Summary of Conference Call Records Industry Overview - The focus is on the pig farming sector and the pet food industry, with significant insights into market trends and investment opportunities for 2025 [1][2][3]. Key Points on Pig Farming Sector - **Current Market Conditions**: Despite a recent decline, pig prices remain high, with ongoing supply pressure expected to persist into 2025. Increased piglet restocking in the first half of the year will lead to greater slaughter pressure in the second half [1][2]. - **Policy Changes**: The National Development and Reform Commission (NDRC) has implemented measures to limit sow production capacity, secondary fattening, and weight reduction to achieve capacity reduction. These policies are expected to positively impact future capacity contraction [1][4]. - **Investment Recommendations**: Investment targets should consider asset structure safety margins, low-cost advantages, and slaughter flexibility. Top recommendations include Muyuan and Wens, with secondary recommendations for Shennong, Juxing Dekang, and Lihua [1][5]. Key Points on Pet Food Industry - **Market Performance**: The pet food market is performing well in 2025, with brands like Guobao's Maifudi seeing a 26% year-on-year growth in May, and Fuleijiate achieving a remarkable 147% growth [1][7][8]. - **Online Sales Growth**: In May 2025, Tmall's pet food sales grew by 2%, JD's by 23%, and Douyin's by 54%, leading to an overall growth of 16% across these platforms. High growth rates are noted for brands with significant direct sales [1][9]. - **Brand Performance**: Leading brands maintained strong growth, with Maifudi achieving a 32% increase and Fuleijiate 137% in the first five months of 2025 [1][11]. Additional Insights - **Industry Trends**: The pet food industry is transitioning towards mid-to-high-end product upgrades, driven by capital operations and increasing profit margins. The consumer acceptance of new products and scientific feeding methods remains high [1][12]. - **Market Concentration**: The concentration of the domestic pet food market is significantly lower than that of international markets, indicating potential for growth and increased competition [1][14]. - **Company Dynamics**: The number of registered pet-related companies peaked in 2023 but has since declined by over 12%, indicating a shift in the industry landscape and higher operational demands [1][13]. - **Future Outlook**: The domestic pet industry is expected to maintain high growth rates, with a focus on product quality as a key driver of consumer behavior. Despite high valuation levels, the industry is anticipated to continue its rapid development [1][17].

Investment Rating - The investment rating for the industry is "Strong Buy" for key companies such as Shengnong Development, Wens Foodstuff Group, and Lihua Co., Ltd. [3] Core Insights - The report indicates a decline in broiler chicken prices, leading to potential capacity reduction in yellow feathered chicken production. The demand side remains weak, resulting in losses for the broiler farming sector. [1][9] - The white feathered chicken sector shows signs of recovery with increased chick sales driven by seasonal restocking, although overall prices remain low. [9][10] - The yellow feathered chicken sector is experiencing losses, which may accelerate the exit of underperforming capacity. [19][24] Summary by Sections White Feathered Chicken - In May, the average price of broiler chicken was 7.41 yuan/kg, down 4.1% year-on-year and 0.1% month-on-month. The average price of chicken products was 8,874 yuan/ton, down 7% year-on-year and 0.4% month-on-month. The farming sector faced a slight loss of 0.07 yuan per bird. [9][10] - Chick sales increased due to seasonal restocking, with major companies like Yisheng selling 56.61 million chicks, up 11% year-on-year. [10] - The report anticipates a favorable outlook for the white chicken breeding sector, with expected strong demand for quality parent stock in 2025. [11][33] Yellow Feathered Chicken - The average price for fast-growing yellow chickens was 4.33 yuan/jin, down 19% year-on-year, while the price for Xueshan grass chickens was 6.52 yuan/jin, down 14.6% year-on-year. [23] - Major companies reported increased sales volumes, with Wens selling 108 million chickens, up 14.6% year-on-year. However, the overall supply remains relatively abundant, leading to price declines. [19][24] - The report suggests that the current low prices and costs in the yellow chicken sector may set the stage for future price increases as supply contracts. [24][33] Investment Recommendations - The report recommends focusing on integrated leading companies like Shengnong Development for white feathered chickens and Lihua Co., Ltd. for yellow feathered chickens, as they are expected to benefit from cost improvements and market recovery. [31][33]

Report Industry Investment Rating - Not provided in the content Core Viewpoints of the Report - In the short term, the domestic supply of live pigs and pork is relatively abundant, and pig prices will maintain a weak and volatile pattern. Short - term frozen meat purchases can help stabilize market confidence and curb the decline of pig prices. Measures such as regulating sow production capacity, banning secondary fattening speculation, and restricting slaughter weight mostly take a long time to show effects, especially regulating sow production capacity which may take about a year [4][48]. - Current policy regulation is a combination of "short - term emergency + long - term root - solving". The emergency measures are purchases and weight - limit orders to hedge the current excess pressure; the root - solving measures are production - limit orders and banning secondary fattening to promote production capacity clearance. The key to success lies in the implementation strength of leading enterprises and the speed of production capacity reduction. If the policies are implemented effectively, a turning point may come at the end of the third quarter [4][48]. - From June to August, the policy combination (especially purchases + weight - limit) may prevent a sharp decline in pig prices, but it is difficult to see a significant increase due to the off - season of consumption and abundant supply. If overweight pigs are sold in a concentrated manner, there is still a risk of losses. In the long - term, if the production - limit order is strictly enforced, the supply pressure in 2025 will ease. From the end of the third quarter, the supply will gradually tighten, and pig prices are expected to bottom out and rebound from the middle and late third quarter to the fourth quarter [4][48]. Summary According to Relevant Catalogs 1. Current Core Issues in the Live Pig Market 1.1 Overcapacity - As of the end of April, the national sow inventory was still 3.6% higher than the national regulatory benchmark level, and the process of reducing production capacity was slow. The root cause of overcapacity was the ineffective control of early - stage capacity expansion by leading enterprises and speculative replenishment by small and medium - sized farmers. High piglet prices in the first half of the year also delayed the culling of sows. Seasonal weakness in demand exacerbated the supply - demand contradiction [8]. 1.2 Intensified Supply Pressure - As of early June, the slaughter weight of domestic live pigs soared to over 140 kg, indicating a strong willingness to sell large - weight pigs. The supply of pork was abundant, and the enthusiasm for secondary fattening was low. Macro - control policies led to an oversupply of pork. Secondary fattening was banned in some provinces, and leading enterprises stopped selling fattening pigs for secondary fattening [18]. 1.3 Persistently Low Pig Prices - As of early June, the average domestic live pig slaughter price had fallen below 14 yuan/kg, hitting a new low for the same period in the past five years. Only leading enterprises were profitable in the self - breeding and self - fattening model, while small and medium - sized farmers and the model of purchasing piglets for fattening generally suffered losses [25]. 2. Policy Regulation Measures 2.1 Limiting Capacity Expansion - Current policies focus on source control, process supervision, and demand adjustment. Leading enterprises are required to suspend expanding sow production capacity, and the sow inventory should be controlled to a reasonable level. Inefficient sow farms will be forced to exit, and small and medium - sized farmers who actively cull sows will be subsidized. This will directly reduce the future supply of live pigs, but there is a lag in the effect of capacity reduction [33]. 2.2 Controlling Slaughter Weight - A maximum slaughter weight standard of 120 kg is set nationwide. Slaughterhouses and local animal husbandry supervision departments are responsible for joint supervision, and slaughterhouses are required to reject overweight pigs. Resource occupation fees will be levied in pilot provinces [35]. 2.3 Banning Secondary Fattening - The circulation of overweight pigs is cut off by banning secondary fattening. Leading enterprises are prohibited from selling fattening pigs for secondary fattening, and the business licenses of secondary fattening farms in some provinces are revoked. Illegal reselling is strictly investigated to accelerate the slaughter of large - weight pigs [36]. 2.4 Initiating Frozen Pork Purchases - Since the second quarter, the domestic pig - grain ratio has continued to decline and has fallen back to the second - level warning range. On June 11, the first round of frozen meat purchase and bidding work was launched, with a purchase volume of 10,000 tons [37]. 3. Policy Effect Evaluation and Impact 3.1 Short - Term Policy Effects - Secondary fattening has been effectively curbed. On June 11, 10,000 tons of frozen pork were purchased, and pig prices stopped falling and stabilized in the short term. However, the slaughter weight is still high, and the progress of capacity reduction is slow. The core contradiction of 140 - kg pig sales and the off - season of consumption has not been resolved [42][43]. 3.2 Analysis of Policy Tool Limitations - The policy of suspending new sows only stops the expansion of leading enterprises, but the existing sows are not culled. The weight - limit order has loopholes in implementation, and it takes 1 - 2 months to digest existing 140 - kg pigs. Banning secondary fattening may lead to the concentrated early slaughter of pressure - barred pigs. Frozen meat purchases only account for 0.2% of monthly consumption, which is a drop in the bucket [44]. 4. Summary - In the short term, pig prices will maintain a weak and volatile pattern. The current policy is a combination of short - term emergency and long - term root - solving. From June to August, the policy combination may prevent a sharp decline in pig prices but is difficult to lead to a significant increase. In the long - term, if the production - limit order is strictly enforced, the supply pressure will ease, and pig prices are expected to bottom out and rebound from the middle and late third quarter to the fourth quarter [48].

Investment Rating - The industry investment rating is "Outperform the Market" and is maintained [2][39]. Core Viewpoints - The agricultural sector has shown a slight rebound, with the agricultural index rising by 0.91%, ranking 20th among 31 primary industries [12][13]. - The pig market is characterized by strong supply and weak demand, leading to a continuous decline in prices. As of June 8, 2025, the average price of pigs was 14.17 CNY/kg, down 0.64% from the previous week [6][16]. - The profitability of self-breeding pigs has decreased, with average profits around 33 CNY per head, while external piglets are facing losses of 121 CNY per head [17][20]. - The white feather chicken market is experiencing stable yet slight adjustments in prices, with chick prices at 2.90 CNY per chick and meat chicken prices at 3.60 CNY per jin [30][31]. Summary by Sections Market Review - The agricultural sector index increased by 0.91%, with the pig farming and animal vaccine sectors experiencing significant adjustments [12][13]. Livestock Industry Chain Tracking Pigs - The pig price is expected to continue its downward trend due to strong supply and weak demand. The supply of pigs is anticipated to increase in the second half of 2025 [6][19]. - The current breeding stock remains stable, with the number of breeding sows fluctuating between 40 million and 41 million, indicating controlled supply growth [19][20]. - Cost competition is expected to be a key focus in 2025, with recommendations to prioritize companies with cost advantages [20]. White Feather Chicken - The chick price has slightly decreased, and the market is currently stable with sufficient supply across the industry [30][31]. - Concerns regarding imported breeds have eased, presenting opportunities for domestic breeding companies [30]. Planting Industry Chain Tracking - Sugar prices have adjusted downwards, while soybean prices have seen a slight increase. Cotton prices have shown minor fluctuations, and corn prices have experienced slight increases [33][36].

Group 1 - The capital market is optimistic about lithium carbonate prices hitting a bottom after falling below 60,000 yuan/ton, with futures prices now higher than spot prices [1][4] - The expectation of supply reduction in the lithium market is anticipated to shift the market from oversupply to a state of balance in the next three months [2][4] - The current high production levels of lithium salts in China indicate that significant supply cuts have not yet been initiated, despite the recent price drop [3][8] Group 2 - The recent price drop to 60,000 yuan/ton has prompted companies with higher safety margins to engage in futures hedging to mitigate price volatility risks [9][11] - Salt Lake Co., a leading lithium producer, has initiated futures hedging with a maximum contract value of 240 million yuan, aiming to stabilize operations [9][11] - Rongjie Co. has increased its futures hedging limit from 200 million yuan to 350 million yuan, reflecting a proactive approach to managing market risks [12] Group 3 - The domestic lithium carbonate production remains high, with May's output reaching 72,000 tons, indicating only marginal improvements in supply pressure [6][8] - The futures market has shown a shift, with the main contract price for July exceeding 60,000 yuan/ton, suggesting market optimism for price recovery in the second half of the year [4][13] - The participation of industry players in futures hedging is expected to enhance the price discovery function of the futures market, potentially leading to a rebound in lithium prices [13]

Summary of Key Points from Conference Call Industry Overview - The conference call primarily discusses the **pig and chicken farming industry** in China, with a focus on the **Shandong market** and the **white feather chicken sector** [1][2][5]. Core Insights and Arguments - **Supply-Side Reform in Pig Farming**: The pig farming sector is expected to undergo supply-side reforms, with significant impacts from weight management and changes in sow productivity on capacity reduction. Companies with a mother pig system and cost advantages in piglets are likely to have long-term advantages [1][2]. - **Valuation Levels**: Current valuations of listed companies in the pig farming sector are at historical lows, presenting opportunities for forward-looking capacity layout [1][2]. - **Focus on Key Companies**: Companies such as **Triangle Agriculture**, **DeKang**, **Shennong**, and **Juxing** in the Southwest region are highlighted for their cost control capabilities. **Wens Foodstuff Group** is also noted as a leading company with excellent cost management [1][4]. - **White Feather Chicken Industry Variables**: The core variable affecting the white feather chicken industry is the import situation from France. A reduction in the import volume of French breeding chickens could lead to a supply contraction starting from the upstream [1][5]. - **Slaughter Volume Trends**: The Linyi region in Shandong is leading in slaughter volume, with a significant increase in the number of pigs raised under a free-range model. The average complete cost for different farming tiers ranges from 12.5 to 14 yuan per kilogram [1][6][8]. Additional Important Insights - **Cost Structures**: The complete cost for first-tier self-breeding farms is approximately 6.2 to 6.5 yuan per kilogram, while second-tier farms face higher costs due to elevated piglet prices [8][9]. - **Market Demand and Supply**: The slaughterhouses anticipate challenges in reaching a slaughter volume of 300,000 heads this year, with terminal market demand not meeting expectations. This has led to a shift from fresh sales to frozen inventory [12][13]. - **Price Predictions**: The pig price is expected to face significant pressure in Q3 2025, potentially dropping to cost levels, with a slight rebound anticipated in Q4 [2][26]. - **Impact of Policies**: Recent government policies aim to control production capacity by not increasing the number of sows and reducing average slaughter weights, indicating a strong official stance on capacity management [25]. Future Outlook - **White Feather Chicken Sector**: The future of the white feather chicken sector appears promising, with increasing willingness for capacity reduction and uncertainties in overseas breeding imports. There is a need to focus on domestic breeding opportunities [24]. - **Market Dynamics**: The overall market for chicken meat remains stable but low due to an oversupply and weak demand, with expectations for price fluctuations based on seasonal demand [22][18]. This summary encapsulates the critical insights and trends discussed in the conference call, providing a comprehensive overview of the current state and future outlook of the pig and chicken farming industries in China.

牧业即将迎来右侧时刻：一边涨价一边加速去产能 20250604 摘要 环保政策和非洲猪瘟曾系统性影响养殖业周期，2016 年起环保政策清 理散户，2018 年非洲猪瘟导致蛋白质价格上涨，奶牛养殖周期长达三 年，影响市场供应持久。 当前行业完全成本约 3.5 元/公斤，合同内原奶价格约 3-3.1 元/公斤， 社会散奶价格更低，行业整体亏损，散奶价格仅能维持泌乳牛现金成本， 后备牛亏损严重，中小散户养不起后备牛，行业运行不健康。 奶价已接近泌乳牛现金成本线，短期内泌乳牛淘汰有限，供应过剩难缓 解，但后备牛亏损导致配种意愿低，预计两年后市场供应将减少，今年 年底或明年初奶价或开始上涨。 奶业周期通常为八年，目前处于新周期临界点，2023 年中行业亏损并 开始去产能，预计 2025 年底将出现供应拐点，提前淘汰和需求旺季可 能加速拐点到来。 行业产能去化已持续两年多，预计未来奶价上涨将持续至少两年，6-8 月淘汰旺季可能加速淘汰速度，当前时间点临近奶价趋势性上涨。 Q&A 当前畜牧业周期的趋势是什么？为什么奶价可能会在产能去化的同时上涨？ 目前畜牧业正处于一个关键时刻，我们预计未来将出现产能去化与奶价上涨并 存的情 ...

Investment Rating - The report rates the food and beverage industry as "Overweight" [1] Core Insights - The dairy price is expected to stabilize in the second half of 2025 after a prolonged adjustment cycle lasting over three years, with over 80% of the industry facing losses [6][60] - The report highlights the cyclical nature of raw milk prices influenced by production capacity, demand, and imports, with significant historical fluctuations noted [6][19] - The report emphasizes the correlation between raw milk prices and the stock prices of upstream dairy companies, suggesting that stock prices may react ahead of milk prices during cyclical changes [6][35] Summary by Sections 1. Raw Milk Price Cycle - The raw milk price is influenced by multiple factors including production capacity, demand, and imports, creating a cyclical pattern [6][19] - The dairy industry is characterized by a long breeding cycle for dairy cows, leading to delayed responses in production capacity adjustments [18][19] - Historical data shows three downward cycles and two upward cycles in raw milk prices since 2008, with significant events impacting demand and prices [19][26] 2. 2025 Outlook - The industry is currently facing severe losses, with a continued trend of dairy cow capacity reduction expected [60][62] - Policy support is anticipated to improve dairy product demand, contributing to a gradual stabilization of milk prices in the latter half of 2025 [60][64] - The report forecasts that as the supply-demand balance improves, raw milk prices may stabilize, benefiting upstream dairy companies [60][62] 3. Correlation Between Milk Prices and Dairy Company Stocks - The report notes a high correlation between raw milk prices and the stock prices of upstream dairy companies, indicating that stock prices may respond more quickly to changes in market conditions [6][35] - The performance of downstream dairy companies is also influenced by their product structure and market expectations, which can affect their stock prices during different price cycles [6][35] 4. Investment Recommendations - The report suggests focusing on leading dairy companies such as Modern Dairy and Yurun Dairy, as well as major dairy enterprises like Yili and New Dairy, which are expected to benefit from the stabilization of milk prices [6][60]

行 业 研 究 农林牧渔行业：4 月猪价震荡，企 业出栏体重上行 4 月上市企业销售数据： 风险提示：畜禽价格波动风险，上市企业出栏量扩张不及预期，动物疫病风险， 企业成本控制不及预期等。 未来 3-6 个月行业大事： 无 2025 年 5 月 22 日 看好/维持 农林牧渔 行业报告 ——生猪养殖行业月度跟踪 行业供需表现：4 月生猪价格震荡，仔猪价格表现偏强。农业农村部监测数据 显示，2025 年 4 月仔猪、活猪和猪肉均价分别为 39.16 元/公斤、15.20 元/公 斤和 26.07 元/公斤，环比变化分别为 5.15%、-1.00%和-1.19%。4 月猪价围 绕 15 元/公斤窄幅震荡，五一期间全国生猪价格以稳为主，局地小幅震荡，截 止 5 月 15 日，全国出栏生猪均价 14.98 元/公斤。 供应端：24 年年中能繁母猪存栏微增，对应 4 月出栏生猪量整体充足，叠加 饲料成本低位，养殖压栏增重意愿增强，生猪体重整体增长。需求端：4 月二 次育肥补栏增加，截留标猪货源；下旬五一备货积极性提升，共同对猪价形成 支撑。4 月生猪屠宰开工率回升 1.42 个百分点至 27.53%，屠宰企业收购顺畅。 ...

行 业 研 究 农林牧渔行业：4 月猪价震荡，企 业出栏体重上行 2025 年 5 月 22 日 看好/维持 农林牧渔 行业报告 ——生猪养殖行业月度跟踪 行业供需表现：4 月生猪价格震荡，仔猪价格表现偏强。农业农村部监测数据 显示，2025 年 4 月仔猪、活猪和猪肉均价分别为 39.16 元/公斤、15.20 元/公 斤和 26.07 元/公斤，环比变化分别为 5.15%、-1.00%和-1.19%。4 月猪价围 绕 15 元/公斤窄幅震荡，五一期间全国生猪价格以稳为主，局地小幅震荡，截 止 5 月 15 日，全国出栏生猪均价 14.98 元/公斤。 供应端：24 年年中能繁母猪存栏微增，对应 4 月出栏生猪量整体充足，叠加 饲料成本低位，养殖压栏增重意愿增强，生猪体重整体增长。需求端：4 月二 次育肥补栏增加，截留标猪货源；下旬五一备货积极性提升，共同对猪价形成 支撑。4 月生猪屠宰开工率回升 1.42 个百分点至 27.53%，屠宰企业收购顺畅。 3 月白毛比价 1.37，4 月毛白价差 4.33 元/公斤，终端消费底部小幅回升。供 给端出栏节奏与二育对短期价格影响更大。 建议持续关注大宗原料走势。5 ...