Group 1 - The core viewpoint is that the pig farming industry has maintained profitability in the first half of the year due to declining breeding costs and some farmers successfully locking in profits through stable operating models [1][2] - In the first half of the year, the average price of live pigs was 15.50 yuan per kilogram, a year-on-year decrease of 0.8%, primarily due to a significant increase in the number of pigs being sold compared to the previous year [1][2] - The slaughter volume of large-scale pig slaughtering enterprises from January to May was 15,349.67 million heads, with May's slaughter volume at 3,215.67 million heads, reflecting a month-on-month increase of 4.5% and a year-on-year increase of 20.6% [1] Group 2 - The recent rebound in pig prices is driven by multiple favorable factors, including the clearance of large pigs and the conversion of some fresh pork to frozen products, which alleviated supply pressure [2] - The average prices of feed and raw materials for pig farming, such as corn and soybean meal, decreased by 9.2%, 8.8%, and 6.4% year-on-year, respectively, contributing to sustained low breeding costs [2] - The overall pig farming industry has been in a downward price cycle for nearly two years, but some local governments have actively supported farmers, leading to stable profits for certain farmers [2] Group 3 - The outlook for pig prices suggests a potential rebound in the third quarter, although the extent of this rebound may be limited due to continued ample production capacity [3] - The number of newborn piglets has been increasing since the second half of last year, indicating that pig supply will remain abundant into the second half of 2025 [3] - Seasonal recovery in pork consumption is expected as the market stabilizes, with government policies encouraging farmers to control the weight of pigs at the time of sale [3]

Group 1 - The livestock ETF (516760) has risen by 0.46%, marking a five-day consecutive increase, with significant gains in constituent stocks such as Brother Technology (002562) up 10.02%, Xinghuo Technology (600866) up 4.12%, and others [1] - Listed pig companies have begun releasing their 2025 semi-annual performance forecasts, indicating a continued high profit growth in Q2 2025. For instance, Muyuan Foods expects a net profit attributable to shareholders of 10.2-10.7 billion yuan for H1 2025, representing a year-on-year increase of 1129.97% to 1190.26% [1] - In Q2 2025, Muyuan Foods anticipates a net profit of 5.7-6.2 billion yuan, reflecting a year-on-year growth of 77.95% to 93.53%, with a total of 24.252 million pigs sold, an increase of 48.08% [1] Group 2 - The livestock ETF closely tracks the CSI Livestock Breeding Index, which includes companies involved in livestock feed, veterinary drugs, and breeding, reflecting the overall performance of related listed companies [2] - The latest price-to-earnings ratio (PE-TTM) of the CSI Livestock Breeding Index is 13.34 times, which is at a historical low, being in the 11.27% percentile over the past three years, indicating a valuation lower than 88.73% of the time in the last three years [2] - The current valuation of the sector remains low, providing a high margin of safety, suggesting that investors should actively consider the livestock ETF (516760.SH) [2]

Core Viewpoint - The company expects significant profit growth in H1 2025, with net profit projected between 10.5 to 11 billion yuan, representing a year-on-year increase of 925% to 973% [1] Group 1: Performance Forecast - The company anticipates a net profit of 10.2 to 10.7 billion yuan for H1 2025, reflecting a year-on-year increase of 1130% to 1190% [1] - Earnings per share (EPS) is projected to be between 1.9 to 2.0 yuan per share [1] Group 2: Sales and Production - In H1 2025, the company sold 38.394 million pigs, a year-on-year increase of 33%, and 8.291 million piglets, a year-on-year increase of 168% [2] - The company sold 225,000 breeding pigs, which is a year-on-year decrease of 28% [2] - As of the end of H1, the breeding sow inventory was 3.431 million, a decrease of approximately 54,000 from the end of Q1 [2] - The current sales volume is about 49% to 53% of the annual target of 72 to 78 million pigs, indicating a stable overall pace [2] Group 3: Cost and Pricing - The average weight of sold pigs increased until May, but showed a month-on-month decrease in June, with expectations of continued weight reduction [2] - The company's breeding cost per kilogram of pigs decreased to 12.1 yuan/kg in June, down 1 yuan/kg from January, indicating significant cost advantages [2] - The average selling price of pigs in H1 was approximately 14.5 yuan/kg, a year-on-year decrease of 3%, primarily due to a significant price rebound starting from Q2 2024 [2] Group 4: Revenue and Profit Forecast - The company forecasts revenues of 140.35 billion, 143.52 billion, and 152.70 billion yuan for 2025 to 2027, respectively [3] - Expected net profits for the same period are projected to be 23.905 billion, 25.578 billion, and 28.435 billion yuan, respectively [3] - Corresponding price-to-earnings (PE) ratios are estimated at 10.31, 9.63, and 8.66 times [3]

Core Viewpoint - The domestic pig market is experiencing fluctuations, with prices showing a recent rebound after a period of decline, but overall demand remains weak, leading to concerns about future price stability [1][3][5] Group 1: Market Trends - As of June 23, the main contract for live pig futures reached 13,975 yuan/ton, up nearly 5% from the low of 13,350 yuan/ton at the beginning of the month [1] - The overall price of live pigs has been on a downward trend since the third quarter of 2024, currently at relatively low levels [1] - The average price of live pigs nationwide rose to 14.22 yuan/kg by June 20, following a drop to 13.94 yuan/kg on June 9 [1] Group 2: Supply and Demand Dynamics - The demand for live pigs has weakened, leading to an oversupply situation that has caused prices to drop significantly [1][3] - The average trading price for 7 kg piglets in Hunan fell to 460 yuan/head by June 19, a decrease of 85 yuan/head or 15.6% since early May [2] - The increase in feed costs, particularly for corn and soybean meal, has further pressured the profitability of pig farming [3] Group 3: Profitability and Cost Analysis - As of June 19, the average profit for self-breeding pigs was 137.93 yuan/head, down 66.12 yuan/head from early April, while the profit for piglets was 153.42 yuan/head, down 151.05 yuan/head [3] - The average feed cost for self-breeding pigs was 934.88 yuan, and for piglet fattening, it was 889.94 yuan, both showing increases from early April [3] Group 4: Slaughtering Trends - The daily slaughter volume for sample enterprises remained stable, with a range between 165,000 to 186,000 heads, influenced by increased supply and the profitability of fresh meat segmentation [4] - The average gross profit per head for slaughtering was 28.56 yuan, up 222.38% compared to the same period last year [4] Group 5: Future Outlook - The market is expected to face continued downward pressure on prices due to increased slaughtering rates and weak demand, although there are signs of improved market sentiment [5] - The third quarter may see a seasonal decline in pig stocks, potentially supporting higher average prices compared to the second quarter [4]

Group 1 - The average price of pork in China's wholesale market has decreased by 9.3% from January to May, indicating a downward trend in pork prices this year [1] - The prices of live pigs and pork have dropped from 16.57 yuan/kg and 27.75 yuan/kg in January to 14.93 yuan/kg and 25.68 yuan/kg in May, with cumulative declines of 9.9% and 7.5% respectively [1] - The price of piglets has increased by 19% this year, rising from 32.77 yuan/kg in January to 39.01 yuan/kg in May, although there has been a recent slight decline in the growth rate [1][2] Group 2 - The recovery in consumer demand has supported pork prices despite a significant increase in the supply of commodity pigs [2] - From January to April, the number of pigs slaughtered increased by 10.9% year-on-year, with April showing a 20% increase compared to the same month last year [2] - The decline in frozen product inventory has boosted the demand for fresh pork in the catering sector [2] Group 3 - The pig farming industry remains profitable, with average profits per head dropping below 100 yuan as of April 2025, despite a decline in pork prices [3] - Production costs for pig farming are at their lowest since 2019, aided by lower feed prices and improved breeding efficiency [3] - The number of breeding sows has increased slightly, indicating a potential rise in pig supply in the second half of the year [3] Group 4 - Seasonal price increases for pork are expected in the second half of the year, but the year-on-year growth will be significantly lower than in previous years [4] - Farmers are advised to manage their sales strategies carefully to avoid high costs associated with piglet purchases and secondary fattening [4]

Investment Rating - The report maintains a "Buy" rating for the industry, particularly recommending stocks like Muyuan, Wens, and New Hope due to their competitive cost structures and potential for excess returns in the pig farming sector [1]. Core Insights - The report highlights a 2% week-on-week decline in live pig prices, with a significant year-on-year increase of 37.9% in the output of 20 listed pig companies in April [2]. - The report indicates that the breeding stock of sows has increased, suggesting a potential for normal profitability in pig farming in 2025, despite entering a downward price cycle [2]. - The report emphasizes the historical low valuations of leading pig farming companies, suggesting that they are well-positioned for recovery [2]. Summary by Sections 1. Market Overview - The agricultural sector index increased by 0.05% in the week of May 12-16, 2025, underperforming compared to the Shanghai Composite Index [14]. - The agricultural sector ranks 7th among 31 sub-industries in terms of performance since the beginning of 2025, with a year-to-date increase of 3.54% [14]. 2. Industry Data 2.1 Primary Agricultural Products - Corn prices are reported at 2374.90 CNY/ton, showing a week-on-week increase of 0.48% but a year-on-year decrease of 1.63% [35]. - Soybean prices remain stable at 3927.89 CNY/ton, with a year-on-year decline of 10.48% [35]. 2.2 Livestock - The average weight of pigs at slaughter remains stable at 129.71 kg, which is higher than the same period in 2023 and 2024 [2]. - The report notes that the output of listed pig companies reached 69.18 million heads in the first four months of 2025, marking a 30.1% year-on-year increase [2]. 3. Company Performance - The report lists the output of major listed pig companies, with Muyuan leading at 30.77 million heads, followed by Wens and New Hope [2]. - The report suggests that the introduction of new products in the pet food sector is driving rapid growth for domestic companies like Zhongchong and Guobao [5]. 4. Global Agricultural Trends - The global corn stock-to-use ratio for 2025/26 is projected to be the lowest since the 2015/16 season, indicating tightening supply conditions [3]. - The report forecasts a decrease in the global soybean stock-to-use ratio, reflecting similar trends in the corn market [3].

Core Viewpoint - The livestock farming sector is experiencing a positive trend, with an extended profit period expected for pig farming, driven by improved demand and favorable pricing dynamics [1][2]. Group 1: Market Performance - As of May 7, 2025, the China Livestock Breeding Index (930707) increased by 0.20%, with key stocks such as Shengnong Development (002299) rising by 1.89% and Yiduoli (300381) by 1.75% [1]. - The Livestock ETF (516760) rose by 0.16%, with a recent price of 0.63 yuan, and has seen a cumulative increase of 7.19% over the past three months, ranking in the top 25% among comparable funds [1]. - The average price of pork in national wholesale markets reached 20.96 yuan/kg on May 6, 2025, marking a 1.8% increase compared to pre-holiday levels [1]. Group 2: Financial Performance - In 2024, pig farming enterprises are projected to generate revenues of 437 billion yuan, a year-on-year decline of 1.28%, while net profit attributable to shareholders is expected to rise by 337.73% to 32 billion yuan [1]. - In Q1 2025, pig farming enterprises achieved revenues of 107.88 billion yuan, reflecting an 18.69% year-on-year increase, with industry net profit reaching 7.91 billion yuan, up 236.12% year-on-year [1]. Group 3: Supply and Demand Dynamics - As of Q2 2025, domestic demand for pigs is showing marginal improvement, with price support and a gradual transition into a phase of price increases [2]. - External factors, including rising feed raw material prices due to tariffs and increased costs of imported meat, are also contributing to favorable pricing for pigs [2]. Group 4: Valuation Metrics - The Livestock ETF, which tracks the China Livestock Breeding Index, has a current price-to-earnings ratio (PE-TTM) of 12.38, placing it in the 1.74% percentile over the past year, indicating a valuation lower than 98.26% of the time in the last year [2]. - The China Livestock Breeding Index includes companies involved in livestock feed, veterinary drugs, and livestock farming, reflecting the overall performance of related listed companies [2]. Group 5: Top Weighted Stocks - As of April 30, 2025, the top ten weighted stocks in the China Livestock Breeding Index include Haida Group (002311), Muyuan Foods (002714), and Wens Foodstuff Group (300498), collectively accounting for 69.38% of the index [2].

Core Viewpoint - In 2024, Yunnan Shennong Agricultural Industry Group Co., Ltd. (Shennong Group) reported significant financial changes, with a remarkable increase in net cash flow from operating activities and a substantial rise in financial expenses, indicating adjustments in operational status and financial strategy [1] Financial Performance Summary - Revenue increased significantly to 5.584 billion yuan, up 43.51% from 3.891 billion yuan, primarily driven by higher sales volume and prices of live pigs [2] - The net profit turned from a loss of 401 million yuan in 2023 to a profit of 687 million yuan, a 271.16% increase, attributed to higher sales volume and prices of live pigs, along with improved management efficiency [3] - Basic earnings per share rose to 1.31 yuan from a loss of 0.77 yuan, reflecting a 270.13% increase, indicating enhanced profitability [4] Expense Analysis - Sales expenses slightly increased by 6.65% to 69.32 million yuan, driven by higher employee compensation and brand promotion efforts [5] - Management expenses rose by 15.13% to 335 million yuan due to company expansion, necessitating attention to management efficiency [6] - Financial expenses surged by 2843.17% to 25.67 million yuan, primarily due to increased interest expenses, indicating a potential rise in debt burden [7] Cash Flow Analysis - Net cash flow from operating activities skyrocketed by 7769.11% to 1.534 billion yuan, reflecting strong operational cash generation capabilities [10] - Net cash flow from investing activities decreased by 17.42% to -979 million yuan, suggesting a more cautious investment approach [11] - Net cash flow from financing activities dropped significantly by 117.38% to -72.87 million yuan, indicating increased debt repayments [12] R&D and Personnel Insights - R&D expenses decreased by 26.61% to 13.75 million yuan, representing only 0.25% of total revenue, which may impact long-term innovation capabilities [8][13] - The R&D team is relatively young, with 25 out of 35 personnel under 30 years old, indicating potential for innovation but requiring experience development [14]

Investment Rating - The report maintains a strong buy rating for Muyuan Foods and Wens Foodstuffs, highlighting their cost advantages and strong performance capabilities [3][58]. Core Insights - The pig farming industry is experiencing significant overselling, with seasonal price weakness in pig prices, but overall performance is better than market expectations. Factors such as frozen product inventory and secondary fattening still have room for improvement, indicating that the bottom of pig prices remains supported [1][58]. - In March 2025, the total number of pigs sold by 15 listed pig companies reached 17.69 million, a year-on-year increase of 40%, marking a historical high for monthly sales [40][58]. - The report emphasizes that the supply of breeding sows is expected to grow slowly in 2024, leading to limited growth in pig supply in 2025. The cost variance among different farming entities remains significant, allowing high-quality pig companies to achieve considerable profits and continue to repair their balance sheets [58]. Summary by Sections Section 1: Profitability and Production Capacity - Pig prices continue to be weak, while piglet prices remain strong. In March 2025, the average price of live pigs was 14.6 yuan/kg, showing a slight decrease year-on-year and month-on-month. The price of piglets was 610 yuan/head, reflecting a year-on-year increase [11][15]. - The profitability of pig farming continues to narrow, with the average profit for self-bred pigs at 42.4 yuan/head, down 39% month-on-month. The number of breeding sows decreased by 1.0% quarter-on-quarter [15][16]. - Sample companies showed significant overselling in March, with actual sales exceeding planned sales by 6.8%. The frozen product inventory has increased seasonally, indicating a rise in storage willingness among slaughter enterprises [23][58]. Section 2: Sales Growth and Piglet Volume - The total number of pigs sold by listed companies in March 2025 was 17.69 million, with a notable increase in piglet sales, which reached 2.62 million, a year-on-year increase of 196% [40][41]. - The average weight of pigs sold in March was 124 kg, reflecting a slight increase year-on-year and month-on-month, driven by the narrowing price gap [55][58]. Section 3: Investment Recommendations - The report suggests that the pig farming industry is expected to maintain support at the bottom price level, with a focus on companies with clear cost advantages and strong performance capabilities. The recommended companies include Muyuan Foods and Wens Foodstuffs, with additional attention to Shennong Group and Dongrui Co [58].