Core Viewpoint - The corn seed industry is facing supply-demand imbalance and intense competition, leading to significant revenue declines for multiple companies, including Donghai Seed Industry, which reported its first-ever half-year net profit loss since its listing [1][2]. Company Summary - Donghai Seed Industry's revenue for the first half of 2025 was 369 million yuan, a year-on-year decrease of 9.41%, with a net profit attributable to shareholders of 35.11 million yuan, down 33.42% [1][2]. - The company's net profit after excluding non-recurring gains and losses was -432.61 thousand yuan, marking a shift from profit to loss for the first time since its listing [2]. - The decline in performance is attributed to lower corn prices, insufficient market confidence, and a supply surplus, alongside challenges from diseases and market preferences for dense planting varieties [2][3]. - Donghai Seed Industry primarily engages in hybrid corn seed business, with corn seed revenue accounting for approximately 90% of total revenue, focusing on varieties like "Donghai" and "Xianyu" [2]. Industry Summary - The corn seed industry is experiencing a widespread downturn, with many listed seed companies reporting revenue declines in their corn seed businesses during the first half of the year [3]. - The industry is undergoing a phase of "de-stocking, structural adjustment, and value creation," indicating a challenging environment for seed companies [3]. - Despite a stabilization in corn spot prices, seed prices are expected to recover slowly, with traditional varieties facing dual pressures from de-stocking and price competition [3]. - The industry is transitioning from traditional seeds to genetically modified and dense planting varieties, with companies that have a first-mover advantage likely to increase their market share [3]. - Donghai Seed Industry has already made advancements in genetically modified varieties, with six nationally approved corn GM varieties, including Donghai 605D, and is seeing gradual sales increases [3].

Investment Rating - The investment rating for Longping High-Tech (隆平高科) is "Buy" (maintained) [1] Core Views - The company's performance is under pressure due to the sluggish corn industry in Brazil, while domestic seed performance remains stable. The revenue for 2024 is reported at 8.566 billion yuan, a year-on-year decrease of 7.13%, and the net profit attributable to shareholders is 114 million yuan, down 43.08% year-on-year. The first quarter of 2025 shows a revenue of 1.409 billion yuan, a decline of 32.03% year-on-year, primarily due to weak sales of corn seeds in Brazil. The profit forecast for 2025-2027 has been adjusted downwards, with expected net profits of 348 million, 404 million, and 502 million yuan respectively for those years. The current stock price corresponds to a PE ratio of 38.9, 33.6, and 27.0 for 2025-2027, indicating potential for gradual performance recovery as the Brazilian corn market improves and domestic transgenic seed business expands [1][4][5]. Financial Performance - In 2024, the revenue breakdown shows corn seed revenue at 5.021 billion yuan (down 16.74%), rice seed revenue at 2.008 billion yuan (up 12.97%), and vegetable seeds at 321 million yuan (up 0.69%). The company maintains a leading market share in hybrid rice, with seven of the top ten varieties in the national promotion area, and three of the top ten corn varieties [5][6]. - The company has received 113 authorized plant variety rights in 2024, with significant contributions from rice and corn varieties. The total number of authorized plant variety rights has reached 979, showcasing the company's strong R&D capabilities [6]. Financial Summary and Valuation Metrics - The financial summary indicates a revenue forecast of 9.476 billion yuan for 2025, with a year-on-year growth of 10.6%. The net profit attributable to shareholders is expected to be 348 million yuan, reflecting a significant recovery from the previous year's losses. The gross margin is projected to stabilize around 37.2% in 2025, with a net margin of 3.7% [8][10]. - The company's valuation metrics show a PE ratio decreasing from 119.0 in 2024 to 38.9 in 2025, indicating a more attractive valuation as earnings are expected to recover [8][10].

Investment Rating - The industry investment rating is "Overweight" [5] Core Insights - The average price of commodity pigs has weakened, with a week-on-week decline of 0.07%, currently at 14.45 CNY/kg. The average price of piglets remained stable after three weeks of decline [8][18] - The planned slaughter volume for March is expected to increase by 2.74% month-on-month, indicating increased market supply pressure [3][27] - The U.S. has imposed tariffs on certain agricultural products, which may affect domestic prices and increase costs for downstream industries [4][32] Summary by Sections Commodity Pig Prices - The average price of commodity pigs has decreased by 0.07% week-on-week, while the average price of piglets has remained stable [8][18] - The average weight of commodity pigs at slaughter has increased, with an average of 123.61 kg, up 0.08% week-on-week [26] Supply and Demand Dynamics - The number of breeding sows has decreased slightly, with a total of 40.62 million sows reported in January, down by 160,000 from the previous month [3][27] - The planned slaughter volume for March is 11.4759 million heads, reflecting a month-on-month increase of 2.74% [3][27] Profitability and Cost Analysis - The average profit for self-bred pigs is 33.56 CNY/head, down by 9.52 CNY from the previous week, while the average loss for purchased piglets is 12.52 CNY/head, a decrease of 21.91 CNY [28] - The price ratio of culling sows to commodity pigs is 0.71, indicating a slight decline from the previous week [18][26] Investment Recommendations - Focus on leading companies with scale and cost advantages in pig farming, such as Muyuan Foods, Wens Foodstuff Group, and New Hope Liuhe [11][33] - In the poultry sector, consider companies with proprietary white feather chicken breeding sources [11][33]