Investment Rating - The investment rating for the company is "Buy" [5] Core Views - The company reported significant growth in revenue and net profit for the first half of 2025, with revenue of 3.717 billion yuan and net profit of 181 million yuan, representing year-on-year increases of 66.49% and 504.12% respectively [1][5] - The second quarter of 2025 saw a decline in net profit due to low pig prices, with revenue of 2.072 billion yuan and net profit of 52 million yuan, reflecting year-on-year growth of 61.34% but a decline of 44.66% in net profit [1][5] - The company achieved a substantial increase in pig output, with 1.907 million pigs sold in the first half of 2025, a year-on-year increase of 75.02%, and 1.077 million pigs in the second quarter, up 85.12% [2][3] Summary by Sections Revenue and Profitability - The company's pig farming business generated revenue of 3.432 billion yuan in the first half of 2025, up 68.32% year-on-year, with a gross margin of 14.38%, an increase of 2.00 percentage points [2] - The average selling price of pigs in the first half of 2025 was 14.49 yuan per kilogram, with a decline to 14.12 yuan in the second quarter due to market conditions [2] Cost Management - The company effectively reduced breeding costs, contributing to the improvement in gross margin [2] - The feed business also saw revenue growth of 15.96% year-on-year, reaching 179 million yuan, although the gross margin decreased by 2.27 percentage points [2] Financial Forecasts - The company has adjusted its profit forecasts for 2025 to 569 million yuan, with expected growth rates of 9.8%, 52.3%, and 28.8% for the years 2025 to 2027 [3] - The projected price-to-earnings (P/E) ratios for 2025, 2026, and 2027 are 18.9, 12.4, and 9.7 respectively [3][4]

Core Viewpoint - The report from Western Securities indicates a significant year-on-year increase in the hog output of listed pig companies in July 2025, but a seasonal demand weakness and policy adjustments have led to a month-on-month decline. Despite the growth in output, the drop in hog prices has negatively impacted revenue, resulting in an overall industry revenue decline of 6.64% month-on-month [1][2]. Group 1: Output and Performance - The hog output of listed pig companies in July 2025 reached 15.5382 million heads, representing a year-on-year increase of 31.36% but a month-on-month decrease of 4.59% [1]. - Among leading companies, Muyuan Foods, Wens Foodstuff Group, and New Hope Liuhe reported hog outputs of 6.355 million, 3.1648 million, and 1.3025 million heads respectively, with year-on-year changes of +13.02%, +36.22%, and +3.21%, while month-on-month changes were -9.46%, +5.24%, and -2.07% [1]. - The cumulative output from January to July 2025 for listed pig companies was 110 million heads, reflecting a year-on-year increase of 20.97% [1]. Group 2: Revenue Analysis - The operating revenue of listed pig companies in July 2025 was 24.647 billion yuan, down 9.85% year-on-year and 6.64% month-on-month [2]. - Leading companies reported July sales revenues of 11.639 billion, 4.877 billion, and 1.802 billion yuan for Muyuan Foods, Wens Foodstuff Group, and New Hope Liuhe respectively, with year-on-year changes of -10.41%, -8.72%, and -24.63% [2]. - The cumulative revenue from January to July 2025 for listed pig companies was 180.473 billion yuan, showing a year-on-year increase of 16.77% [2]. Group 3: Price Trends - The average selling price of hogs for listed companies in July increased by 1.90% month-on-month but decreased by 22.35% year-on-year [3]. - The average selling prices for Muyuan Foods, Wens Foodstuff Group, and New Hope Liuhe were 14.30, 14.58, and 14.44 yuan per kilogram respectively, with month-on-month increases of 1.56%, 1.32%, and 1.83% [3]. Group 4: Weight Metrics - The average weight of hogs sold in July was 105.7 kg per head, showing a month-on-month decrease of 1.34% but a year-on-year increase of 0.53% [4]. - The average weights for Muyuan Foods, Wens Foodstuff Group, and New Hope Liuhe were 128.07, 105.69, and 95.81 kg per head respectively, with month-on-month changes of -1.11%, -7.03%, and -3.43% [4].

Core Viewpoint - The report from Western Securities indicates a significant year-on-year increase in the hog output of listed pig companies in July 2025, but a seasonal demand weakness and policy adjustments have led to a month-on-month decline. Despite the growth in output, the drop in hog prices has negatively impacted revenue, resulting in an overall industry revenue decline of 6.64% month-on-month [1][2]. Group 1: Output and Sales - The hog output of listed pig companies in July 2025 reached 15.5382 million heads, representing a year-on-year increase of 31.36% but a month-on-month decrease of 4.59% [1]. - Major companies such as Muyuan Foods, Wens Foodstuff Group, and New Hope Liuhe reported July hog outputs of 6.355 million, 3.1648 million, and 1.3025 million heads, with year-on-year changes of +13.02%, +36.22%, and +3.21% respectively, while month-on-month changes were -9.46%, +5.24%, and -2.07% [1]. - The cumulative output from January to July 2025 for listed pig companies was 110 million heads, reflecting a year-on-year increase of 20.97% [1]. Group 2: Revenue Performance - The operating revenue for listed pig companies in July 2025 was 24.647 billion yuan, down 9.85% year-on-year and 6.64% month-on-month [2]. - Major companies reported July sales revenues of 11.639 billion, 4.877 billion, and 1.802 billion yuan for Muyuan Foods, Wens Foodstuff Group, and New Hope Liuhe, with year-on-year changes of -10.41%, -8.72%, and -24.63% respectively [2]. - The cumulative revenue from January to July 2025 for listed pig companies was 180.473 billion yuan, showing a year-on-year increase of 16.77% [2]. Group 3: Price Trends - The average selling price of hogs for listed companies in July increased by 1.90% month-on-month but decreased by 22.35% year-on-year [3]. - The average selling prices for Muyuan Foods, Wens Foodstuff Group, and New Hope Liuhe were 14.30, 14.58, and 14.44 yuan per kilogram, with month-on-month increases of 1.56%, 1.32%, and 1.83% respectively [3]. Group 4: Weight Metrics - The average weight of hogs sold in July was 105.7 kg per head, showing a month-on-month decrease of 1.34% but a year-on-year increase of 0.53% [4]. - Major companies reported average weights of 128.07 kg, 105.69 kg, and 95.81 kg per head, with month-on-month changes of -1.11%, -7.03%, and -3.43% respectively [4].

Report Summary 1. Investment Rating No investment rating for the industry is provided in the report. 2. Core View The report suggests that the pig price will experience a period of shock adjustment. The supply of pigs is expected to increase gradually by December, making it difficult for the price to rise significantly. However, the stable rebound of the price difference between 150Kg pigs and standard pigs will support the price to some extent. If the farming sector continues to reduce the weight of pigs or keep the weight stable, the pig price may adjust weakly in a volatile manner. For the 09 contract, which has a large premium over the spot, a light - short position can be considered, but risk prevention needs to be emphasized due to the significant influence of macro - sentiment on commodities [4]. 3. Summary by Section Market Dynamics - On July 30, the number of registered pig futures warehouse receipts was 0. - The short - term spot price has limited room for further decline, and attention should be paid to whether the farming sector will continue to reduce the weight of pigs. - The main contract (LH2509) reduced its position by 1,758 lots today, with a position of about 53,000 lots. The highest price was 14,240 yuan/ton, the lowest was 14,005 yuan/ton, and it closed at 14,075 yuan/ton [2]. Fundamental Analysis - From the perspective of the number of fertile sows, the supply of pigs is expected to increase monthly from March to December, but the increase is limited. According to the piglet data, the overall slaughter volume of pigs will increase in the third and fourth quarters of 2025. The consumption in the second half of the year is better than that in the first half. - Historically, the price difference between fat and standard pigs may strengthen in a volatile manner. - Market bearish logic: slow and difficult weight - reduction in the farming sector, continuous increase in future slaughter volume, and limited support from demand for pig prices as the third quarter is not the peak consumption season. - Market bullish logic: there is still room for an increase in frozen - pork inventory, strong resilience of the spot price indicating less loose supply - demand than expected, and limited increase in future slaughter volume with the approaching of the peak consumption season in the third and fourth quarters [3]. Strategy Suggestions - View: shock adjustment. - Core logic: based on sow and piglet data, the slaughter volume of pigs may increase monthly until December, making it difficult for the pig price to rise significantly under sufficient supply; the stable rebound of the price difference between 150Kg pigs and standard pigs will weaken the willingness of individual farmers to reduce weight, providing some support for the pig price; if the farming sector continues to reduce the weight of pigs or keep the weight stable, the pig price may adjust weakly in a volatile manner. For the 09 contract with a large premium over the spot, a light - short position can be considered, but risk prevention is necessary [4]. Market Overview - National average pig slaughter price on July 30 was 13.93 yuan/kg, down 0.01 yuan from the previous day, a decrease of 0.07%. - In Henan, the pig slaughter price was 13.98 yuan/kg, up 0.04 yuan from the previous day, an increase of 0.29%. - In Sichuan, the pig slaughter price remained unchanged at 13.24 yuan/kg. - Among futures contracts, the price of the 07 contract increased by 0.52%, while the prices of the 01, 03, 05, 09, and 11 contracts decreased, with the 09 contract falling by 0.53%. - The main contract basis in Henan increased by 115 yuan to - 95 yuan/ton, an increase of 54.76% [6]. Key Data Tracking The report presents historical data charts of futures contract closing prices, basis, and price differences between contracts in recent 180 days, as well as data on national average pig slaughter prices, sample enterprise slaughter volume, white - strip pork average price, and national average corn purchase price in grain depots [14].