Investment Rating - The report assigns an "Accumulate" rating for the livestock industry, specifically the pig farming sector [5]. Core Insights - The report highlights profit growth, reduced debt, and increased dividends in the livestock sector, maintaining a positive outlook for the pig farming industry [3][4]. Summary by Sections Profit and Loss Statement: Revenue and Profit Growth - In Q2 2025, the average pig price was 14.59 CNY/kg, down 10.82% from 16.36 CNY/kg in the same period of 2024. Despite this, sales volume increased, indicating a volume-driven revenue impact [8]. - The total operating revenue for Q2 2025 reached 120.56 billion CNY, reflecting a year-on-year increase of 15.20% and a quarter-on-quarter increase of 9.85%. Improved breeding efficiency and survival rates contributed to a decrease in breeding costs, leading to profit enhancement. The net profit attributable to shareholders for Q2 2025 was 8.715 billion CNY, up 23.4% year-on-year and an increase of 785 million CNY from the previous quarter [9]. Balance Sheet: Debt Reduction and Slow Capital Expenditure - The total fixed assets reported were 232.541 billion CNY, a year-on-year increase of 0.97%, but a slight quarter-on-quarter decrease of 800 million CNY. Capital expenditure was 6.143 billion CNY, up 31.75% year-on-year but down approximately 700 million CNY quarter-on-quarter. The construction in progress decreased by 39.65% year-on-year [10]. - The average debt-to-asset ratio fell to 56.27% in Q2, a decrease of about 2 percentage points from Q1, primarily due to ongoing debt repayments. Short-term borrowings decreased to 74.143 billion CNY, down 11.03% year-on-year, while long-term borrowings fell to 39.529 billion CNY, a year-on-year decline of 28% [15]. Cash Flow Statement: Improvement in Cash Flow - The net cash flow from operating activities for Q2 2025 was 20.194 billion CNY, an increase of 6.616 billion CNY quarter-on-quarter, indicating a gradual improvement in cash flow alongside a reduction in debt ratio [20]. Dividend Growth - The report notes that with improved cash flow, reduced debt ratios, and favorable breeding profits, companies such as Muyuan Foods, Shennong Group, and Jingji Zhino are distributing dividends. The expectation is that as borrowing and debt ratios continue to decline, more companies in the industry will increase their dividends [24]. Recommended Stocks - The report recommends the following stocks in the livestock sector: - Muyuan Foods (Stock Code: 002714.SZ) - Wens Foodstuff Group (Stock Code: 300498.SZ) - Tian Kang Biological (Stock Code: 002100.SZ) - Shennong Group (Stock Code: 605296.SH) - Juxing Agriculture (Stock Code: 603477.SH) [26][27].