Core Viewpoint - The domestic pig farming industry is experiencing a weak price environment due to strong supply and weak demand, leading to a slow recovery in profitability for listed pig companies [3][4][9] Group 1: Sales Performance of Listed Pig Companies - In June, the average sales price of live pigs for listed companies generally declined year-on-year and month-on-month, with a drop of 15% to 20% [4][5] - Muyuan Foods (002714.SZ) achieved a record monthly sales volume of 7.019 million pigs in June, with a month-on-month increase of 9.57%, resulting in a sales revenue of 12.799 billion yuan, a year-on-year increase of 27.65% [5][6] - Wens Foodstuff Group (300498.SZ) maintained a sales volume of over 3 million pigs, selling 3.0073 million pigs in June, with a revenue of 4.92 billion yuan, reflecting a month-on-month price drop of 1.98% [6] - Smaller pig companies showed significant sales variation, with some doubling their sales while others saw a decrease of over 10% [4][5] Group 2: Market Trends and Price Movements - The pig price hit a 16-month low in June, dropping to 13.96 yuan/kg, but began to recover in July, reaching 15.31 yuan/kg, the highest since the Spring Festival [4][8] - The agricultural authorities are guiding the industry towards destocking and capacity reduction, indicating that the current pig cycle has moved past its bottom [3][9] - Analysts suggest that the "anti-involution" measures may help stabilize prices and improve profitability in the long term, as the industry shifts towards higher quality competition [9][10] Group 3: Future Outlook - The Ministry of Agriculture plans to reduce the breeding sow inventory by approximately 1 million heads to optimize production and improve quality [10] - The industry is expected to enter a new era of high-quality competition, with a focus on cost management and disease prevention becoming critical for large-scale farming enterprises [10] - The supply constraints in the pig industry may become a new normal, with limited expansion expected in the coming years, potentially leading to improved profitability for quality enterprises [10]

1. Report Industry Investment Rating No information provided. 2. Core View of the Report The demand side continues to be weak, and the supply - side pressure is expected to ease in July. There is a small upside potential for the spot and futures prices in the third quarter, but significant price increases lack support. The LH2509 contract is expected to trade with a slight upward bias in the short - term [105]. 3. Summary by Directory 3.1 First Part: Market Review - **External Market**: The price of the CME lean hog main contract dropped by 3.97% from June 26 to July 3, 2025, but was up 18.45% year - on - year. The total open interest of CME lean hog futures contracts decreased by 1.28% month - on - month but increased by 42.31% year - on - year. The net long positions of futures and options funds decreased by 621 month - on - month but increased by 144,848 year - on - year [7]. - **Domestic Futures and Spot**: The closing price of the Dalian Commodity Exchange's live hog main contract rose 2.14% from June 27 to July 4, 2025, but was down 19.84% year - on - year. The average ex - farm price of Henan's outer ternary live hogs increased by 1.68% month - on - month but decreased by 17.99% year - on - year. The basis in Henan weakened [12]. - **Contract Price and Spread**: Last week, the prices of all live hog contracts increased with similar magnitudes. The spread between LH09 and LH11 contracts first rose and then fell, showing an overall upward trend [19]. - **Warehouse Receipts, Volume, and Open Interest**: The number of registered warehouse receipts of COFCO Meat decreased by 375, while that of Dekang Agriculture increased by 75. The trading volume nearly doubled, and the open interest was stable [20]. 3.2 Second Part: Fundamental Analysis - **Inventory**: The live hog inventory increased slightly month - on - month and was higher year - on - year, with the proportion of standard hogs increasing [28]. - **Sow Prices**: The price of二元sows remained stable, while the price of culled sows increased slightly [33]. - **Sow Inventory**: The inventory of reproductive sows in sample farms was relatively high year - on - year, and the national inventory of reproductive sows was 103.56% of the normal level, in the green zone [36]. - **Sow Culling and Slaughter**: The culling volume of reproductive sows increased slightly month - on - month, while the slaughter volume of culled sows decreased [40]. - **Piglet Prices and Sales**: The prices of piglets stopped falling and stabilized. The number of piglet births and sales were at relatively high levels [45][48]. - **Pork Prices**: Pork prices strengthened, and the pig - grain ratio rebounded [53][57]. - **Farming Profits**: The profit of self - breeding and self - raising improved, while the profit of purchasing piglets for fattening was at the break - even point [60]. - **Slaughter and Sales**: The proportion of fat hogs at slaughter was high, and the slaughter volume increased both month - on - month and year - on - year [62][66]. - **Price Spreads and Weights**: The standard - fat price spread was almost zero, and the average slaughter weight was stable [71]. - **Second - Fattening**: The profit of second - fattening rebounded from a low level, and the proportion of second - fattening sales remained stable at a low level. The utilization rate of second - fattening pens increased significantly [76][79]. - **Slaughter and Sales**: The gross margin between live hogs and pork and the price of pork strengthened. The slaughter profit was negative, and the post - slaughter settlement price increased. The slaughter volume decreased due to low enthusiasm among slaughter enterprises [83][86][89]. - **Fresh and Frozen Sales**: The fresh sales volume decreased significantly, the fresh - frozen price spread widened slightly, and the frozen pork storage rate was at a low level [92][95][98]. 3.3 Third Part: Future Outlook - **Supply Side**: Under the "anti - involution" policy, the regulation of live hog production capacity may be tightened. The inventory of reproductive sows is in the green zone. The live hog inventory increased slightly month - on - month and was higher year - on - year. The number of piglet births increased month - on - month, and the price stopped falling. The slaughter volume in July may decrease slightly. The second - fattening profit rebounded from a low level, and the current replenishment enthusiasm is high but may weaken after price increases [105]. - **Demand Side**: The profit of slaughter enterprises is continuously negative, and the enthusiasm for slaughter is low. Affected by seasonality, the terminal sales of pork are poor, and the fresh sales volume has decreased significantly. The slaughter enterprises have a pessimistic outlook on the future, and the frozen pork storage rate is low [105]. - **Price Outlook**: The demand side is weak, and the supply - side pressure is expected to ease in July. There is a small upside potential for spot and futures prices in the third quarter, but significant price increases lack support. The LH2509 contract is expected to trade with a slight upward bias in the short - term [105].

Investment Rating - The report maintains a "Positive" investment rating for the agricultural products sector [11]. Core Insights - The pig farming industry has entered a clearing phase since 2021, with capital expenditure from large enterprises continuing to contract, leading to a recovery trend in industry ROE levels. Current industry capacity remains relatively excessive, and if policies are effectively implemented, it is expected to enhance profitability and stability in the sector. Attention should be paid to investment opportunities in leading enterprises [2][6][9]. Summary by Sections Industry Overview - The pig farming industry is in a mature stage, characterized by a significant increase in the scale of operations over the past 20 years. The proportion of large-scale farms (over 500 heads) has risen from 8.8% in 2000 to 70% in 2024, indicating a shift towards concentration and professionalization in the industry [7][16]. Policy Impact - Recent policies have emphasized capacity control and high-quality development. The current breeding sow inventory exceeds the normal level of 39 million heads, indicating an oversupply in the industry. The government has been proactive in promoting capacity control through various policy documents [30][31]. Trends and Investment Opportunities - The report identifies two major trends in the pig farming industry: 1. An expected increase in industry ROE levels with reduced volatility, highlighting the advantages of quality enterprises. The average ROE is projected to rise from -10% in 2021 to 21% in 2024 [9][45]. 2. An increase in free cash flow levels, leading to significant shareholder returns for quality enterprises. The industry is expected to generate a total free cash flow of 23 billion yuan in 2024, a 100% increase year-on-year [54][60]. Recommended Companies - The report specifically recommends investing in leading companies in the sector, including Muyuan Foods, Wens Foodstuff Group, Juxing Agriculture, and Shennong Group, as their valuations are currently at historical lows [2][9].

Group 1 - The average price of external three-yuan pigs in China on June 13 was 14.02 yuan/kg, a week-on-week decrease of 0.21%. The average price of 15 kg piglets was 32.89 yuan/kg, down 4.69% week-on-week [1] - The average weight of market pigs this week was 128.82 kg, a decrease of 0.35 kg week-on-week. The national frozen product storage capacity rate was 13.89%, an increase of 0.09 percentage points [1] - After a short-term decline in pig prices, the breeding sector's resistance to price drops has increased, leading to a gradual easing of large-scale slaughtering. However, terminal demand remains weak due to high temperatures, resulting in low slaughter volumes and insufficient terminal consumption [1] Group 2 - The future pig prices are expected to return to the cyclical logic based on the number of breeding sows, influenced by the clearance of backlog fat pigs and reduced secondary fattening [1] - Policy factors are crucial in regulating pig production capacity and influencing industry development trends, with a focus on the potential impact of industrial policies on industry behavior [1] - Investors without stock accounts may consider the Guotai Zhongzheng Livestock Breeding ETF Link A (012724) and Guotai Zhongzheng Livestock Breeding ETF Link C (012725) [1]

Group 1 - The China Agricultural Economic and Development Research Institute released the "China Agricultural Industry Development Report 2025," predicting that China's agricultural production will continue to improve, with total grain output expected to reach 1.426 trillion jin by 2025 [1] - The report indicates that in 2024, China's grain production will surpass 1.4 trillion jin for the first time, with an increase of 5.1 jin per mu in yield, and record high production of eggs and aquatic products [1] - The livestock ETF has shown strong performance, with an average daily trading volume of 21.78 million yuan over the past year and a 4.24% annualized return exceeding the benchmark over the last three months [1] Group 2 - The pig farming sector is currently facing constraints in supply due to factors such as the reduction of breeding sows and the early market release of commercial pigs, which may lead to favorable conditions for pig prices in the long term [2] - The valuation levels of the pig farming sector are at historical lows, presenting good cost-performance ratios, and the advantages of leading companies in the industry are enhancing their dividend attributes [2] - The top ten weighted stocks in the China Livestock Breeding Index account for 68.9% of the index, including companies like Haida Group, Muyuan Foods, and Wens Foodstuff [2]

Summary of the Pig Industry Conference Call Industry Overview - The pig industry is expected to see a supply increase of over 10% year-on-year in 2025, despite a slight decline in the total number of breeding sows compared to last year [1][4] - The average number of breeding sows in large-scale farms is increasing by approximately 1%, replacing inefficient smallholder production [1][5] - Government policies are limiting the expansion of leading enterprises, which may impact future production capacity [1][6] Key Points and Arguments - Current production capacity control measures include restrictions on the number of breeding sows for large enterprises and major producing provinces, as well as financial restrictions on credit and public financing [1][6] - The market supply and demand for pigs is expected to slightly decrease in the coming months, with forward contract prices below 13 RMB/kg, which may suppress the motivation for replenishing breeding sows [1][7] - The average price for pigs in 2025 is projected to be above 15 RMB, with recent wholesale market prices at 14.7 RMB [1][8] Short-term Market Dynamics - The pig market is currently balanced, with profits around 50 RMB per head if weight is controlled properly [2] - The supply pressure has peaked, and while there may be slight pressure in June, overall prices are expected to remain stable [2][11] - The requirement to lower slaughter weights is stabilizing prices, as supply decreases and large enterprises set a price floor of 7 RMB/kg [11] Long-term Supply Trends - The supply of pigs in 2025 is expected to grow slightly compared to 2024, with government policies aimed at stabilizing the breeding market and increasing the concentration of large enterprises [3][9] - The overall cost of production is estimated to be between 14 and 14.5 RMB, influenced by stable feed prices and improved production efficiency [17] Government Policies and Their Impact - The government is implementing various policies to stabilize the breeding market, including restrictions on large enterprises and financial measures to control debt levels [9][10] - The enforcement of policies against overstocking and secondary fattening is being managed through economic penalties and compliance measures [19][20] Challenges and Risks - The industry faces challenges from disease outbreaks, particularly African swine fever, which has affected prices in southern regions [26] - The current inventory of frozen products is low, at 15% to 17%, indicating limited replenishment activity [27] Future Market Expectations - The market outlook for 2026 is expected to improve, with profits potentially reaching around 100 to 200 RMB, depending on production control and stable meat supply [29] - The potential for a breeding sow leasing model exists, particularly in southern regions with favorable conditions, but faces challenges due to disease control and management requirements [28][30]

生猪：又到布局时，一线专家怎么看 20250602 摘要 如何看待政策执行过程中的潜在影响？ 春节后猪价坚挺，前五个月盈利优于去年同期，主要因冻品库存低，春 节后有库存积压，且官方及第三方数据可能高估了去年基础产能和新生 指数数量，从而低估了今年上半年供给。 下半年生猪供给或高于去年，但增幅预计小于 10%，低于期货市场悲观 预期。去年下半年均价 18 元/公斤，目前 14.5 元/公斤，降幅近 20%。 若按期货 13.5 元/公斤均价，降幅超 20%过于悲观。 多部门联合调控生猪产能，旨在提振价格，修复行业盈利，降低负债风 险。上市公司整体负债已从高峰 4,500 多亿降至 3,000 多亿，但负债率 仍较高。 若能有效执行降重政策至 125 斤，将显著提升养殖效益，减少 3,400 万 头出栏量。低端企业已响应降重销售，下半年价格预期或更乐观，但需 观察具体执行情况。 当前低利率和信贷宽松环境为行业提供融资便利，但货币政策转向将带 来高债务风险。农业部和央行希望提升物价水平，猪肉价格对 CPI 影响 较大，需减少同比降幅。 Q&A 当前生猪行业的情况如何，包括投资机会？ 去年下半年，农业部在官方媒体上对 ...

Focus Events - Four companies, including *ST Xulan and *ST Jiayu, will officially delist from A-shares on April 30, 2025, following announcements from the Shenzhen Stock Exchange regarding their termination of listing decisions [1][1][1] Banking Sector - Seven major banks, including Industrial and Commercial Bank of China and Agricultural Bank of China, announced plans to abolish their supervisory boards, pending approval from their respective shareholder meetings [2][2][2] Macro News - The People's Bank of China held a meeting to implement the overall statistical system for the "Five Major Articles" in finance, emphasizing the importance of statistical work and establishing a comprehensive "1+N" statistical system [3][3][3] Industry Dynamics - The Ministry of Industry and Information Technology issued a notice to accelerate the cultivation of pilot testing platforms in manufacturing, focusing on optimizing the layout and upgrading key platforms [5][5][5] - The Ministry of Agriculture and Rural Affairs announced a plan to continuously adjust and optimize pig production capacity, implementing a monitoring and early warning system for production [7][7][7] Company Focus - Guotai Junan Securities reported a 391.78% increase in net profit for Q1 2025, reaching 12.24 billion yuan, with total assets nearing 1.69 trillion yuan [10][10][10] - Xinhua Insurance plans to establish a 20 billion yuan fund in collaboration with China Life, targeting A+H shares of large listed companies [11][11][11] - Tianqi Lithium achieved a net profit of 104 million yuan in Q1 2025, recovering from a loss of 389.7 million yuan in the same period last year [12][12][12] - Ganfeng Lithium reported a net loss of 356 million yuan in Q1 2025, with a 25.43% decline in revenue [12][12][12] - Longi Green Energy posted a net loss of 8.618 billion yuan for 2024, with a 36.23% decrease in revenue [13][13][13] - Air China reported a net loss of 2.044 billion yuan in Q1 2025, with a slight revenue decline of 0.11% [14][14][14] - Industrial and Commercial Bank of China recorded a revenue of 212.77 billion yuan in Q1 2025, down 3.22% year-on-year [15][15][15] - Saisir reported a 240.6% increase in net profit for Q1 2025, despite a 27.91% decrease in total revenue [16][17] - Kweichow Moutai's net profit grew by 11.56% in Q1 2025, with revenue increasing by 10.54% [18][18][18] - Northern Rare Earth achieved a net profit increase of 727% in Q1 2025, with revenue up 61.19% [19][19][19] - China Life reported a 39.5% increase in net profit for Q1 2025, with total premiums reaching 354.4 billion yuan [20][20][20] - Pianzaihuang's net profit increased by 2.59% in Q1 2025, despite a slight revenue decline [21][21][21] - CITIC Securities reported a 32% increase in net profit for Q1 2025, with revenue up 29.13% [22][22][22] - Zhengzhou Bank's total assets surpassed 700 billion yuan for the first time, with a 4.98% increase in net profit for Q1 2025 [23][23][23]

Core Viewpoint - The Ministry of Agriculture and Rural Affairs is implementing measures to continuously adjust and optimize pig production capacity, focusing on controlling the breeding sow inventory and guiding farmers in optimizing their breeding structures [1] Group 1: Policy Implementation - The Ministry has issued a notice regarding the "Implementation Plan for the Feed Saving Action in Animal Husbandry," which emphasizes the need for ongoing adjustments to pig production capacity [1] - A production capacity regulation plan will be implemented to manage the breeding sow inventory effectively, referred to as the "total switch" for breeding sows [1] Group 2: Market Guidance - The Ministry aims to enhance the monitoring and early warning system for pig production capacity, ensuring timely market information is released [1] - Farmers will be guided on optimal timing for market release and scale of breeding operations to better match supply and demand [1]