Core Viewpoint - New Hope Liuhe Co., Ltd. anticipates a net profit loss of 1.5 billion to 1.8 billion yuan for the year 2025, primarily due to fluctuations in pig prices and operational challenges in its pig farming business [1] Group 1: Company Performance - The company expects a net profit loss of 1.5 billion to 1.8 billion yuan for 2025, with a non-recurring net profit loss estimated between 1.18 billion to 1.48 billion yuan [1] - New Hope's pig farming business has faced pressure due to a decline in pig prices, which fell more than the reduction in production costs, leading to decreased profitability [1][2] - In 2025, New Hope sold 17.5454 million pigs, generating sales revenue of 23.205 billion yuan, but the average selling price of pigs has been on a downward trend, reaching a low of 11.28 yuan per kilogram in December 2025 [2] Group 2: Industry Context - The pig farming industry has experienced collective profit declines due to price fluctuations, with 12 listed companies in the A-share pig farming sector forecasting reduced net profits for 2025 [2] - The average profit for self-bred and self-raised pigs in 2025 dropped significantly, with a decline of 78.42% year-on-year, averaging 74.96 yuan per pig [3] - Analysts predict that pig prices may gradually recover in 2026, with expectations of a V-shaped price trend, influenced by supply adjustments and seasonal demand [3]

Core Insights - The recent increase in pork prices in Shandong Province is attributed to a decline in the number of pigs being sold and a rise in demand due to the New Year holiday [1] - The average price of fat pigs in the first week of the new year was 12.57 yuan per kilogram, a year-on-year decrease of 21.97% but a month-on-month increase of 6.44% [1] - The average price of pork was 22.38 yuan per kilogram, showing a year-on-year decrease of 20.30% but a month-on-month recovery of 3.85% [1] Supply and Demand Dynamics - The narrowing of industry losses is linked to the rising prices of fat pigs and increased enthusiasm among farmers to replenish their herds, leading to a rise in demand for piglets [1] - The average price of piglets is currently 21.65 yuan per kilogram, down 31.23% year-on-year but up 1.17% month-on-month [1] - The main factors influencing the recent recovery in pork prices include the decline in pig sales and increased demand during the New Year holiday [1] Market Outlook - The market is expected to maintain a stable yet slightly declining trend in pork prices, with overall fluctuations remaining narrow [1] - Supply-side pressures include excess production capacity and concentrated sales of pigs, which may limit the upward momentum of pork prices [2] - The demand for pork is expected to weaken post-New Year, with a reduction in orders from slaughterhouses and a slower sales pace for fresh pork [2]

Core Viewpoint - The supply of live pigs remains relatively loose in October, influenced by policy guidance from the National Development and Reform Commission, leading to a slight decrease in the average weight of pigs being sold, which increases short-term supply pressure and causes a notable decline in pork prices during the month [1][2]. Supply and Demand Dynamics - The supply side of live pigs is still relatively loose, and due to capacity regulation, group pig enterprises are reducing the weight of their sales, which adds short-term supply pressure and contributes to a significant decline in pork prices [2]. - The overall pork consumption is entering a seasonal peak but is weaker than market expectations, dragging down pork prices throughout the month [1][2]. Industry Performance - The industry is experiencing expanded losses, with the average loss per self-bred and purchased pig reaching 155 yuan and 281 yuan respectively [2]. - The number of breeding sows in the country has entered a phase of reduction, with a significant acceleration in the decline of breeding sow capacity observed in October, with a month-on-month decrease of 1.1% [2][3]. Company Recommendations - The company recommends focusing on pig enterprises with significant cost advantages and strong performance delivery capabilities, specifically highlighting Muyuan Foods (002714.SZ) and Wens Foodstuff Group (300498.SZ) [1][2]. - Other companies to watch include Shennong Group, Dekang Agriculture, Dongrui Co., and COFCO Joycome [2]. Production and Sales Data - In October 2025, 15 listed pig enterprises collectively sold 17.52 million pigs, representing a year-on-year increase of 30% and a month-on-month increase of 23%, primarily due to the release of capacity from leading pig enterprises [3]. - The average weight of pigs sold by major listed companies continued to decline, with an average weight of 121 kg, down 1.9% year-on-year and 1.5% month-on-month [3].

Core Viewpoint - The report indicates that the current pig cycle is nearing its bottom, with potential for a price increase in the future, driven by supply adjustments in response to declining breeding profits [10][19]. Group 1: Commodity Market Overview - The overall commodity market showed a weak trend, with the South China Industrial Products Index declining by 0.72% week-on-week [1]. - The top five gainers in industrial products included pulp, paraxylene, urea, aluminum, and zinc, while the biggest losers were asphalt, iron ore, methanol, butadiene rubber, and propylene [1]. Group 2: Pulp Market Analysis - Pulp futures prices increased by 3.10%, showing a bullish trend technically, with low import costs and improved corporate profits [2]. - Domestic pulp inventory at major ports has seen a slight decrease, but remains at a relatively high level, indicating a loose supply [2]. - Demand from downstream paper production has generally increased, with white cardboard starting to stock up for the Spring Festival orders, leading to a recovery in trading [2]. Group 3: Asphalt Market Analysis - Asphalt futures prices fell by 6.59%, influenced by a drop in international oil prices and weak demand [6]. - With decreasing temperatures, road projects in northern regions have largely halted, while southern projects may enter a rush phase, putting pressure on future demand [6]. - Despite a contraction in supply with low operating rates, weak demand has led to significant declines in both futures and spot prices [6]. Group 4: Agricultural Products Overview - The South China Agricultural Products Index rebounded by 0.57% week-on-week, with the top five gainers being soybean meal, chicken eggs, corn, and corn starch, while the biggest losers included red dates, fiberboard, rapeseed, apples, and palm oil [8]. Group 5: Pig Cycle Analysis - The pig cycle is primarily driven by supply-side factors, with stable pork demand in China. When pork prices rise, farmers increase breeding, leading to a subsequent supply surplus and price decline [10]. - Historical trends show that the time from price peak to trough is typically around one year, while the recovery phase can take between one to four years [10]. - Current pig prices are in a bottoming phase, with expectations of a price peak around August 2024, suggesting that prices may be close to their bottom now [10]. Group 6: Breeding and Supply Dynamics - The growth rate of breeding sows is expected to peak in April 2025, after which it will gradually decline, impacting pig supply [12]. - The relationship between pig output and pork prices is inversely correlated, with a lag of about six months [12]. - As of late September 2025, breeding profits have turned negative, leading to a slow reduction in breeding sows, but an acceleration in this reduction is anticipated due to ongoing losses [14][19].

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Viewpoints - The industry is experiencing increasing supply pressure of live pigs as the year-end approaches, with low prices continuing to decline. In October 2025, the national average selling price of live pigs was 11.69 yuan/kg, down 10.74% month-on-month and 33.56% year-on-year. The slaughter volume in October was 5.0352 million heads, up 10.40% month-on-month and 9.55% year-on-year. The actual output in October exceeded the planned output by 5.70%, but the planned output for November is expected to decrease by 3.27% compared to October [3][14][24] Summary by Sections Industry Overview - The supply pressure of live pigs is gradually accumulating as the year-end approaches, with low prices continuing to decline. The average selling price in October 2025 was 11.69 yuan/kg, reflecting a significant decrease [3][14] - The slaughter volume in October was 5.0352 million heads, indicating a month-on-month increase of 10.40% and a year-on-year increase of 9.55% [3][14] Market Dynamics - The proportion of large pigs (over 150kg) in the slaughter structure was 4.89%, which is lower than the same period in 2024. The stock of large pigs is expected to increase, leading to a more relaxed supply in the future [4][18] - The winter pork consumption is expected to improve, which may drive the price difference between lean and fatty pork. However, the high inventory rate of frozen products may suppress future prices [4][19][23] Financial Performance - In October, the industry faced deepening losses, with self-breeding losses reaching 167.97 yuan per head. The breeding stock decreased by 0.77% month-on-month [5][24] - The average selling price of major listed pig companies decreased month-on-month, with prices ranging from 10.97 to 11.87 yuan/kg, reflecting declines of 9.9% to 13.9% [6][7][34]

Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 33.39 [1][5]. Core Insights - The company's main business saw an increase in volume but a decrease in price, leading to stable profitability. The overall revenue for the first three quarters of 2025 was RMB 446.5 billion, with a year-on-year growth of 1.2%, while the net profit attributable to the parent company was RMB 39.6 billion, up 4.1% year-on-year [1][5]. - In Q3 2025, the total revenue was RMB 161.5 billion, a decrease of 1.8% year-on-year, but the net profit increased by 8.4% to RMB 16.4 billion [1][5]. - The company benefits from favorable pork costs, with the meat products segment accounting for 42% of total revenue and 96% of operating profit in Q3 [1][2]. Revenue Analysis - The meat products segment generated RMB 67.9 billion in Q3, down 0.6% year-on-year, but the sales volume increased by 0.9% due to rapid growth in emerging channels [2]. - The slaughtering business saw a significant revenue drop of 18.8% year-on-year, totaling RMB 67.5 billion, despite a 40.5% increase in slaughter volume [2]. - Other businesses, particularly pig farming, experienced a revenue increase of 100.5% year-on-year, driven by a 146% rise in pig output [3]. Profitability Outlook - The meat products segment achieved a record high profit per ton of RMB 5,186, up 6.5% year-on-year, with an operating profit margin of 29.9% [4]. - The slaughtering business faced a 46.9% decline in operating profit, with a profit margin of only 0.6% [4]. - The company aims to maintain stable profit margins while increasing sales volume, expecting a slight decline in profit per ton in Q4 2025 [4]. Earnings Forecast and Valuation - The earnings per share (EPS) forecast for 2025-2027 is adjusted to RMB 1.51, 1.59, and 1.64, respectively, reflecting slight increases for 2025 and 2026, but a decrease for 2027 [5]. - The target price of RMB 33.39 corresponds to a price-to-earnings (PE) ratio of 21x for 2026, based on comparable companies [5].

Market Overview - As of August 29, the average wholesale price of pork in China was 19.94 yuan/kg, an increase of 0.6% from the previous day, indicating a potential support for the livestock sector [1] - The average price of eggs was 7.64 yuan/kg, down 0.4%, suggesting a reduction in cost pressure for poultry farming enterprises [1] ETF and Stock Performance - As of August 29, the Livestock ETF (159867.SZ) rose by 0.91%, while the related index, the CSI Livestock (930707.CSI), increased by 0.31% [1] - Key constituent stocks showed positive performance: Haida Group rose by 2.47%, Wens Foodstuff Group by 1.56%, Muyuan Foods by 0.84%, Meihua Biological by 0.82%, and Lihua Agricultural by 2.17% [1] Industry Insights - According to Caifeng Securities, an increase in the supply of pigs has led to a decline in pork prices, while the domestic pet market continues to grow significantly [1] - The white feather chicken industry chain is facing uncertainties due to avian influenza outbreaks in Europe and the U.S., which may positively impact prices in the medium to long term [1] - The average price of white feather broilers in major production areas increased by 1.81% to 7.33 yuan/kg as of August 22 [1] - Data from GF Securities indicated that agricultural product processing and animal health sectors rose by 7.0% and 1.6% respectively this week [1]

Core Viewpoint - The recent decline in pig prices is attributed to a combination of increased supply and reduced demand, with the industry still maintaining profitability due to lower breeding costs [1][4]. Price Trends - Pig prices have been on a downward trend for six consecutive weeks, with prices dropping from 16.57 CNY/kg in early January to 14.35 CNY/kg by early August, marking a year-on-year decline of 31.4% [1]. - Pork prices also decreased from 27.75 CNY/kg in January to 24.93 CNY/kg in August, reflecting a year-on-year drop of 22% [2]. - The price of piglets rose from 32.77 CNY/kg to 39.57 CNY/kg between January and April, but has since fallen to 33.25 CNY/kg by August, down 25.4% year-on-year [2]. Supply and Demand Dynamics - The slaughter volume of pigs increased by 14.5% year-on-year, reaching 18.355 million heads from January to June [3]. - Pork imports from January to July totaled 62.6 thousand tons, a 4.1% increase year-on-year, although July saw a slight decline [3]. - Despite some recovery in restaurant consumption due to seasonal factors, overall demand for pork remains weak, limiting price support [3]. Profitability and Future Outlook - Breeding profitability has been maintained for 15 consecutive months, with average profits per head around 110 CNY from January to July, although this has decreased to below 100 CNY in July [4]. - The supply of pigs is expected to continue growing into the third quarter, while demand is anticipated to pick up starting in September, particularly with the upcoming seasonal consumption peaks [4]. - The government plans to initiate a new round of frozen pork storage by the end of August, which may boost market confidence [4].

Core Insights - The average trading price of lean meat pigs in China reached its lowest point of 13.67 yuan/kg on August 18, 2025, marking a significant decline in the market [1] - The pig market experienced a phase of weight reduction and increased supply in the first half of the month, leading to a price drop [1] - Northern farming groups have completed their weight reduction actions, resulting in a recovery of pig output to normal levels, which has led to an increase in prices in the northern market [1] - The southern market has paused price reductions and is now seeing price increases for pig sales [1] - It is anticipated that pig prices may see a slight increase in the coming days, but there remains a possibility of minor price declines as output may increase again towards the end of the month [1]

Industry Investment Rating - The investment rating for the agricultural, forestry, animal husbandry, and fishery industry is "Outperform the Market" [1] Core Viewpoints - The agricultural sector has shown weak performance despite a general market uptrend, with the agricultural, forestry, animal husbandry, and fishery index declining by 0.14%, ranking 21st among 31 primary industries [11][12] - The report highlights a significant decline in pig prices due to weak demand and increased supply, with expectations of seasonal price fluctuations in the second half of 2025 [5][15] - The white feather chicken sector is experiencing price stabilization but remains deeply unprofitable, with a notable decrease in the number of breeding stock updated in the first half of 2025 [26][30] Summary by Sections 1. Market Overview - The agricultural, forestry, animal husbandry, and fishery index decreased by 0.14%, while the Shanghai and Shenzhen 300 indices increased by 1.09% and 0.69%, respectively [11] - The animal protection sector rebounded, but major sectors like pigs and chickens faced adjustments [12] 2. Livestock Industry Tracking 2.1 Pigs: Weak Demand and Slowing Production Growth - As of July 20, the average price of live pigs was 14.26 yuan/kg, down 0.26 yuan/kg from the previous week, influenced by low consumer demand and high temperatures [5][15] - The average weight of pigs at market was 128.83 kg, a decrease of 0.2 kg from the previous week, indicating a slowdown in weight gain [15] - The report anticipates a seasonal price increase during the peak consumption months of July and August, but significant pressure on prices is expected in the fourth quarter due to increased supply [15][18] 2.2 White Feather Chicken: Price Stabilization and Deep Losses - As of July 18, the price of white feather chicken chicks was 1.50 yuan/chick, showing a slight rebound, while the average price of meat chickens remained at 3.20 yuan/jin [26] - The first half of 2025 saw a 29.62% year-on-year decline in the number of breeding stock updated, raising concerns about future supply [26] - The industry is currently well-supplied, but uncertainties regarding imports due to avian influenza outbreaks pose risks and opportunities [26] 3. Crop Industry Tracking - Sugar prices slightly decreased to 6080 yuan/ton, while soybean prices increased by 1.1% to 3935 yuan/ton [30] - Cotton prices saw a minor increase to 15366 yuan/ton, and corn prices slightly dropped to 2375 yuan/ton [30]