Report Industry Investment Ratings No relevant information provided. Core Views of the Report - The overall market shows a complex situation with different trends in various sectors. In the macro - financial field, the stock index may see a style shift from small - and medium - cap to large - and medium - cap stocks, and the bond market is affected by multiple factors. In the commodity market, different metals, energy, and agricultural products have their own supply - demand and price trends influenced by policies, seasons, and international trade [3][6]. Summary by Categories Macro - Financial Stock Index - **Macro News**: The National Development and Reform Commission promotes coordinated development of state - owned and private enterprises; over 3000 cases of chikungunya fever are confirmed in Foshan; Vice - Premier He Lifeng will hold economic and trade talks with the US; the police strengthen management of "intelligent driving"; the EU plans to impose tariffs on nearly 100 billion euros of US goods if negotiations break down [2]. - **Trading Logic**: "Anti - involution" drives the rebound of traditional cyclical and track stocks, and the "Yajiang Hydropower" sector drives the rebound of infrastructure and power equipment sectors. It is recommended to go long on IF index futures on dips [3]. Treasury Bonds - **Market Quotes**: On Wednesday, TL, T, TF, and TS main contracts all declined [4]. - **News**: The yield of 10 - year Japanese government bonds reached a high, and the Nikkei 225 index rose; the cumulative power generation installed capacity in China increased; the central bank conducted reverse repurchase operations with a net withdrawal of funds [4]. - **Strategy**: The economic data in Q2 is resilient, and the central bank maintains a positive attitude towards capital. Interest rates are expected to decline in the long - term, but the recent good sentiment in commodities and the stock market suppresses the bond market [6]. Precious Metals - **Market Quotes**: Shanghai gold and silver declined, while COMEX gold and silver showed different trends. The US 10 - year Treasury yield and the US dollar index are at certain levels [7]. - **Market Outlook**: The reduction of overseas trade policy uncertainty pressures gold prices, while the expectation of the Fed's loose monetary policy makes silver prices resilient. It is recommended to maintain a long - term bullish view on silver [7][8]. Non - ferrous Metals Copper - **Market Quotes**: LME copper and Shanghai copper rose. LME inventory decreased, and domestic warehouse receipts decreased [10]. - **Price Outlook**: The decline of US Treasury yields and the expected release of domestic growth - stabilizing plans are positive, but the tight supply of copper raw materials, the off - season downstream demand, and the approaching US copper tariff implementation limit the upward space of copper prices [11]. Aluminum - **Market Quotes**: LME aluminum and Shanghai aluminum declined. Domestic inventory increased, and the processing fee of aluminum rods rebounded [12]. - **Price Outlook**: The upcoming domestic growth - stabilizing plan and the expectation of the Fed's interest rate cut are positive, but the off - season demand and the expected increase in inventory limit the upward space of aluminum prices [12]. Zinc - **Market Quotes**: Shanghai zinc index rose slightly. Domestic and LME inventories are at certain levels [13]. - **Price Outlook**: In the long - term, zinc prices are bearish due to the loose supply of zinc ore and the expected increase in zinc ingot production. In the short - term, zinc prices may be volatile and strong due to the Fed's dovish attitude and the positive commodity market atmosphere [13]. Lead - **Market Quotes**: Shanghai lead index declined. Domestic and LME inventories are at certain levels [14][16]. - **Price Outlook**: The supply of lead ingots is relatively loose, and the demand is affected by anti - dumping tariffs. It is expected that domestic lead prices will be weak [16]. Nickel - **Market Quotes**: Nickel prices fluctuated narrowly. Nickel ore prices declined, and nickel iron prices were under pressure [17]. - **Price Outlook**: The weak demand and high stainless steel inventory will lead to a further decline in ore prices and the price center of the industrial chain. It is recommended to try short positions lightly [17]. Tin - **Market Quotes**: Shanghai tin rose. The supply of tin ore in Myanmar is expected to increase, and the domestic smelting plants face raw material supply pressure [18]. - **Price Outlook**: The overall fundamentals of tin are weak due to the expected increase in supply and weak demand. It is recommended to wait and see [18]. Lithium Carbonate - **Market Quotes**: The spot index of lithium carbonate declined, and the futures price also dropped significantly [19]. - **Price Outlook**: The short - term price is affected by the commodity market atmosphere and supply expectations, but the fundamental improvement is limited. It is recommended to wait and see [19][20]. Alumina - **Market Quotes**: The alumina index declined. The spot price in some regions increased, and the import window was closed [21]. - **Price Outlook**: The over - capacity pattern may be difficult to change in the short - term. It is recommended to wait and see in the short - term and look for opportunities to short in the future [21]. Stainless Steel - **Market Quotes**: The stainless steel main contract declined slightly. The spot price was relatively stable, and the social inventory decreased [22]. - **Price Outlook**: The anti - involution policy boosts the industry's willingness to support prices, but the oversupply situation remains. The market's upward momentum is weak [22]. Cast Aluminum Alloy - **Market Quotes**: The AD2511 contract declined. The spot price was stable, and the inventory increased slightly [23]. - **Price Outlook**: The downstream is in the off - season, and the supply and demand are weak. The cost support is strengthened, but the price increase is difficult [23]. Black Building Materials Steel - **Market Quotes**: Rebar and hot - rolled coil futures prices declined. The spot price of rebar increased slightly, and that of hot - rolled coil decreased slightly [25]. - **Price Outlook**: The overall commodity market atmosphere is positive, and the low inventory level is supportive. The market is expected to strengthen, but it is necessary to pay attention to policy signals and terminal demand [26]. Iron Ore - **Market Quotes**: The main contract of iron ore declined. The spot price and the basis are at certain levels [27]. - **Price Outlook**: The supply of iron ore is expected to increase, and the demand is strong. The price is expected to be volatile and strong in the short - term, but risk control is needed [28]. Glass and Soda Ash - **Glass**: The spot price increased, and the inventory decreased. It is expected to be strong in the short - term under the influence of policies, and it is recommended to avoid short positions [29]. - **Soda Ash**: The spot price decreased slightly, and the inventory decreased. It is expected to be strong in the short - term but limited in the long - term. It is recommended to avoid short positions in the short - term and look for short opportunities later [30]. Manganese Silicon and Ferrosilicon - **Market Quotes**: Manganese silicon and ferrosilicon futures prices declined. The spot price of manganese silicon decreased, and that of ferrosilicon increased [31]. - **Price Outlook**: The industry has an over - capacity pattern, and the demand is expected to weaken. It is recommended to wait and see in the current high - volatility market [32]. Industrial Silicon - **Market Quotes**: The industrial silicon futures price declined. The spot price increased, and the short - term rebound trend may end [36]. - **Price Outlook**: The supply is excessive, and the demand is insufficient. It is recommended to rationally treat the current market and consider hedging for the industry [37]. Energy and Chemicals Rubber - **Market Quotes**: NR and RU showed an oscillating trend after continuous rises. The opening rates of tire enterprises changed, and the inventory of natural rubber increased slightly [40][41]. - **Outlook**: Rubber prices are likely to rise in the second half of the year. It is recommended to maintain a long - term bullish view, be cautious of short - term corrections, and consider a spread trading strategy [42]. Crude Oil - **Market Quotes**: WTI crude oil declined, Brent remained unchanged, and INE crude oil rose. US inventory data showed different trends [43]. - **Outlook**: The fundamentals are healthy, and there is upward momentum, but the seasonal demand weakness in August will limit the upward space. It is recommended to go long on dips and take profits [44]. Methanol - **Market Quotes**: The methanol futures price declined, and the spot price rose. The market is driven by news, and the volatility is high [45]. - **Outlook**: The upstream and downstream are likely to be in a weak supply - demand situation. It is recommended to wait and see after a sharp rise [45]. Urea - **Market Quotes**: The urea futures price declined, and the spot price was stable. The market was affected by the "anti - involution" policy [46]. - **Outlook**: The supply and demand are acceptable, and the price has support below but is limited above. It is recommended not to chase the high [46]. Styrene - **Market Quotes**: The spot and futures prices of styrene declined, and the basis strengthened. The cost support exists, and the inventory increased [47][48]. - **Outlook**: The BZN spread may repair, and the price is expected to fluctuate with the cost [48]. PVC - **Market Quotes**: The PVC futures price declined, and the spot price decreased slightly. The cost was stable, the supply increased, and the demand decreased [49]. - **Outlook**: The fundamentals have improved, but there is still pressure. It is necessary to be cautious of the risk of sentiment ebbing [49]. Ethylene Glycol - **Market Quotes**: The EG09 contract declined, and the spot price rose. The supply decreased, the demand decreased, and the inventory decreased [50]. - **Outlook**: The fundamentals are expected to weaken, but the short - term valuation has support due to unexpected events [50]. PTA - **Market Quotes**: The PTA09 contract declined, and the spot price rose. The supply and demand were relatively stable, and the inventory increased [51]. - **Outlook**: The supply is expected to increase, and the demand is in the off - season. It is recommended to look for long - term opportunities following PX on dips [51]. p - Xylene - **Market Quotes**: The PX09 contract declined. The supply and demand were relatively stable, and the inventory decreased [52]. - **Outlook**: The short - term negative feedback pressure is small, and it is recommended to look for long - term opportunities following crude oil on dips [52]. Polyethylene (PE) - **Market Quotes**: The PE futures price declined, and the spot price rose. The upstream opening rate increased slightly, and the inventory changed [53]. - **Outlook**: The price is expected to oscillate downward, with the short - term contradiction shifting from cost - driven to inventory - driven [53]. Polypropylene (PP) - **Market Quotes**: The PP futures price declined, and the spot price rose. The upstream opening rate increased, and the downstream opening rate decreased [55]. - **Outlook**: In the off - season, the supply and demand are weak. It is expected that the price will be bearish in July, and it is recommended to wait and see [54][55]. Agricultural Products Hogs - **Market Quotes**: The domestic hog price mainly declined. The supply was sufficient, and the demand was weak [57]. - **Outlook**: The short - term futures and spot prices deviate. The market has high expectations, but there is also hedging pressure. It is necessary to pay attention to the pressure after the seasonal rebound [57]. Eggs - **Market Quotes**: The national egg price mainly rose. The supply pressure decreased, and the demand improved slightly [58]. - **Outlook**: The spot price has bottomed out, and the short - term price is oscillating. For post - festival contracts, pay attention to short - selling opportunities after the rebound [58]. Soybean and Rapeseed Meal - **Market Quotes**: US soybean and soybean meal futures declined at night. The domestic soybean meal spot price rose, and the transaction was weak [59]. - **Outlook**: The external soybean market is in a low - valuation and oversupply state. It is recommended to go long on dips in the cost range of soybean meal and wait for new driving factors [59][61]. Oils and Fats - **Market Quotes**: Malaysian palm oil exports and production data showed different trends. Domestic palm oil oscillated and declined, and the net long positions of foreign capital in three major oils decreased [62][63]. - **Outlook**: The US biodiesel policy supports the price center. Palm oil may maintain stable inventory in the short - term and has a rising expectation in the fourth - quarter. However, the upward space is limited, and it is recommended to view it with an oscillating perspective [64]. Sugar - **Market Quotes**: Zhengzhou sugar futures prices continued to oscillate. The spot price was relatively stable [65]. - **Outlook**: The import supply pressure may increase in the second half of the year, and the probability of a continued decline in sugar prices is high [66]. Cotton - **Market Quotes**: Zhengzhou cotton futures prices continued to oscillate. The spot price was stable. The expected new - cotton yield increased [67]. - **Outlook**: The cotton price has rebounded, but the downstream consumption is average. The possible issuance of import quotas is a potential negative factor [67].

Core Viewpoint - The article discusses the impact of the "anti-involution" policy on supply contraction expectations in various industries, particularly focusing on coal and other commodities, which have shown significant price increases in the futures market due to anticipated production restrictions [1][7][12]. Group 1: Commodity Price Movements - Coal futures, particularly the焦煤期货主力2509 contract, surged by 11% on July 23, with a monthly increase exceeding 34% [1]. - Other commodities have also seen price increases, with多晶硅2509 rising over 50% and焦炭2509 increasing nearly 20% since July [3]. - The glass futures market has experienced a rise of approximately 20% since July, while the actual spot price of glass has only increased by about 7% [6][15]. Group 2: Market Dynamics and Policy Implications - The "anti-involution" trend is spreading from the photovoltaic and steel industries to coal and building materials, indicating a broader market response [5]. - The current market reaction is primarily speculative, with actual spot markets not reflecting the same intensity as futures markets [6][17]. - The central government's focus on eliminating low-price competition and promoting quality improvements is expected to lead to more structured production policies [9][10]. Group 3: Future Expectations and Uncertainties - The implementation of stricter production regulations could lead to a significant reduction in coal output, with estimates suggesting a potential decrease of 43 million tons in Inner Mongolia alone [10]. - The upcoming release of new policies aimed at stabilizing growth in key industries, including steel and non-ferrous metals, is anticipated to further influence commodity prices [11][12]. - The actual impact of the "anti-involution" policies on supply and pricing remains uncertain, with market participants closely monitoring the situation [17].

Investment Rating - The report maintains an "Overweight" rating for the agriculture, forestry, animal husbandry, and fishery industry, expecting the industry index to outperform the market index by over 10% in the next six months [2][5]. Core Insights - The recent rebound in the agriculture, forestry, animal husbandry, and fishery industry is attributed to the expectation of supply reduction in pig and poultry farming, leading to improved industry profitability [4]. - As of July 22, 2025, the overall price-to-book (PB) ratio for the SW agriculture, forestry, animal husbandry, and fishery industry is approximately 2.77 times, indicating a recovery but still at a relatively low historical level [4]. - The number of breeding sows in China remains high, with a stock of 40.43 million as of June 2025, indicating significant potential for supply reduction [4]. - The average price of white feather broilers is reported at 6.4 yuan per kilogram, with a loss of 2.93 yuan per bird, reflecting ongoing profitability challenges in the poultry sector [4]. Summary by Sections Industry Overview - The agriculture, forestry, animal husbandry, and fishery industry has shown resilience, outperforming the Shanghai and Shenzhen 300 Index recently, particularly driven by the livestock sector [2][4]. Supply and Demand Dynamics - The supply of breeding sows is expected to decrease, with projections indicating a rebound in pig output in Q3 2025, followed by a potential decline in Q4 [4]. - The chicken supply is also anticipated to remain high, with the introduction of new breeding stock leading to increased availability in the latter half of 2025 [4]. Investment Strategy - The report suggests that the breeding sow stock has considerable room for reduction, making it a favorable time to invest in pig farming companies, which have shown good profitability due to cost reduction and increased output [4]. - For poultry farming, while current supply is robust and prices are under pressure, there are opportunities for marginal profit improvement as supply dynamics shift [4]. - Recommended stocks for investment include Muyuan Foods (002714), Wens Foodstuff Group (300498), and others listed in the report [4].

【冠通研究】 情绪放缓 制作日期：2025 年 7 月 22 日 【策略分析】 尿素今日盘面高开低走，尾盘小幅收涨。近期市场情绪走强，尿素现货价 格上行，上游工厂收单良好，但内需支撑有限，后续上涨幅度预计缩窄。基本 面来看，上周尿素上游工厂装置多发停产，日产跌至 20 万吨以下，预计本周 起，停产检修装置陆续复产，本周产量将有小幅增加，反内卷举措继续发酵， 尿素老旧装置占比高，市场对去产能预期增加；需求端，玉米追肥已至尾声， 零星补货为主，预计月底前将收尾。复合肥工厂秋季肥生产销售的初级阶段， 开工负荷变动幅度小，目前对原料尿素采购约在三成左右，目前订单以预收款 为主，厂内成品库存大幅累积，对尿素需求弹性大，短期内有高价抵触情绪。 库存继续去化，主要系出口集港，及局域性农需拿货。整体来说，反内卷举措 对尿素老旧装置产能去化的情绪今日有放缓，内需拖累上涨动能不足，行情出 现回调趋势，但大宗商品近期情绪高涨，尿素短期依然震荡偏多。 【期现行情】 期货方面：尿素主力 2509 合约 1820 元/吨高开低走，日内偏强震荡，最终 收于 1817 元/吨，收成一根阳线，涨跌+0.55%，持仓量 191764 手（-41 ...

Investment Rating - The report maintains an "Overweight" rating for the agriculture, forestry, animal husbandry, and fishery industry [45][46]. Core Insights - The SW agriculture, forestry, animal husbandry, and fishery industry slightly underperformed the CSI 300 index, with an increase of 0.74% from July 4 to July 17, 2025, lagging behind the index by approximately 0.93 percentage points [11][14]. - Most sub-sectors recorded positive returns during the same period, with animal health, agricultural product processing, breeding, and planting sectors increasing by 8.71%, 2.56%, 1.42%, and 0.46% respectively, while the fishery and feed sectors saw declines of 1.8% and 4.2% [14][15]. - The overall price-to-book (PB) ratio for the industry is approximately 2.66 times, indicating a slight recovery, but still remains at a historical low, around 59.2% of the valuation center since 2006 [21][22]. Industry Key Data - **Pig Farming**: - The average price of external three yuan pigs decreased from 15.31 CNY/kg to 14.37 CNY/kg between July 4 and July 17, 2025 [24]. - As of June 2025, the breeding sow inventory reached 40.43 million heads, slightly up by 0.02% from the previous month, which is 103.7% of the normal holding capacity of 39 million heads [24]. - The profit from self-breeding pigs is 90.89 CNY/head, while the profit from purchased piglets is -18.66 CNY/head, both showing a decline compared to the previous week [29]. - **Poultry Farming**: - The average price of broiler chicks in major production areas was 1.37 CNY/chick, showing a slight increase, while the average price of layer chicks was 3.88 CNY/chick, which slightly decreased [31]. - The average price of white feather broilers was 6.4 CNY/kg, which has also decreased, with a profit of -2.93 CNY/chick, showing a slight recovery compared to the previous week [34]. - **Feed Costs**: - The spot price of corn was 2409.12 CNY/ton, showing a decline, while soybean meal prices were 2952 CNY/ton, which fluctuated in the last two weeks [26]. Industry Outlook - The report anticipates an overall increase in pig production capacity this year, which may suppress pig prices. The breeding sow inventory has some room for reduction [45]. - The poultry sector continues to face pressure on profitability, with opportunities for marginal improvement [45]. - In the feed sector, there are opportunities arising from increased concentration among leading companies, cost reduction, and overseas expansion [45]. - The domestic pet market is expected to maintain rapid growth, with leading domestic brands likely to see significant growth [45]. Recommended Stocks - Key stocks to focus on include: - Muyuan Foods (002714) - Wens Foodstuff Group (300498) - Shennong Development (002299) - Haida Group (002311) - Bio-Stock (600201) - Zhongchong Co., Ltd. (002891) - Yiyi Co., Ltd. (001206) [46].

Report Information - Report Name: Zhengxin Futures Egg Weekly Report 2025-7-14 [2] - Research Group: Zhengxin Futures Research Institute - Agricultural Products Research Group [2] Industry Investment Rating - Overall Rating: Oscillating [3] Core Viewpoints - Supply: National egg spot prices have generally risen recently. The traditional price increase from July to August is driven by factors such as accelerated chicken culling during the rainy season, Mid-Autumn Festival stockpiling, and decreased egg production due to high temperatures. However, this year's Mid-Autumn Festival is close to National Day, and the limited industry losses have led to insufficient capacity reduction. The seasonal rebound is expected to be delayed and limited in amplitude [3]. - Demand: This week, the sales volume in the main sales areas increased slightly, the shipping volume in the main production areas fluctuated slightly, and the inventory in the circulation and production links decreased significantly. As the rainy season nears its end, the egg storage conditions have improved, the purchasing意愿 of egg merchants has increased, and the sales speed and trading volume in the sales areas have increased [3]. - Profit: The breeding profit has continued to decline, significantly lower than the comprehensive cost, and at the lowest level in the same period in the past four years. This week, the egg basis decreased slightly, and the premium of the near-month futures contract is at a historical high [3]. - Price and Volume: Currently, the spread between the near and far futures contracts of eggs has decreased slightly and is at a moderately high level. From the perspective of positions, the institutional positions of the main egg futures contract show a net short and oscillating state [3]. - Strategy: The premium of the near-month contract is at a historical high, and the near end faces significant spot selling pressure. The far end is expected to gradually improve as the capacity reduction expectation strengthens. Before the capacity is cleared due to breeding profit losses, the pattern of weak near and strong far in the egg futures is expected to continue. Operationally, considering that the spread between the near and far futures contracts is at a relatively high level, 9 - 11 and 9 - 12 reverse spreads can still be considered [3]. Summary by Directory Price and Volume Analysis - Spot Price: Analyzes the main production area price vs. the main sales area price [4][5] - Egg Basis: Analyzes the basis of each egg futures contract [7][8] - Egg Spread: Analyzes the spread between each egg futures contract [10][11] - Futures Institutional Net Position: Analyzes the long - short difference and ratio of institutional positions in the September egg futures contract [13][15] Supply Analysis - Laying Hen Inventory: Analyzes the laying hen inventory and its structure [16][17] - Chicken Culling Situation: Analyzes the chicken culling price and the average culling age [18][19] - Replenishment Situation: Analyzes the price of commercial laying hen chicks and the utilization rate of hatching eggs [21][22] - Large and Small Egg Situation: Analyzes the prices of large and small eggs and the seasonal chart of the price difference [23][24] Demand Analysis - Shipping Volume and Sales Volume: Analyzes the sales volume in the main sales areas and the shipping volume in the main production areas [25][26] - Inventory: Analyzes the inventory in the production and circulation links [27][28] - Substitutes: Analyzes the seasonal charts of the price ratios of eggs to pork and vegetables [31][33] Profit Analysis - Breeding Profit: Analyzes the current and expected profits and the comprehensive breeding profit of laying hens [34][35] - Egg - Feed Price Ratio: Analyzes the egg - feed price ratio, its equilibrium point, and the seasonal chart [37][38]

Summary of Conference Call Records Industry Overview - **Home Appliance Industry**: The home appliance industry is experiencing a shift in production to Vietnam due to tariff advantages and the U.S. imposing tariffs on Chinese goods. Companies like Ecovacs, Roborock, and Dechang have established factories in Vietnam, while Midea and Zhaochi are expanding their production lines there [1][3]. - **Pharmaceutical Industry**: The innovative drug sector is a focal point, with business development (BD) generating significant cash flow, which is being reinvested into research and development. Companies like Baicheng Pharmaceutical and Tigermed are highlighted for their potential in this area [1][5]. Key Insights - **Tariff Impact**: The U.S. has a 20% tariff agreement with Vietnam, while other Southeast Asian countries face tariffs above 30%. This makes Vietnam an attractive location for production, allowing companies to benefit from lower tariffs when exporting to the U.S. [2]. - **Domestic Market Strength**: The domestic home appliance market remains robust, with strong growth post-618 promotion. The air conditioning sector is seeing high e-commerce growth rates, supported by national subsidy policies [1][4]. - **Expected Performance**: Companies in the export chain, particularly leading firms, are expected to see clear performance growth as the second quarter may represent a bottom for these companies [3]. Additional Observations - **Consumer Electronics**: Companies like Ecovacs and Roborock are well-positioned due to their production capabilities and supply chain stability in Vietnam. The upcoming Black Friday and Christmas shopping seasons are expected to boost demand [3]. - **Two-Wheeler Market**: The two-wheeler market is projected to see significant growth, with Yadea expected to achieve a 50-60% increase in July. The market is benefiting from low base effects and policies encouraging trade-in and replenishment [10]. - **Pork Farming Sector**: The pork farming sector is currently in a cyclical downturn, with recommendations for companies with cost advantages like Muyuan Foods and Wen's Foodstuffs. Supply pressures are expected to increase in the second half of the year [12][13]. - **Pet Food Sector**: The pet food sector has seen growth in domestic sales, driven by local brands innovating and expanding their channels. Despite challenges from trade conflicts, companies are adapting by relocating production [11]. Recommendations - **Investment Focus**: Investors are advised to focus on companies with strong domestic performance and export potential, such as Ecovacs, Roborock, Hisense, TCL, and Haier [1][4]. - **Emerging Opportunities**: Companies like Jeya and Yuanfei Pet are expected to outperform due to market share gains and replenishment cycles in the third quarter [8][9]. This summary encapsulates the key points from the conference call records, highlighting the dynamics within the home appliance and pharmaceutical industries, as well as other relevant sectors.

Industry Overview - The pig farming sector is entering a new cycle due to the simultaneous decline in pig production capacity and the turning point in chicken prices, with a stronger supply-demand imbalance leading to potential price drops and reduced profits for farmers [1] - The supply side shows steady growth in market pig supply and increasing fat pig inventory, while the demand side is currently weak due to the summer off-season, resulting in a challenging pricing environment [1] - Policies are being implemented to optimize production capacity, including a reduction in the target for breeding sows by 1 million to 39.5 million and stricter environmental regulations [1] Chicken Industry Insights - The lowest point for yellow chicken prices may have passed, with expectations for marginal recovery in the second half of the year due to improving consumer demand and seasonal consumption patterns [2] - The current yellow chicken production capacity is at a low level, and the price elasticity is primarily influenced by demand-side changes, with potential for price increases in 2025 [2] - The industry is facing challenges with many producers experiencing losses, which may limit their willingness to invest in new stock, while recent bankruptcies among top companies could further reduce supply [2] Company Analysis Pig Farming Business - The company is integrating farmer resources and innovatively entrusting the breeding of sows to farm owners, which enhances farmer participation and allows for rapid expansion of output [3] - The company has developed a competitive breeding system that reduces the age at which pigs are ready for market by 12 days and lowers feed conversion ratios, resulting in significant cost advantages [3] - Through precise management practices, the company has achieved a reduction in feed consumption per sow and improved feed formulation, maintaining industry-leading cost levels despite unfavorable raw material conditions [3] Chicken Business - The company has established a leading research and development system in yellow chicken breeding, with a diverse genetic resource pool that meets market demands [4] - The company's market share in yellow chicken has doubled from 1.3% in 2018 to 2.6% in 2024, driven by an optimized product matrix [4] - The company is focusing on developing medium and slow-growing chicken products to align with changing consumer preferences and improve product quality [4] Slaughtering Business - The company is expanding its slaughtering and processing operations to create a comprehensive food ecosystem, leveraging vertical integration to enhance efficiency [5] - Collaborations with leading international firms are being utilized to adopt advanced technologies and management practices in food manufacturing [5] Investment Outlook - The new cycle logic in the pig farming sector is strengthening, with expectations of production capacity fluctuations and clearer cyclical trends [6] - The company is projected to achieve an average profit of approximately 300 RMB per pig, supporting a market valuation of 330 billion RMB based on expected output [6] - Given the anticipated market conditions, the company's stock price could see significant upside potential, with a target price exceeding 140 RMB, translating to over 154 HKD [6]

Report Summary 1. Investment Rating No investment rating for the industry is provided in the report. 2. Core View The egg futures market experienced intensified long - short battles last week. High egg - laying hen存栏 and adverse weather conditions put significant pressure on egg prices, but an increase in the number of culled chickens and rising procurement demand for cold - storage eggs provided support. In the short term, the market may continue to fluctuate. With the boost of the consumption peak season in the third quarter, egg prices are expected to have a phased recovery, but the annual price peak may be lower than that of last year [8][59]. 3. Section - by - Section Summary 3.1. Trend Review - **Futures Price**: The main contract of egg futures, JD2508, fluctuated last week. As of last Friday, it closed at 3,582 yuan per 500 kilograms, with a total trading volume of 125,885 lots, an open interest of 184,136 lots, and a weekly increase of 1.1% [5][12]. - **Spot Price**: The average price of eggs in the main producing areas last week was 2.70 yuan per catty, a week - on - week decrease of 6.25%; in the main consuming areas, it was 2.76 yuan per catty, a week - on - week decrease of 2.47%. The price in the main producing areas first declined and then stabilized, while that in the main consuming areas showed a weakening trend [7][16]. - **Chick Price**: The chick price was generally weak last week. The average price of commercial - generation chicks in key national regions was 3.88 yuan per chick, a week - on - week decrease of 0.02 yuan per chick, a decrease of 0.51%, and a year - on - year increase of 31.08%. The utilization rate of hatching eggs was about 60% - 80% [22]. - **Old Hen Price**: The price of old hens fluctuated strongly last week. The average price of old hens in representative markets in key producing areas was 4.65 yuan per catty, a week - on - week increase of 0.03 yuan per catty, an increase of 0.65% [26]. 3.2. Fundamental Analysis - **Supply Side** - **Egg - laying Hen存栏**: As of June, the national egg - laying hen存栏 was about 1.27 billion, a year - on - year increase of 5.75%. The supply was abundant, and the contradiction between supply and demand would be further intensified [31]. - **Shipping Volume in Producing Areas**: The shipping volume in representative markets in the main producing areas decreased by 0.63% week - on - week and 17.52% year - on - year. It first weakened and then increased [35]. - **Old Hen Slaughter**: The total slaughter volume of old hens last week was 529,200, a week - on - week decrease of 1.54%. The average slaughter age was 503 days, and the slaughter volume decreased with a slightly earlier slaughter age [41]. - **Demand Side** - **Arrival Volume in Consuming Areas**: As of last Thursday, the arrival volume in the Beijing market increased by 2.06% week - on - week, while that in the Guangdong market decreased by 20.03% week - on - week. The overall downstream consumption demand was average [45]. - **Sales Volume in Consuming Areas**: The egg sales volume last week was 5,928.27 tons, a week - on - week decrease of 3.56% [49]. - **Inventory Situation**: The inventory in the production link last week was 1.23 days, a week - on - week increase of 17.14%; the inventory in the circulation link was 1.52 days, a week - on - week increase of 3.40%. The overall inventory increased slightly [53]. - **Egg - laying Hen Breeding Cost and Profit**: The egg - laying hen breeding cost last week was 3.55 yuan per catty, remaining flat week - on - week. The breeding profit was - 0.85 yuan per catty, a week - on - week decrease of 0.17 yuan per catty, a decrease of 25.00%. The egg - laying hen breeding loss further expanded [57]. 3.3. Market Outlook The egg futures market may continue to fluctuate in the short term. With the boost of the third - quarter consumption peak season, egg prices are expected to have a phased recovery, but the annual price peak may be lower than that of last year [59]. 3.4. Operation Strategy Due to the short - term market uncertainty, it is recommended to wait and see. Continuously monitor the signals of capacity reduction and demand recovery in July [10][60].

Core Viewpoint - The Chinese pig market in the first half of 2025 is experiencing a "spot price decline and wide fluctuations in futures," with overall prices showing a downward trend but at a lower rate than previously expected [1] Price Trends - As of the end of June, the average price of pigs in producing areas is 14.86 yuan/kg, down by 0.91 yuan/kg, while in selling areas, the average price is 15.35 yuan/kg, down by 0.94 yuan/kg [1] Market Outlook - Analysts predict that the pig market will see an increase in both supply and demand in the second half of the year, potentially leading to a short-term price rebound supported by seasonal demand recovery and market sentiment [1] Influencing Factors - Short-term price movements will be influenced by the seasonal demand increase in the third quarter and the sentiment around holding back pigs from the market, while long-term price performance will depend on the sustainability of capacity reduction [1]