is set at 11 million heads, with no expected changes due to established production capacity [3] - The company’s full cost in the first half of 2025 is approximately CNY 12.4 per kilogram, with potential for further reduction through learning from European farm management practices [2][7] - Dekang Group leads the industry in efficiency metrics, with a market age of 110 kg being 12 days ahead of the industry average and a PSY (pigs weaned per sow per year) of about 28 [8] Growth and Production Capacity - The company has invested significantly in the No. 2 farm model, which is expected to be a key growth point, with the "Hundred Villages, Million Heads" model exceeding 50,000 heads [4][12] - The slaughtering business has a designed capacity of 5 million heads, with an expected utilization rate of about 20% in 2025, leading to a slaughter volume of approximately 1 million heads [4][23] Cost Structure and Future Projections - Current cost structure remains stable, with feed accounting for about 70%, and breeding costs slightly increasing compared to the previous year [10][15] - The company’s daily weight gain is approximately 780 grams, with potential for further cost reduction through precise nutrition and technology reserves [9] Genetic Resources and Disease Control - Dekang Group possesses superior genetic resources, with purebred pigs reaching 100 kg in 122.6 days and a feed conversion ratio of 1.84 [11][30] - The company has excellent disease control measures, with diarrhea incidence maintained below 0.3%, significantly lower than the industry average of 2.5% [11] Market Dynamics and Policy Impact - The National Development and Reform Commission's policies are expected to stabilize pig prices, with recent measures leading to a noticeable increase in prices during June and July 2025 [26] - The company plans to lower slaughter weights in response to government policies [18] Future Development Plans - Dekang Group aims to enhance its slaughter business capacity utilization to 80% within the next three to four years [24] - The company maintains a high level of cash reserves to address market uncertainties and growth needs, with no immediate plans for direct financing [34] Competitive Landscape - The market for pig farming is competitive, with other companies also entering the No. 2 farm model, but Dekang Group believes it has core competitive advantages and a strong reputation [21][20] Conclusion - Dekang Group is well-positioned for future growth with its innovative farming models, strong genetic resources, and strategic responses to government policies, while also focusing on cost efficiency and production capacity enhancement [36]

Core Viewpoint - The company, Muyuan Foods, is seeking to raise at least $1 billion through a listing on the Hong Kong Stock Exchange despite having recently turned a profit with a net income of 17.8 billion yuan last year [1][2]. Group 1: Financial Performance - Muyuan Foods reported total revenue of nearly 140 billion yuan and a net profit of approximately 17.8 billion yuan, capturing 5.6% of the global market share in pig production [4]. - As of the end of 2024, the company had cash reserves of 12.8 billion yuan and total liabilities of 110.1 billion yuan, resulting in a high debt-to-asset ratio of 58.68% [4][6]. - The company's net current liabilities stood at 24.2 billion yuan, while cash and cash equivalents were insufficient to cover all short-term debts [6][8]. Group 2: Debt and Interest Expenses - Since 2018, Muyuan's interest expenses have been on the rise, reaching 2.89 billion yuan in 2022 and 3.24 billion yuan in 2023, with over 1.6 billion yuan in interest expenses recorded in the first half of 2024 [8]. - Over 70% of Muyuan's total liabilities of 118.4 billion yuan are interest-bearing, indicating significant financial pressure [8]. Group 3: Market Strategy and Industry Context - The company follows a strategy of maintaining production during both high and low market cycles, aiming to outlast competitors during downturns [6]. - The cyclical nature of the pig market, characterized by periods of high prices leading to oversupply and subsequent price drops, poses ongoing challenges for the company [6][12]. - Muyuan's cost advantage is being challenged as competitors like Wens Foodstuff Group reduce their production costs, potentially undermining Muyuan's market position [11]. Group 4: Future Outlook - The upcoming listing is positioned as a means to raise funds and enhance international strategy and governance [11]. - The company's strong first-quarter performance, with revenue of 36 billion yuan and a year-on-year growth of 37.26%, contrasts with its rising debt and interest obligations [11]. - The success of Muyuan's strategy may hinge on future fluctuations in pig prices, which could impact profitability and asset management [12].

Market Trends - The domestic market indices showed positive performance with the Shanghai Composite Index closing at 3,444.43, up by 0.59%, indicating an expected improvement in supply and demand conditions [4] Agricultural Industry - The agricultural sector saw a weekly increase in the Shanghai and Shenzhen 300 Index by 1.95%, with the agriculture, forestry, animal husbandry, and fishery sector rising by 0.80% [9] - Pig prices increased week-on-week, with average prices in key provinces such as Sichuan, Guangdong, and Henan at 13.90, 15.94, and 14.88 CNY/kg respectively, reflecting increases of 1.46%, 2.57%, and 3.48% [9] - The report highlights the potential for Hai Da Group as an investment opportunity due to expected recovery in the feed industry driven by lower raw material prices and improving breeding conditions [7][9] Chemical Pharmaceutical Industry - BGB-43395, a CDK4 inhibitor developed by BeiGene, shows promising initial efficacy and safety in treating previously treated breast cancer and solid tumor patients [10] - The drug exhibits high selectivity for CDK4 and is expected to enter Phase III trials for HR+/HER2- metastatic breast cancer, with the second-line study anticipated to start in Q4 2025 [10][11] - The global market for CDK4/6 inhibitors is projected to reach approximately $13 billion by 2024, indicating significant growth potential for BGB-43395 [10] Textile and Apparel Industry - Bosideng reported a revenue of 25.902 billion CNY for FY2024/25, a year-on-year increase of 11.6%, with a net profit of 3.514 billion CNY, up 14.3% [11][15] - The brand's down jacket business showed steady growth, with revenue from this segment reaching 21.668 billion CNY, a 11.0% increase year-on-year [11] - The company opened 253 new stores, enhancing its operational capabilities and channel management [12][15] Photovoltaic Glass Industry - Major photovoltaic glass manufacturers plan to collectively reduce production by 30% starting in July, which is expected to improve the supply-demand balance in the market [14][16] - The report recommends leading photovoltaic glass companies such as Fuyao Glass and Xinyi Solar as potential investment opportunities due to anticipated improvements in market conditions [14]