Investment Rating - The industry investment rating is "Positive" (maintained) [2] Core Viewpoints - The rhythm of pig sales led to July pig prices rising less than expected, but the outlook for future prices remains optimistic. In July 2025, the national average selling price of live pigs was 14.55 yuan/kg, up 1.89% month-on-month but down 23.21% year-on-year. The slaughter volume in July was 4.1583 million heads, down 3.67% month-on-month but up 1.80% year-on-year. The completion rate of pig sales in July was 97.11% of the planned output, with an increase of 6.60% in planned output for August compared to July [6][15][22]. Summary by Sections Industry Overview - The increase in pig prices in July was less than expected due to the accelerated growth rate of pigs in May and June, leading to earlier sales in July. The price peaked at 15.46 yuan/kg on July 3 and fell to 14.09 yuan/kg by the end of July. The supply gap and supportive policies suggest a positive outlook for future prices [6][15][18]. Supply and Structure - As of August 7, 2025, the proportion of large pigs (over 150kg) in the sales structure decreased, while the proportion of breeding stock increased. The breeding stock increased by 0.52% month-on-month, and the average profit per head for self-breeding and self-raising in July was 101.66 yuan, a month-on-month increase of 304.30% [7][16][22]. Corporate Performance - In July 2025, 12 listed pig companies reported a total of 15.2799 million heads sold, a year-on-year increase of 24.82%. The average selling prices for major companies increased month-on-month, with prices for companies like Muyuan, Wens, and New Hope rising by 1.6% to 3.4% [8][28][33].

Group 1 - The livestock ETF (159865) has seen a net inflow of 34 million units, indicating strong capital interest in livestock assets [1] - The "pig cycle" is fundamentally an output capacity cycle rather than just a price cycle, with the time lag from sow replenishment to fattened pig output being significant [1] - Since 2019, the financial situation at the bottom of the current cycle is the most pressured since 2006, with a focus on reducing losses and debt rather than rapidly increasing production capacity [1] Group 2 - The livestock farming industry is expected to enter a profit cycle starting from Q2 2024, but the average speed of debt reduction indicates a long road ahead for the industry [1] - Market expectations regarding the impact of rising pig production capacity on the profit cycle may be overly pessimistic, potentially overlooking the positive effects of declining raw material costs and a potential macro demand rebound in 2025 [1] - The sustainability of the current profit period in the pig farming industry may exceed market pessimism [1]

Core Insights - The report highlights the recovery cycle in the feed industry and marginal improvements in livestock farming, suggesting potential investment opportunities in related sectors [5][6] - The agricultural sector, particularly the livestock segment, is experiencing fluctuations in prices, with a noted decrease in pig prices and an increase in chicken prices, indicating a complex market dynamic [6][8] - The AI pharmaceutical sector is witnessing significant commercial validation, as evidenced by a major contract signed by Jingtai Holdings, reflecting the growing demand for AI technologies in drug development [11][14] Market Trends - The domestic market indices showed positive movements, with the Shanghai Composite Index closing at 3,665.92, up by 0.50% [4] - The agricultural sector's performance is highlighted by a 2.52% increase in the agriculture, forestry, animal husbandry, and fishery sector, ranking it 10th among sub-industries [6] - The robotics industry is also gaining traction, with over 1,500 robot products showcased at the World Robot Conference, indicating a growing interest in automation technologies [8] Industry Analysis - The feed industry is expected to see a recovery due to declining upstream raw material prices and improving conditions in the livestock sector, particularly for companies like Haida Group [6][8] - The pig farming industry is entering a profit cycle, but the overall debt reduction trend suggests a cautious approach to capacity expansion [6][8] - The AI pharmaceutical industry is on the brink of an explosive growth phase, with increasing collaborations between AI firms and traditional pharmaceutical companies [11][14] Company Insights - Wanchen Group is positioned as a leading player in the snack food market, with a significant revenue increase of 247.9% in 2024, driven by its aggressive store expansion strategy [19][20] - The company has established a robust supply chain and operational capabilities, which are critical for maintaining its market leadership in the competitive snack food sector [20] - The report forecasts continued revenue growth for Wanchen Group, with projected revenues of 551.32 billion, 670.39 billion, and 792.89 billion from 2025 to 2027 [20]

国家统计局数据显示，6月末全国存栏生猪4.24亿头，增长2.2%。其中能繁母猪存栏4043万头，为正常 保有量的103.7%，接近产能调控合理区域上限。同时，5月龄以上的中大猪存栏量和上半年全国新生仔 猪量均处于历史高位，这意味着下半年和明年春节后生猪出栏将明显增多。 农业农村部生猪产业监测预警专家朱增勇称："如果不及时采取产能调控，将有可能导致猪价在消费旺 季不旺，明年上半年尤其是春节后生猪养殖可能会出现亏损。" 当前，我国生猪产业正处于第6轮"猪周期"，随着生产效率持续提升和猪肉消费增长趋缓，生产大起大 落、价格大涨大跌风险依然存在。8月第1周猪价已降至每公斤14.53元，同比下降28.1%。为此，农业农 村部会商研判，将实施有效的生猪产能综合调控。按目前的生产和消费趋势，全国需要再调减约100万 头产能，能繁母猪总量保持在3950万头左右。 朱增勇称："引导生猪龙头企业发挥产能调控带头作用，合理淘汰能繁母猪，减少低质低效产能，适当 调减能繁母猪存栏。减少二次育肥，控制肥猪出栏体重，严控新增产能，避免盲目扩张'拼规模'，降低 后期生猪供过于求的市场风险，保障生猪价格和养殖收益的稳定。" 大型企业去产能 避 ...

Investment Rating - The report maintains an investment rating of "Buy-A" for Haida Group and "Buy-B" for Shengnong Development, Wen's Shares, and others [7]. Core Insights - The report suggests focusing on the recovery cycle of feed and the marginal improvement in breeding [1]. - The pig price has decreased week-on-week, with average prices in key provinces showing a decline [3]. - The feed industry is expected to see a bottoming out and recovery due to the decline in upstream raw material prices and improvements in the downstream breeding sector [3]. - The report highlights the potential growth of Haida Group's overseas feed business as a new performance growth point [3]. Industry Performance - For the week of August 4 to August 10, the CSI 300 index rose by 1.23%, while the agriculture sector increased by 2.52%, ranking 10th among sectors [2][24]. - The top-performing sub-industries included broiler chicken breeding, fruit and vegetable processing, and pig breeding [2][24]. Pig Breeding Sector - As of August 8, the average price of external three-way cross pigs in Sichuan, Guangdong, and Henan was 13.30, 15.39, and 13.83 yuan/kg, respectively, reflecting a week-on-week decline of 2.92%, 4.05%, and 3.82% [3][33]. - The average pork price was 20.41 yuan/kg, down 0.92% from the previous week [3][33]. - The self-breeding profit was 45.13 yuan/head, while the profit from purchasing piglets was -134.14 yuan/head [3][33]. Poultry Sector - As of August 8, the weekly price of white feather broiler chickens was 7.14 yuan/kg, up 4.54% week-on-week [3][47]. - The price of broiler chicks was 3.13 yuan/chick, reflecting a week-on-week increase of 21.79% [3][47]. - The profit from chicken breeding was 0.62 yuan/chick, while egg prices fell by 6.94% to 6.70 yuan/kg [3][47]. Feed Processing Sector - In June 2025, the total industrial feed production in China was 27.67 million tons, a month-on-month decrease of 0.1% but a year-on-year increase of 6.6% [54]. - The production of compound feed, concentrated feed, and additive premix feed saw year-on-year growth of 6.6%, 3.4%, and 8.7%, respectively [54]. Recommendations - The report recommends stocks such as Wen's Shares, Shengnong Group, Juxing Agriculture, Tangrenshen, and New Hope in the pig breeding sector due to expected profitability recovery starting from Q2 2024 [4]. - It also highlights the potential of domestic pet food brands like Guibao Pet and Zhongchong Shares, which are expected to perform well in the upcoming years [5].

从牧原股份年中披露的信息来看，截至2023年6月末，公司在河南、山东、安徽、东北等生猪养殖产能 较为集中的地区成立25家屠宰子公司，已投产10家屠宰厂，投产产能合计为2900万头/年。报告期内， 公司继续拓展屠宰业务销售渠道，不断提升运营能力，更好地服务下游客户。 牧原股份披露的2023年业绩预告显示，报告期内预计归属于上市公司股东的净利润为亏损39亿元至47亿 元，而去年同期为盈利132.66亿元，同比转亏。这也是牧原股份上市以来首次交出亏损"成绩单"。2023 年，牧原股份累计销售生猪6381.6万头，较上年同比增长超4%，销售收入同比下滑超9%，为1082.17亿 元。 从"猪场"到"工厂"，牧原集团正谋划为旗下上市公司牧原股份打通生猪养殖产业链上下游环节。在行业 深陷"猪周期"困扰、备受经营压力考验之际，这家头部猪企招数频出、颇受关注。 牧原股份母公司牧原集团副总裁秦牧原日前透露，在食品加工上，牧原集团与锅圈食汇深度合作，在南 阳建立锅圈牧原猪肉食品园区。锅圈食汇背后是同为"河南老乡"的港股上司公司锅圈。公开资料显示， 锅圈是一家专注于即食、即热、即煮和预制食材生产销售的企业，且与牧原方面"相识已久" ...

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the **agriculture industry**, focusing on **animal protein sectors** such as **pig farming**, **dairy farming**, and **beef cattle farming** [1][2][34]. Core Insights and Arguments Pig Farming - The **pig farming cycle** is driven by production capacity, with the number of breeding sows being a critical leading indicator. This needs to be cross-verified with data on sow feed sales [1][2]. - The **African swine fever** has normalized, raising the industry's cost base, which affects the peak and elasticity of the cycle [1][4]. - **Scale farming** may extend the pig cycle and amplify price fluctuations. Secondary fattening increases price disturbances, influenced by short-term price expectations [1][5]. - The **反内卷 (anti-involution) policy** aims to reduce the number of breeding sows and lower slaughter weights to support pig prices [1][11]. - The average price of pigs is expected to rise to over **16 RMB per kilogram** by **2026**, with **牧原股份 (Muyuan Food)** potentially achieving a profit of nearly **500 RMB per head** [1][14]. Dairy Farming - The dairy industry faces challenges due to falling milk prices, currently around **3 RMB per kilogram**, down from **4.5 RMB**. However, there is potential for demand improvement due to increased willingness to have children and government subsidies for newborns [1][17]. - The beef cattle sector has a long growth cycle and is heavily reliant on imports, with significant industry clearing observed [1][18][20]. Market Dynamics - The **white chicken farming** sector is significantly impacted by overseas breeding policies, with potential for market share growth for **圣农 (Sannong)** during periods of import disruption [3][25]. - The **seafood feed** segment is expected to improve due to rising prices of common aquatic products, with **海大集团 (Haida Group)** showing strong performance in this area [3][27]. Other Important Insights - The **agricultural new consumption trends** include rapid growth in pet food and pet healthcare sectors, indicating new growth potential beyond traditional areas [6][34]. - The **agricultural input products** like feed and veterinary products serve as lagging indicators in the animal protein supply chain, aiding in capacity data assessment [7][34]. - The **grain security** theme is increasingly important, with policies and market dynamics needing close attention [8][30]. Investment Recommendations - Focus on core assets like **牧原 (Muyuan)** and **温氏 (Wens Food)**, which have strong cost control and are less affected by the anti-involution policy [12][13]. - The **港股 (Hong Kong stock market)** upstream livestock companies are currently in a challenging phase but are expected to improve by **2026** as the new cycle begins [22]. - **海大集团 (Haida Group)** is recommended for its strong market position and growth potential in both domestic and international markets [27]. Future Trends - The pig farming sector is expected to benefit from the anti-involution policy, leading to a new upward price cycle in **2026** [15][34]. - The **meat cattle industry** is facing significant challenges, including price declines and industry losses, with a low degree of scale [20][21]. This summary encapsulates the key points discussed in the conference call, providing insights into the current state and future outlook of the agriculture industry, particularly in the animal protein sectors.

Group 1 - The price of live pigs in China has dropped to a new low of 13.77 yuan per kilogram, marking a decrease of approximately 8.3% month-on-month and 33.6% year-on-year, prompting the government to implement measures to reduce production capacity by about 1 million breeding sows [2] - The housing market in Hegang has seen a significant increase in prices over the past five years, with new homes averaging 3,860 yuan per square meter, up from 3,046 yuan, and a total of 5,680 homes purchased by non-local buyers last year [3] - 百果园's chairman stated that the company will not lower fruit prices to cater to consumer ignorance, emphasizing the importance of educating consumers about quality differences in fruits [4][5] Group 2 - A major corruption case involving the quantitative trading firm Fantasia Quant has emerged, with allegations of embezzlement amounting to 118 million yuan over six years, leading to the investigation of several individuals [15][16][17] - Huawei is set to announce a breakthrough technology in AI inference that could reduce reliance on high-bandwidth memory (HBM) and enhance the performance of domestic AI models [18] - BMW and Brilliance BMW have initiated a recall of over 230,000 vehicles due to safety hazards related to starter generator connections and high-pressure system malfunctions [28]

Core Viewpoint - The current pig market is experiencing pressure on output, which will impact prices. The industry is undergoing capacity regulation, and maintaining pig prices is expected to be a long-term task. Medium to long-term pig prices will mainly be influenced by changes in production capacity, with potential for price increases if capacity reduction is significant. Continuous observation of policy sustainability and implementation effects is necessary [1][4]. Industry Overview - The Ministry of Agriculture and Rural Affairs has indicated that China's pig production capacity is currently high, prompting a comprehensive adjustment to reduce about 1 million breeding sows to prevent extreme fluctuations in production and prices [1][2]. - As of June, the national pig inventory was 424 million heads, with breeding sows at 40.43 million, slightly above the reasonable capacity limit. This suggests an increase in pig output in the second half of the year and after the Spring Festival next year [3][4]. - The current pig cycle is characterized by shorter cycles, increased short-term volatility, and strong production capacity, with a supply-demand imbalance leading to weak demand and strong supply [4]. Price Trends - As of August 10, domestic pig prices reached a new low of 13.77 yuan/kg, down approximately 13.9% from the beginning of the year and below the industry's breakeven point. The price drop is attributed to weak demand during the traditional summer consumption lull [3][5]. - The price of pigs has decreased from about 21.3 yuan/kg in the third quarter of last year to 13.77 yuan/kg, marking a cumulative decline of 35.3% [5]. Company Impact - The decline in pig prices has adversely affected the profitability of listed pig companies. For instance, Muyuan Foods reported a net profit of 3.208 billion yuan in Q2 2024, but saw a decline in performance in subsequent quarters due to falling prices [5][6]. - In July, major pig companies like Muyuan, Wens Foodstuffs, and New Hope reported significant declines in sales volume and revenue, with Muyuan's sales volume dropping to a new low since March [6][7]. - The sales revenue for these companies in July decreased significantly, with Muyuan's revenue down 10.41% year-on-year, and Wens and New Hope also experiencing declines [6][7]. Future Outlook - The policy of capacity regulation aims to stabilize the industry and reduce price volatility, potentially leading to a more concentrated market with larger, more efficient producers benefiting from improved profit margins [2][7]. - The industry is expected to transition from high volatility to a more stable and high-quality development phase, with a focus on cost control and cash flow capabilities among leading companies [2][7].

Core Insights - The core viewpoint of the articles is that the Chinese pig industry is undergoing a significant adjustment in production capacity, particularly focusing on reducing the number of breeding sows to stabilize pig prices and mitigate the cyclical volatility of the market [1][2][3]. Industry Overview - The Ministry of Agriculture and Rural Affairs has announced a plan to reduce the breeding sow population by approximately 1 million heads to prevent extreme fluctuations in production and prices [1]. - As of June, the national pig inventory was 424 million heads, with breeding sows at 40.43 million heads, which is 103.7% of the normal holding capacity, indicating a need for capacity adjustment [2]. - The current pig cycle is the sixth, characterized by shorter cycles, increased short-term volatility, and a supply-demand imbalance where supply is strong but demand is weak [3]. Price Trends - The price of live pigs has reached a new low for the year at 13.77 yuan/kg as of August 10, reflecting a cumulative decline of approximately 13.9% since the beginning of the year [2][5]. - The price drop has significantly impacted the profitability of listed pig companies, with many reporting double-digit declines in sales revenue in July compared to the previous year [1][5]. Company Performance - Major listed companies like Muyuan Foods and Wen's Foodstuffs have reported declines in sales volume and revenue due to the seasonal drop in demand and low prices [6][7]. - For instance, Muyuan Foods sold 6.355 million pigs in July, a decrease of 9.5% month-on-month, with a sales revenue of 11.639 billion yuan, down 10.41% year-on-year [6]. - Smaller companies also faced challenges, with some reporting their lowest sales volumes of the year in July [6]. Future Outlook - The ongoing production capacity adjustments are expected to have a long-term impact on pig prices, with potential for price recovery if capacity reduction is significant [3]. - The industry is likely to transition towards a more stable and high-quality development phase, with larger companies benefiting from improved cost control and cash flow capabilities [1][7].