Unsatisfactory interim result – impacted by low prices FirstFarms delivered an interim result for the first 9 months of -6 mDKK. Yields in the field have generally been reasonable in 2025, but the prices are below the expected level. Foot and mouth disease (FMD) has had a significant impact on the result in Q2 and Q3 as a result of the lack of turnover from the milk production. The Board of Directors and Management of FirstFarms A/S have today reviewed and adopted the unaudited interim financial accounts f ...

Based in particular on the recent decrease in pig prices and assuming that these prices remain at the current level throughout the year, FirstFarms adjusts downwards the previous announced expectations for 2025 by 25 mDKK, and narrowing the range by 10 mDKK, to an EBITDA in the level of 60 - 90 mDKK and an EBIT of minus 10 - 20 mDKK. Announced expectations 2025 EBITDA EBIT 20 November 2025 60 - 90 mDKK -10 - 20 mDKK11 July 2025 85 - 125 mDKK 15 - 55 mDKK31 March 2025 70 - 110 mDKK 0 - 40 mDKK13 March 2025 1 ...

Core Viewpoint - The article emphasizes the importance of scientifically compliant utilization of livestock manure to prevent environmental pollution, particularly in regions facing soil capacity overload issues [1][2] Group 1: Current Issues - Some livestock farms are facing problems with excessive manure application, leading to overflow and water pollution, especially during the northern autumn and winter seasons [1] - The article highlights that exceeding ecological capacity transforms resources into pollutants, necessitating strict adherence to soil carrying capacity [1] Group 2: Proposed Solutions - Strengthening joint guidance is essential to address cognitive challenges, including the development of technical standards and training for producers on safe manure application [1][2] - Establishing a comprehensive electronic ledger system for tracking manure generation, treatment, transportation, and application is crucial for effective management [2] - Utilizing advanced monitoring technologies such as satellite remote sensing and drones can enhance regulatory efficiency by quickly identifying anomalies in large application areas [2] Group 3: Enforcement and Accountability - Joint enforcement is necessary to deter pollution-causing violations, with clear responsibility definitions and immediate investigations upon issue detection [2] - Linking penalties to environmental credit ratings and project subsidies can increase the cost of violations and promote compliance [2] Group 4: Long-term Vision - The article advocates for a systematic approach to promote the resource utilization of livestock manure as a pathway to develop ecological circular agriculture, emphasizing the need for a full-chain governance structure [2]

Core Insights - The province has achieved a comprehensive utilization rate of livestock manure of 83.9%, addressing pollution risks from livestock farming [1][2] - The province ranks high nationally in livestock production, with significant numbers in pig, cattle, sheep, and poultry outputs [1] - There are approximately 12,000 large-scale livestock farms and over 1,160 third-party manure service organizations in the province [1] Group 1 - The province is implementing a resource utilization project for livestock manure across 36 counties, establishing 191 collection points and processing centers [2] - By the end of 2024, the equipment matching rate for manure facilities in livestock farms is expected to reach 99.3% [2] - The resource utilization of livestock manure provides a stable source of organic fertilizer for agricultural production and positively impacts ecological environment [2] Group 2 - The average concentration of total nitrogen in nine major rivers entering the Liaodong Bay has decreased by 6.4% year-on-year [2] - Advanced practices in manure resource utilization have emerged, such as the "five-level hundred stations" model in Changtu and the "four-in-one" model in Chaoyang [2] - Future efforts will focus on improving manure storage facilities for smaller farms and enhancing management of facility construction and record-keeping [2]

Emission Targets - New Zealand has revised its 2050 methane reduction target for livestock and farm sources to a 14-24% decrease from 2017 levels [1] - The revised target is less ambitious than the previous goal of a 24-47% reduction [1]

Core Viewpoint - Leshan Giant Star Animal Husbandry Co., Ltd. reported significant growth in its pig farming sales for September 2025, indicating a strong performance in the livestock sector [1] Sales Performance - In September, the company sold 351,800 pigs, representing a year-on-year increase of 42.75% [1] - The sales of commercial pigs accounted for 348,800 units, generating a revenue of 577 million yuan [1] - Cumulatively, from January to September, the company sold 2,934,200 pigs, with total sales revenue reaching 5.153 billion yuan [1] Data Disclosure - The disclosed figures only include pig sales and are unaudited, which may differ from periodic reports [1] Industry Risks - The pig farming industry faces systemic risks such as market price fluctuations and animal diseases, which could impact company performance [1]

Core Insights - Beef prices have reached record highs due to a combination of drought conditions leading to the lowest cattle inventory in 70 years and strong consumer demand [1][4] Price Increases - The Bureau of Labor Statistics reported significant year-over-year increases in beef prices for August, with ground beef up 12.8%, beef roasts up 13.6%, and steak prices rising 16.6%, all exceeding the overall food inflation rate of 3.2% [2] Cattle Inventory Decline - Cattle inventories have been declining due to droughts affecting key ranching areas, resulting in the lowest cow inventory since 1951 [3][4] Rising Overhead Costs - Cattle ranchers are facing increased overhead costs, including higher expenses for feed, labor, fuel, and equipment [5] Import Constraints - Import restrictions due to cattle illnesses, such as the New World screwworm, have impacted live cattle shipments from Mexico, contributing to higher beef prices [6] Tariff Impact - Tariffs on imported beef, particularly a 76% tariff on Brazilian beef, have further exacerbated price increases for consumers [6][8]

Government Policy & Environmental Impact - Denmark aims to be the first country globally to tax emissions from cows and pigs [1]

Group 1 - Qi Commercial Bank's Weifang branch successfully issued a 2 million yuan small export loan to a green food company in Shandong, addressing the company's urgent cash flow needs [1] - The green food company specializes in the processing and sale of fruits and vegetables and faced cash flow pressure due to a recent export order requiring significant upfront investment [1] - Since the launch of the small and micro enterprise financing coordination mechanism in November last year, Qi Commercial Bank has taken significant actions to alleviate financing difficulties for small and micro enterprises [1] Group 2 - The financing coordination mechanism has expanded the coverage of loan policies, effectively reducing the refinancing pressure and financing costs for small and micro enterprises [1] - A livestock company in Gaomi City, which raises lake sheep, faced challenges in procuring feed and raw materials due to an expiring loan [1] - The Weifang branch of Qi Commercial Bank is focusing on building the small and micro enterprise financing coordination mechanism to provide high-quality, convenient, and efficient financial services [2]

Summary of Wens Foodstuff Group Earnings Call Company Overview - **Company**: Wens Foodstuff Group (300498.SZ) - **Industry**: Agriculture, specifically hog and poultry farming in China Key Financial Highlights - **1H25A Performance**: - Net profit of Rmb3.47 billion, EPS of Rmb0.522 per share, compared to Rmb1.34 billion in 1H24A - Recurring net profit of Rmb3.67 billion, up from Rmb1.28 billion a year ago, but below expectations due to depressed poultry margins [1][2] - No interim dividend declared, same as last year [1] Earnings Estimates Revisions - **2025E**: Recurring earnings estimates revised down by 32% - **2026E**: Revised up by 8% - **2027E**: Revised up by 6% [2] Market Outlook - **Hog Market**: - Expected improvement in supply/demand fundamentals in 2026E due to better industry supply discipline - Anticipated hog price of Rmb16.5/kg in 2026E, up from Rmb14.7/kg in 1H25A [2][18] - **Poultry Market**: - Yellow-feather broiler margin is currently depressed, but improvements expected in 2026E as supply responds to producer feedback [2][33] Cost Management and Profitability - Wens is focusing on cost-cutting measures, including breeding development and optimizing feed formulation, which is expected to support unit profit in hog operations in 2026E [2][33] - Total unit cost for hogs reduced to Rmb12.5/kg in 1H25A, down Rmb1.9/kg year-on-year [20] Revenue Breakdown - **Total Revenue**: Rmb49.88 billion in 1H25A, a 6% increase from Rmb47.09 billion in 1H24A [28] - **Hog Revenue**: Rmb32.74 billion, up 16% year-on-year - **Chicken Revenue**: Rmb15.13 billion, down 9% year-on-year [30] Gross Profit Analysis - **Total Gross Profit**: Rmb6.89 billion, a 32% increase year-on-year - **Hog Gross Profit**: Rmb6.57 billion, up 125% year-on-year - **Chicken Gross Profit**: Rmb74 million, down 96% year-on-year [30] Valuation and Price Target - **Current Price**: Rmb18.19, with a 12-month price target of Rmb19.00, implying a 4.5% upside [1][2] - **P/E Ratio**: Current share price implies an 11x P/E on 2026E, within historical range of 10-20x [2] Risks and Challenges - **Hog Price Uncertainty**: Affected by domestic supply changes and imports [26][34] - **Operational Risks**: Including bio-security measures and disease control [26][34] - **Poultry Pricing Volatility**: Influenced by industry supply/demand dynamics and consumer preferences [26][34] Conclusion - Wens Foodstuff Group is navigating a challenging environment with depressed poultry margins but is expected to benefit from improving hog market conditions and effective cost management strategies. The current valuation reflects a cautious outlook on earnings growth in both the hog and poultry segments [33][37]