Core Viewpoint - The report from Huazhong Securities indicates that Wens Foodstuff Group has experienced a decline in net profit for the first nine months of the year, with a year-on-year decrease of 18.3% to 5.26 billion yuan, while the third quarter net profit is projected at 1.78 billion yuan [1] Group 1: Financial Performance - For the first nine months, the company achieved a net profit attributable to shareholders of 5.26 billion yuan, reflecting a year-on-year decrease of 18.3% [1] - The net profit for Q3 is estimated to be 1.78 billion yuan [1] Group 2: Business Strategy - The company will adhere to a prudent development strategy, aiming to reduce its debt ratio to around 45% [1] - The annual output of market pigs is expected to be completed smoothly [1] Group 3: Industry Context - The pig farming industry has entered a phase of overall losses due to a significant drop in pig prices, with the industry facing strict regulatory policies [1] - The government has held several meetings regarding pig farming, with policies aimed at reducing production by 1 million pigs by the end of the year for leading pig enterprises [1] - The report suggests that the capacity reduction in the pig farming industry is likely to accelerate due to comprehensive losses and stringent regulatory enforcement [1] Group 4: Market Position - Wens Foodstuff Group is the second-largest pig farming enterprise in the country and the largest yellow-feathered chicken farming enterprise [1] - The company's costs remain among the lowest in the industry, maintaining a "buy" rating [1]

Financial Performance - In Q3 2025, the company reported a net profit attributable to shareholders of 1.78 billion yuan, with a total revenue of 75.788 billion yuan for the first nine months, reflecting a slight decrease of 0.03% year-on-year [1] - The company's net profit for the first three quarters was 5.26 billion yuan, down 18.3% year-on-year, with quarterly revenues showing fluctuations: Q1 at 24.32 billion yuan (+11.3%), Q2 at 25.53 billion yuan (+2.6%), and Q3 at 25.94 billion yuan (-9.8%) [1] - As of September 2025, the company's debt-to-asset ratio decreased to 49.4%, down 1.2 percentage points from June, with a target to reduce it to around 45% [1] Livestock Production - The company achieved a pig output of 27.668 million heads from January to September 2025, a year-on-year increase of 28.3%, with a target of 33-35 million heads for the year [2] - Quarterly pig output was reported as 8.594 million heads in Q1, 9.338 million in Q2, and 9.736 million in Q3, with respective year-on-year growth rates of 19.7%, 29.8%, and 35.4% [2] - The estimated profit from the pig farming business for Q3 2025 is approximately 1.5 billion yuan, contributing to a total profit of about 6.6 billion yuan for the first nine months [2] Poultry Production - The company reported a total output of 948 million yellow feathered chickens from January to September 2025, an increase of 8.9% year-on-year, with a quarterly output of 282 million in Q1, 316 million in Q2, and 350 million in Q3 [3] - The estimated profit from the chicken business for Q3 2025 is around 500 million yuan, despite a total loss of approximately 700 million yuan for the first nine months [3] - The company aims for a year-on-year growth of over 5% in chicken output for 2025 [3] Market Outlook - The company anticipates a significant reduction in pig production due to regulatory policies, with a projected output of 35 million heads in 2025, remaining stable in 2026, and a slight increase in 2027 [4] - The expected profit for the company is forecasted to be 6.735 billion yuan in 2025, with a notable increase to 10.85 billion yuan in 2026 and 13.945 billion yuan in 2027 [4] - The company maintains its position as the second-largest pig farming enterprise and the largest yellow feathered chicken producer in the country, with competitive cost management [4]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company reported a net profit attributable to shareholders of 5.26 billion yuan for the first nine months of 2025, a year-on-year decrease of 18.3% [5] - The company aims to maintain a stable development strategy, with a target to reduce the debt ratio to around 45% [5] - The company has a leading cost advantage in livestock and poultry, with Q3 profits from the meat chicken business estimated at 500 million yuan [6][8] Financial Performance Summary - For the first nine months of 2025, the company achieved revenue of 75.788 billion yuan, a slight decrease of 0.03% year-on-year [5] - The company's asset-liability ratio decreased to 49.4% by the end of September 2025, down 1.2 percentage points from June [5] - The company’s pig output for the first nine months was 27.668 million heads, a year-on-year increase of 28.3% [7] - The company’s profit from pig farming for the first half of 2025 was approximately 5.1 billion yuan [6] Business Segment Performance - The company’s meat chicken output for the first nine months was 948 million birds, a year-on-year increase of 8.9% [8] - The average selling price of fattening pigs in Q3 was 13.18 yuan/kg, with comprehensive breeding costs dropping to 12.2-12.4 yuan/kg [6] - The company’s profit from the chicken business in Q3 is estimated at 500 million yuan, despite a total loss of 700 million yuan for the first nine months [9] Future Outlook - The company expects to achieve its annual target for pig output of 33-35 million heads, having completed 71.4%-75.7% of this target by September [7] - Forecasts for 2025-2027 indicate a gradual increase in both pig and chicken output, with net profits projected to recover significantly in 2026 and 2027 [10][11]