Investment Rating - The investment rating for the company is "Outperform the Market" [6][3][22] Core Views - The company's breeding costs are steadily decreasing, and its internationalization strategy is progressing smoothly. In Q1-Q3 2025, the company's revenue increased by 15.52% year-on-year to 111.79 billion yuan, while net profit attributable to shareholders rose by 41.01% to 14.779 billion yuan. However, in Q3 2025, revenue decreased by 11.48% year-on-year to 35.327 billion yuan, and net profit dropped by 55.98% to 4.249 billion yuan, primarily due to a significant decline in pig prices [1][9][18]. Summary by Sections Financial Performance - In Q3 2025, the company sold a total of 18.929 million pigs and 3.28 million piglets, with an average selling price of approximately 13.6 yuan/kg, leading to a per-head profit of around 230-240 yuan, which is industry-leading. The total cost of pig farming has been decreasing monthly, reaching about 11.8 yuan/kg in July 2025, with a survival rate of 87% and a weaning-to-market survival rate of 92% [1][9][18]. Cash Flow and Dividends - The company's balance sheet is steadily improving, with a debt-to-asset ratio decreasing by 3.17 percentage points to 55.51% by the end of Q3 2025. The net operating cash flow for Q1-Q3 2025 was 28.58 billion yuan, accounting for 25.57% of revenue. The company has significantly increased its dividend payout ratio, distributing a total of 6.112 billion yuan in dividends, which is 58.04% of net profit attributable to shareholders [2][18][22]. International Strategy - The company is actively pursuing an internationalization strategy, having established a subsidiary in Vietnam in March 2025 and signed a cooperation agreement with BAF Vietnam Agricultural Joint Stock Company in September 2025 to build and operate a high-tech breeding project in Vietnam. This project is expected to yield 64,000 breeding sows and approximately 1.6 million pigs annually once fully operational [2][18][22]. Profitability and Cost Management - The company's profitability has improved, with a gross margin of 18.73% and a net margin of 13.52% in Q1-Q3 2025, benefiting from significant cost reductions. The overall expense ratio has decreased, with management and R&D expenses down by 0.51 percentage points to 3.58% [1][9][18].

Investment Rating - The investment rating for the company is "Outperform the Market" [5] Core Views - The company has shown significant growth in profitability, with a 1169.77% year-on-year increase in net profit to 10.53 billion yuan in H1 2025, alongside a 34.46% increase in revenue to 76.463 billion yuan [1][9] - The company is on track to achieve its cost reduction target of 12 yuan/kg for pig farming, with the cost having decreased to approximately 11.8 yuan/kg by July 2025 [1] - The company is actively pursuing international expansion, having established a subsidiary in Vietnam and applied for an overseas listing in Hong Kong [3] Financial Performance - In H1 2025, the company sold 46.91 million pigs, including 38.394 million commercial pigs, marking a significant year-on-year increase [1][9] - The operating cash flow for H1 2025 increased by 12.1% year-on-year to 17.351 billion yuan, representing 22.69% of total revenue, indicating improved cash flow generation capabilities [2][21] - The company plans to distribute a total cash dividend of 6.112 billion yuan for the mid-year, which accounts for 58.04% of net profit [2] Financial Forecasts - The projected net profits for the company from 2025 to 2027 are 19.509 billion yuan, 16.436 billion yuan, and 16.211 billion yuan, respectively, with corresponding EPS of 3.57 yuan, 3.01 yuan, and 2.97 yuan [3][23] - The company's PE ratios are expected to be 11, 13, and 13 for the years 2025, 2026, and 2027, respectively [3][23] - The company's debt ratio decreased by 5.75 percentage points year-on-year to 56.06% by the end of H1 2025 [2]