Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Views - The decline in chick prices has negatively impacted profitability, while the sales of breeding pigs are entering a release phase [2] - In the first half of 2025, the company achieved revenue of 1.32 billion yuan, a year-on-year decrease of 4.0%, and a net profit attributable to the parent company of 6.155 million yuan, down 96.6% year-on-year [4][5] - The company has seen a 15.7% year-on-year increase in the sales volume of white feather broiler chicks, but the price drop has affected profitability [4][5] Financial Performance Summary - In 1H2025, the company's revenue from broiler chicken business was 1.006 billion yuan, a decrease of 16.5% year-on-year, with a gross profit of 98 million yuan, down 72.8% [5] - The sales volume of breeding pigs reached 38,000 heads in 1H2025, a year-on-year increase of 355%, with revenue from the pig business at 204 million yuan, up 128.7% [5] - The company expects to achieve main business revenues of 3.384 billion yuan, 4.010 billion yuan, and 5.005 billion yuan for 2025, 2026, and 2027 respectively, with corresponding net profits of 141 million yuan, 450 million yuan, and 469 million yuan [7][10] Sales and Production Insights - The company introduced 230,000 sets of Hubbard breeding chickens in 2024, a year-on-year increase of approximately 44%, laying a solid foundation for growth in parent and commercial chick sales in 2025 [5] - The sales price for white feather parent chicks in 1H2025 was approximately 30 yuan per set, while the price for commercial chicks ranged from 2.3 to 2.4 yuan per chick [5] - The company anticipates steady growth in the sales volume of its 909 small white feather broiler chicks in 2025 [5] Future Projections - The company projects parent chick sales of 12 million sets, 12 million sets, and 13 million sets for 2025, 2026, and 2027 respectively, with commercial chick sales of 665 million, 632 million, and 664 million [7] - The expected compound annual growth rate for breeding pig sales from 2024 to 2027 is 145.5%, with a projected sales volume of 100,000 heads, 150,000 heads, and 200,000 heads for the respective years [7]

Group 1 - Brazil has officially notified the World Organisation for Animal Health (OMSA) that it has regained its status as a "non-infected country" for highly pathogenic avian influenza after 28 days without new cases [1] - The Brazilian Ministry of Agriculture and Livestock initiated a rapid response and disinfection process after the first case was confirmed on May 16, leading to a successful end of the "empty period" [1] - The Brazilian Animal Protein Association (ABPA) announced that the Ministry has begun notifying countries that had previously suspended imports due to the outbreak, aiming to restore poultry product exports [1] Group 2 - Brazil is one of the world's largest chicken exporters, with poultry products playing a significant role in its agricultural exports [2] - The projected chicken export value for Brazil in 2024 is $9.54 billion, with major markets including China, Saudi Arabia, the UAE, the EU, and Japan [2]

Core Insights - Brazil's Ministry of Agriculture reported a case of highly pathogenic avian influenza in a self-sufficient poultry farm in Campinapolis, Mato Grosso state, with immediate containment measures implemented [1] - The outbreak is not expected to affect Brazil's poultry product international trade, as there are no commercial poultry farms within a 10-kilometer radius of the outbreak [1] - Brazil is the world's largest poultry exporter, and while avian influenza has impacted exports, the overall chicken export volume has shown growth in 2023 [2] Group 1 - The recent outbreak of avian influenza is contained, with no new cases reported, and the Ministry of Agriculture emphasizes that consumption and export of poultry products remain safe [1] - The poultry sector is under close monitoring, with measures in place to ensure public health and stabilize both domestic supply and exports [2] Group 2 - In May 2025, Brazil's chicken export volume is projected to be 393,400 tons, a decrease of 12.9% compared to the same period in 2024, with export value dropping by 9.5% to $741.1 million [2] - Despite the challenges, from January to May 2023, Brazil exported 2.256 million tons of chicken, reflecting a year-on-year increase of 4.8%, with export revenue reaching $4.234 billion, up 10.18% [2]

Core Insights - Brazil's Ministry of Agriculture confirmed the first outbreak of highly pathogenic avian influenza (HPAI) in a commercial farm, marking a significant event for the country's poultry industry [1] Group 1: Outbreak Details - The outbreak was reported on May 16, 2023, in a commercial breeding farm located in Monte Negro, Rio Grande do Sul [1] - The virus identified is the H5N1 strain of highly pathogenic avian influenza [1] Group 2: Industry Implications - This incident raises concerns for Brazil's poultry sector, which is a major player in the global market for poultry products [1] - The discovery of HPAI in a commercial setting could lead to increased biosecurity measures and potential impacts on poultry production and exports [1]