Summary of COFCO Jiajia Kang Conference Call Company Overview - **Company**: COFCO Jiajia Kang - **Industry**: Swine Industry Key Points Industry Trends - The swine industry is experiencing a trend of capacity reduction, driven by anti-involution policies, with a potential cyclical turning point expected in the second half of 2026, presenting investment opportunities in the swine sector [2][4] Company Performance - In 2025, COFCO Jiajia Kang demonstrated stable operations, with a year-on-year increase in hog output exceeding 50% from January to November, alongside continuous cost improvements and significant growth in branded fresh products [2][5] - As of November 2025, the company had a cumulative output of 5.465 million hogs, with an average selling price of 13.65 yuan/kg for commercial hogs [2][6] Financial Metrics - The fresh product business achieved cumulative sales of 300,000 tons, with branded revenue accounting for 32.44% of total sales [2][6] - The average cost of production was approximately 13 yuan/kg, with significant regional cost disparities narrowing, and some excellent facilities achieving costs below 11 yuan [2][11][12] Breeding and Production Efficiency - The proportion of high-quality breeding pigs remained stable at over 80%, with production efficiency indicators such as PSY (Pigs Weaned per Sow per Year) reaching close to 29 and MSY (Marketable Pigs per Sow per Year) nearing 27 [2][9] - The company plans to expand its cooperative breeding model, which currently accounts for over 20% of output, while cautiously managing expansion to mitigate disease risks [2][10] Cost Management - The company is implementing cost reduction measures, including optimizing feed formulations and improving production management, with expectations to lower costs by 0.5 to 1 yuan in 2026 [2][14] - The current cost structure shows self-breeding costs around 13 yuan, while cooperative breeding costs are approximately 12 yuan [2][14] Product Development and Market Strategy - The company’s flaxseed pork products saw a cumulative year-on-year growth of 140% from January to November 2025, with plans to maintain a growth rate of at least 50% in 2026 [3][15] - COFCO Jiajia Kang is expanding its fresh product channels by collaborating with major supermarkets and e-commerce platforms, aiming to enhance brand recognition and product diversity [2][16] Future Outlook - The company anticipates entering a favorable profit zone in 2026 due to supply-side capacity reductions and long-term price reversals in the swine market [2][5] - The meat product segment is expected to expand capacity significantly, with a projected total capacity of 52,000 tons by mid-2026 [2][17] Feed Production and Sales - The company has a diversified feed production structure, with pig feed, poultry feed, and ruminant feed each accounting for approximately 30% of total sales [2][18] - Future sales targets aim for steady growth, with new production capacities expected to enhance utilization rates [2][20] Financial Health and Dividend Plans - The company plans to gradually reduce its debt levels over the long term and will consider dividends if profitability remains strong, having already distributed over 1.8 billion yuan since its listing [2][22]

Report Title - "Demand Expected to Decline, Near - Term Contracts Under Pressure — Guoxin Futures Weekly Report on Live Pigs" [2] Report Industry Investment Rating - Not provided Core Viewpoints - In the past week, live pig spot prices fluctuated and rebounded due to a phased strengthening of consumption. Futures prices first rose and then fell. Near - term contracts were weak due to the spot price increase falling short of expectations, while the March contract strengthened, and the futures curve turned into a contango structure [7]. - Fundamentally, domestic live pig supply is expected to increase overall by the end of the first quarter of next year based on piglet birth and feed production and sales data. In the short term, large - scale farms had low sales in the first half of the week and higher enthusiasm in the second half, while small and medium - sized farmers had high enthusiasm for sales, but the pressure of selling large pigs has not been fully digested [7]. - In terms of demand, slaughter demand will decline periodically around the Winter Solstice, and will pick up again when pre - Spring Festival stocking demand starts. Spot prices may face short - term adjustment pressure, but the decline space is limited as the pre - Spring Festival peak season is not over [7]. - In the long run, the expectation of industry capacity reduction due to losses in the live pig industry still exists, providing some bottom support for far - term contracts. The LH03 futures contract is at a premium to LH01, and the market expects a shortage of large pigs after the Spring Festival due to pre - festival early sales. However, supply pressure after the festival is still large according to piglet data [7]. - For operation, treat near - term contracts as oscillating weakly, and look for buying opportunities on dips for far - term contracts under the idea of wide - range oscillation [7]. Summary by Directory 1. Weekly Analysis and Outlook - Past week's market: Spot prices rebounded due to consumption, futures first rose then fell, near - term weak, March contract strong, futures curve in contango [7]. - Supply situation: Overall supply to increase by Q1 2026, short - term large - scale farms' sales pattern changed, small and medium - sized farmers have large - pig sales pressure [7]. - Demand situation: Slaughter demand to decline around Winter Solstice, pick up with pre - Spring Festival stocking, short - term spot price adjustment pressure but limited decline [7]. - Long - term outlook: Industry capacity reduction expectation supports far - term contracts, post - festival supply pressure still large [7]. - Operation suggestions: Near - term weakly oscillating, far - term look for buying on dips [7] 65. Central Reserve Frozen Pork Operations - Price over - decline: National level, no temporary reserve purchase for Level 3 warning, consider for Level 2, start for Level 1. Local conditions refer to national practice [67]. - Price over - rise: Two scenarios. In market cyclical fluctuations, start reserve release for Level 2 warning, increase release for Level 1. In special cases like major animal diseases, tolerate higher price increases, release mainly in key periods after Level 1 warning. Provinces can set their own release conditions but not higher than central level [67]

Core Viewpoint - The agricultural, animal husbandry, and fishery sector continues to experience a downturn, with the only agricultural ETF (159275) showing a decline of 0.51% as of the latest report [1][2]. Group 1: Market Performance - The agricultural ETF (159275) opened with a slight increase but then fluctuated downwards, currently priced at 0.976, reflecting a decrease of 0.005 [2]. - Key stocks in the sector, including biological companies and feed processing firms, have seen significant declines, with BioShares dropping over 4% and several others falling by more than 3% [1][2]. Group 2: Industry Trends - The pig farming industry is entering a phase of capacity reduction starting July 2025, with a reported decrease of 50,000 breeding sows from July to August this year [3]. - The industry is facing pressures from market conditions, disease risks, and regulatory policies, leading to an increased motivation for capacity reduction [4]. Group 3: Investment Insights - The current valuation of the agricultural and fishery sector is relatively low, with the agricultural ETF's underlying index showing a price-to-book ratio of 2.53, placing it in the 25th percentile over the past decade, indicating a favorable time for investment [3]. - The agricultural ETF (159275) tracks the CSI Agricultural Index, which includes major companies in the sector, with a concentration of about 40% in pig-related stocks [4].

Core Viewpoint - The agricultural, animal husbandry, and fishery sector continues to show weakness, with the first agricultural ETF (159275) experiencing a decline of 1.5% by market close on October 20, 2023 [1][2] Market Performance - The agricultural ETF (159275) closed at 0.982, down 0.015 from the previous day, reflecting a 1.5% decrease [2] - Key stocks in the sector, including Haida Group, Juxing Agriculture, and Tianma Technology, saw significant declines, with Haida Group dropping over 6% and Juxing Agriculture falling over 4% [1][2] Industry Trends - The 14th World Pig Industry Expo opened on October 18, 2025, showcasing over 800 global enterprises and focusing on smart farming equipment and technology [1] - The Ministry of Agriculture and Rural Affairs, along with five other departments, issued guidelines to strengthen modern agricultural service centers, enhancing support for feed production and animal disease prevention [1] Regulatory Environment - From May to September 2023, multiple meetings were held regarding pig farming, with policies aimed at reducing production by 1 million heads by the end of the year [3] - The pig farming industry is entering a phase of capacity reduction, with a reported decrease of 50,000 breeding sows from July to August 2023 [3] Valuation Insights - The agricultural and fishery sector is currently at a relatively low valuation level, with the agricultural ETF's underlying index price-to-book ratio at 2.59, placing it in the 31.64 percentile over the past decade [3] - This suggests a favorable configuration opportunity for long-term investments in the sector [3] Future Outlook - The pig farming industry is expected to see a rise in price levels due to ongoing capacity reduction and regulatory policies [5] - The focus will be on improving quality and efficiency in the industry, with a gradual elimination of outdated production capacity [4]

Report Industry Investment Ratings - Bean 1: Not clearly defined, but symbol may imply a certain trend [1] - Bean Meal: Not clearly defined, but symbol may imply a certain trend [1] - Bean Oil: Not clearly defined, but symbol may imply a certain trend [1] - Rapeseed Meal: Not clearly defined, but symbol may imply a certain trend [1] - Rapeseed Oil: Not clearly defined, but symbol may imply a certain trend [1] - Corn: Not clearly defined, but symbol may imply a certain trend [1] - Live Pigs: One star, representing a slightly bearish view with limited operability on the market [1] - Eggs: One star, representing a slightly bearish view with limited operability on the market [1] Core Viewpoints - For the overall agricultural products market, various factors such as policy, weather, supply - demand, and tariffs are influencing the prices of different products, and each product has its own short - to - medium - term trends and uncertainties [2][3][4] - The prices of different agricultural products are affected by different factors, and investors need to pay attention to specific factors for each product, such as weather for soybeans, tariffs for soybeans and bean meal, and seasonal demand for oils [2][3][4] Summary by Related Catalogs Bean 1 - This Friday, there will be a competitive auction of domestic soybeans with a supply of 32,000 tons. Northeast soybean is in the pod - setting stage, and the weather is favorable for growth. The price difference between Bean 1 and Bean 2 continues to decline, and Bean 1 is weaker than imported soybeans. The decline of imported soybeans has slowed down and is in a low - level consolidation. Future attention should be paid to domestic soybean weather and policy [2] Soybeans & Bean Meal - The excellent rate of US soybeans is at a high level in the same period of history. The weather in the next two weeks in the US soybean - producing areas is normal, and US soybeans are oscillating weakly. In China, Brazilian soybeans continue to arrive at ports, the oil mill crushing rate is stable, and the bean meal inventory has reached a high level this year. Before the tariff issue is clear, the bean meal market is in a state of oscillation [3] Bean Oil & Palm Oil - Domestic bean oil is strong today, stronger than palm oil. There are uncertainties in the long - term supply of bean oil due to tariffs, and it is in the demand peak season in the fourth quarter. The medium - term US bean oil is likely to be oscillating neutral or slightly strong. The price difference between foreign and domestic bean oil may converge to zero or negative values, mainly through domestic price increases. A long - position strategy on dips is maintained for bean oil and palm oil, and palm oil may face a production reduction cycle in the fourth quarter [4] Rapeseed Meal & Rapeseed Oil - Domestic rapeseed meal is oscillating, with a slight increase in rapeseed meal and a slight decline in rapeseed oil. The Canadian rapeseed futures price continues to decline due to favorable weather. The domestic rapeseed inventory is decreasing, and the import situation has not improved. The rapeseed meal benefits from the seasonal peak of aquatic feed. The short - term trend of rapeseed products is still oscillating, and attention should be paid to China - Canada economic and trade relations and domestic inventory changes [6] Corn - As of August 3, the excellent rate of US corn is 73%, and the price is still falling. In China, the auction of imported corn has been carried out 11 times since July, with a total of about 268,800 tons, and the transaction rate has been decreasing. Another auction of 19,930 tons will be held on August 8. The continuous supply of grain sources has affected market expectations, and the Dalian corn futures are weak. The new - season corn planting area may expand, and there is a high probability of a bumper harvest. The Dalian corn futures may continue to be weak at the bottom [7] Live Pigs - The spot price of live pigs has declined slightly and remains weak. Except for the 09 contract, other far - month contracts have rebounded slightly with increasing positions. The planned slaughter volume of large - scale enterprises in August has increased by 6.6% month - on - month, and the slaughter volume in the fourth quarter is expected to increase. The long - term focus is on when the industry's capacity reduction will be realized [8] Eggs - The spot price of eggs is weak, and most provinces are still experiencing price declines. The 09 contract on the futures market has rebounded with significant position reduction as short - sellers take profits. Future attention should be paid to the peak - season stocking demand before the Mid - Autumn Festival and National Day and the impact of cold - storage eggs on the spot market. The egg price needs to decline further to achieve in - depth capacity reduction. The price in the first half of next year is more supported, and the off - season contracts in the second half of this year are relatively weak, suggesting a reverse spread strategy on the futures market [9]