Core Viewpoint - The article discusses the significance of the "anti-involution" policy in promoting high-quality economic development and the construction of a unified national market in China, emphasizing the need to address low-price disorderly competition and improve product quality [2][10]. Market Performance - Since the announcement of the "anti-involution" policies on July 1, the Shenyin Wanguo Glass Fiber sector has seen a cumulative increase of 14.2%, while the Shenyin Wanguo Steel and Photovoltaic Equipment sectors have risen by 11.36% and 9.73%, respectively [2]. Economic and Market Implications - Comprehensive governance of "involution" is expected to enhance overall productivity by correcting low-price competition and overcapacity, thereby preventing "bad money from driving out good" [10]. - The policy is anticipated to accelerate industry consolidation and improve corporate profit expectations, particularly in sectors like steel and cement [10]. - The construction of a unified market is expected to reduce cross-regional transaction costs and stimulate domestic demand [10]. Industry Beneficiaries - Industries likely to benefit from the "anti-involution" policies include photovoltaic, new energy vehicles, steel, and cement [16][18]. - In the photovoltaic supply chain, leading companies in silicon materials and glass are expected to benefit from price stabilization and capacity clearance [16]. - In the new energy vehicle sector, leading manufacturers are likely to restore profitability through production control and price stabilization [16]. Market Dynamics and Sustainability - The sustainability of the "anti-involution" market rally is contingent on demand-side support, with short-term market reactions driven by policy-induced supply reductions [13][14]. - Traditional industries like steel and coal are expected to see basic support for their market performance due to clear capacity constraints [14]. - The performance of related sectors will exhibit differentiation, with traditional industries benefiting from actual capacity reductions, while technology-intensive sectors will need to focus on innovation and efficiency [14][17]. Long-term Opportunities - Key opportunities include supply-demand optimization in sectors like steel and cement, technology barriers in photovoltaic and lithium battery sectors, and cost advantages in industries like pig farming [17]. - Companies with the ability to set technical standards within their supply chains are expected to achieve excess returns, highlighting the importance of long-term structural changes in the industry [17].

Investment Rating - The report maintains a "Buy" rating for the agriculture, forestry, animal husbandry, and fishery sector [4] Core Viewpoints - Recent policy guidance has led to a rapid decline in post-slaughter weight, allowing for a rebalancing of volume and price, with positive expectations for pig prices [3] - The long-term perspective indicates that the bottom of the production capacity cycle is becoming clearer, suggesting a potential long-term profit upturn for the sector [3] - The report highlights investment opportunities in various segments, including pig farming, feed, and planting chains, as well as the pet food sector [3] Summary by Sections Pig Farming Sector - In June, 13 listed pig companies collectively slaughtered 16.2681 million pigs, a month-on-month increase of 2.65% and a year-on-year increase of 47.55% [2][13] - The average selling price of pigs decreased by approximately 3% month-on-month and about 20% year-on-year, with prices ranging from 13.23 to 15.57 yuan/kg [14][15] - The average weight of slaughtered pigs in June was 125.06 kg, down 0.77 kg from May, indicating a trend towards reducing weight [17] Market Dynamics - The national average price for live pigs was 14.81 yuan/kg as of July 11, reflecting a week-on-week decline of 3.52% [28] - The demand for pork is weakening due to high temperatures affecting consumption and rising storage costs, leading to a gradual loosening of supply-demand dynamics [28] Investment Recommendations - The report recommends focusing on leading companies such as Muyuan Foods, Wens Foodstuff, and Juxing Agriculture, as well as companies in the feed and animal health sectors like Haida Group and Ruipu Biological [3] - In the planting chain, opportunities are highlighted for companies like Suqian Agricultural Development and Beidahuang [3] Other Segments - The pet food industry is experiencing growth, with increasing recognition of domestic brands and continuous growth of leading companies [3]

Core Viewpoint - The domestic pig farming industry is experiencing a weak price environment due to strong supply and weak demand, leading to a slow recovery in profitability for listed pig companies [3][4][9] Group 1: Sales Performance of Listed Pig Companies - In June, the average sales price of live pigs for listed companies generally declined year-on-year and month-on-month, with a drop of 15% to 20% [4][5] - Muyuan Foods (002714.SZ) achieved a record monthly sales volume of 7.019 million pigs in June, with a month-on-month increase of 9.57%, resulting in a sales revenue of 12.799 billion yuan, a year-on-year increase of 27.65% [5][6] - Wens Foodstuff Group (300498.SZ) maintained a sales volume of over 3 million pigs, selling 3.0073 million pigs in June, with a revenue of 4.92 billion yuan, reflecting a month-on-month price drop of 1.98% [6] - Smaller pig companies showed significant sales variation, with some doubling their sales while others saw a decrease of over 10% [4][5] Group 2: Market Trends and Price Movements - The pig price hit a 16-month low in June, dropping to 13.96 yuan/kg, but began to recover in July, reaching 15.31 yuan/kg, the highest since the Spring Festival [4][8] - The agricultural authorities are guiding the industry towards destocking and capacity reduction, indicating that the current pig cycle has moved past its bottom [3][9] - Analysts suggest that the "anti-involution" measures may help stabilize prices and improve profitability in the long term, as the industry shifts towards higher quality competition [9][10] Group 3: Future Outlook - The Ministry of Agriculture plans to reduce the breeding sow inventory by approximately 1 million heads to optimize production and improve quality [10] - The industry is expected to enter a new era of high-quality competition, with a focus on cost management and disease prevention becoming critical for large-scale farming enterprises [10] - The supply constraints in the pig industry may become a new normal, with limited expansion expected in the coming years, potentially leading to improved profitability for quality enterprises [10]

Core Viewpoint - The article highlights the significant turnaround in the performance of Muyuan Foods (牧原股份) in the first half of the year, with a projected net profit of 10.2 billion to 10.7 billion yuan, representing a year-on-year increase of over 1100% [2][3]. Group 1: Company Performance - Muyuan's profit surge is attributed not to pig prices but to increased output and effective cost control [3]. - The company achieved a sales volume of 38.394 million pigs in the first half, a year-on-year increase of 18.54%, with a notable 168% increase in piglet sales [26]. - The average breeding cost for Muyuan in 2024 is projected to be 14 yuan per kilogram, with costs decreasing to 12-12.1 yuan per kilogram by June, nearing the annual target of 12 yuan per kilogram [17][18]. Group 2: Industry Trends - The "anti-involution" policy is reshaping the pig farming industry, with government efforts to reduce inventory, capacity, and optimize structure [4][5]. - The number of breeding sows has been adjusted, with a reduction in the breeding sow inventory to stabilize supply and ensure food safety [33][41]. - The industry is experiencing a shift towards larger-scale operations, with over 70% of pig farming now being industrialized, enhancing capital reserves and risk management capabilities [45]. Group 3: Market Dynamics - The pig price is expected to stabilize after a decline, with the market anticipating a recovery due to the reduction in breeding sow inventory and overall weight control of pigs [7][43]. - The prices of key feed ingredients like corn and soybean meal have decreased, contributing to the overall reduction in breeding costs [22][23]. - The industry is likely to see narrow fluctuations in the pig cycle, with profitability increasingly dependent on companies' cost control capabilities rather than price volatility [50].

Core Viewpoint - The conference focused on the theme "China's Economy: Coexistence of Openness and Resilience," highlighting the strategic direction of Muyuan Foods in transforming traditional pig farming into a modern industry through technological advancements and international expansion [2]. Group 1: Company Strategy - Muyuan Foods has been listed on the A-share market for over 10 years, with a total market capitalization exceeding 200 billion yuan [2]. - The company emphasizes continuous investment in research and development, equipment upgrades, and talent development to modernize the pig farming industry [2][3]. - The company aims to reshape the public perception of pig farming by referring to its workers as "pig engineers," focusing on the integration of intelligent equipment to enhance efficiency and improve working conditions [3]. Group 2: International Expansion - Muyuan Foods announced its plan to list in Hong Kong, viewing this as a crucial step in its internationalization strategy [4]. - The Southeast Asian market, starting with Vietnam, is identified as a key opportunity due to existing gaps in equipment levels, research investment, and African swine fever control capabilities [4]. - The IPO is seen as a financing action that will enhance the company's visibility, reputation, and access to global resources, thereby strengthening its competitive position in Southeast Asia and beyond [4].

Core Viewpoint - The pig farming industry shows resilience despite declining prices, with companies focusing on cost reduction and efficiency improvement to maintain profitability [1][2]. Industry Overview - In the first half of the year, the average selling price of pigs decreased, with New Hope Liuhe reporting a drop from 15.41 yuan per kg in January to 14.18 yuan per kg in June, and Jiangsu Lihua Food Group showing a decline from 16.12 yuan per kg to 14.54 yuan per kg in the same period [1]. - The breeding stock remains high, with the number of breeding sows consistently above 40.5 million, significantly higher than the normal level of 39 million, leading to increased market supply [1]. - Analysts indicate that irrational selling behaviors in the breeding sector have intensified short-term supply pressures [1]. Company Performance - Leading companies like Muyuan Foods are expected to see significant profit increases in the first half of 2025 due to higher pig output and reduced breeding costs compared to the previous year [2]. - Despite lower sales prices, the industry still shows profitability in the first half of the year, with potential challenges in the second half if supply outpaces demand [2]. Market Dynamics - The supply of pigs is expected to remain higher than in the first half, while seasonal demand may increase, leading to a narrow fluctuation in average prices [2]. - The third quarter may see a seasonal price rebound, but sustained increases lack support, with competition among large-scale enterprises likely to drive down production costs [2]. Strategic Recommendations - Companies are advised to optimize their selling schedules and adjust their breeding structures, while also focusing on cost reduction through feed optimization and securing raw material prices [3]. - Emphasis on improving breeding technology, nutrition, and breed development is crucial to avoid blind expansion and adhere to industry development trends [3].

Group 1 - The company expects to turn a profit in the first half of 2025, with a projected net profit of between 190 million to 210 million yuan, and a net profit excluding non-recurring gains and losses of between 50 million to 70 million yuan [1] - The pig farming business has seen significant growth, with revenue reaching 4.077 billion yuan, a year-on-year increase of 134.59%, driven by a substantial rise in pig sales, which totaled 3.5766 million heads, up 125.04% year-on-year [2] - The average selling price of pigs increased by approximately 46 yuan per head compared to the previous year, contributing to the improved profitability of the pig farming business [2] Group 2 - The company anticipates an annual pig output of over 7 million heads in 2025, focusing on internal management improvements and cost reduction to navigate industry uncertainties [4] - Despite a decline in the average selling price of pigs from January to June, the company reported a production cost of 13.3 yuan per kilogram, allowing for slight profitability [3] - The industry is expected to experience a downward trend in pig prices in 2025, but normal profitability is still anticipated, with a projected increase in the proportion of large-scale pig farming to 75% [5]

Group 1 - The China Securities Regulatory Commission (CSRC) has requested supplementary materials from Muyuan Foods Co., Ltd. regarding its compliance with foreign investment policies and the use of funds raised for global expansion [1] - Muyuan Foods is a global leader in the pig farming industry, covering the entire supply chain from breeding to meat processing [2] - The company's global market share in pig production has increased from 2.6% in 2021 to 5.6% in 2024, surpassing the combined market share of its second to fourth competitors [2] Group 2 - From 2014 to 2024, Muyuan Foods achieved a compound annual growth rate (CAGR) of 48.7% in total revenue, ranking first among the top ten listed pork companies globally in terms of revenue growth [2][3] - The company's net profit CAGR during the same period reached 72.7%, with an average net profit margin of 19.0%, making it the only company among the top ten pork companies to maintain an average net profit margin above 15% [3] - The global pork consumption is projected to grow from 95.2 million tons in 2020 to 115.3 million tons in 2024, with a CAGR of 4.9%, indicating significant market potential for the industry [3]

Core Viewpoint - The company expects a significant decline in net profit for the first half of 2025, but a substantial improvement in its core business profitability is noted, indicating a shift from reliance on non-recurring gains to sustainable earnings from its main operations [1][4]. Financial Performance - The company forecasts a net profit attributable to shareholders of 350 million to 370 million yuan for the first half of 2025, representing a year-on-year decline of 56.01% to 58.39% [1]. - The expected net profit after excluding non-recurring items is projected to be between 238 million and 258 million yuan, a significant recovery from a loss of 281 million yuan in the same period last year [1]. - In Q1 2025, the company reported revenue of 2.44 billion yuan, a year-on-year increase of 19.2%, and a net profit of 102 million yuan after excluding non-recurring items, compared to a loss of 455 million yuan in the previous year [1]. Operational Strategies - The company has implemented cost-reduction strategies, including smart upgrades to breeding facilities, disease prevention optimization, and innovative farming models, which have strengthened its core business profitability [2]. - The focus on cost control has allowed the company to achieve a turnaround in its core business, contrasting with the previous year's reliance on non-recurring gains for profitability [1][4]. Regulatory and Financial Challenges - The company faced regulatory scrutiny for failing to return 1.16 billion yuan of idle raised funds on time, leading to administrative measures from the regulatory authorities [3]. - Cash flow and debt pressure remain significant issues, with a negative operating cash flow of 964 million yuan in 2024, although there was an improvement in Q1 2025 [3]. - The company secured 740 million yuan in investments from industry investors to alleviate debt and improve liquidity, but the long-term financial health remains uncertain [3]. Industry Context - The cyclical volatility of pig prices continues to pose a risk to the profitability of breeding companies, including the company, which has achieved temporary profitability through cost reduction [4]. - The ability to maintain stable profitability amidst industry cycles remains a critical challenge for the company [4].

Report Summary 1. Report Industry Investment Rating No information provided in the report. 2. Core Viewpoints - The price of live pigs increased slightly, with the main contract rising 0.28% weekly. In the short - term, the supply is still tight as the mid - month increase in large - scale farm slaughter is slow, and smallholders are reluctant to sell, and the average slaughter weight is decreasing. However, there is supply pressure in the medium - term as the sow production capacity is in an increasing cycle in the third quarter. [6][10] - On the demand side, high temperatures suppress pork purchasing, and with schools on holiday, the terminal sales are slow, and the slaughterhouse operating rate has declined continuously but is higher than last year. Overall, it's the off - season for consumption, and demand is weakening steadily. The slaughter rhythm of farmers and the entry of second - fattening are key factors affecting short - term market conditions. [6] - Currently, tight supply supports a strong price oscillation, but the increase may slow down as the mid - month slaughter volume may recover. In the medium - term, the off - season demand and medium - term supply pressure will limit the price upside. [6] 3. Summary by Directory 3.1. Week - on - Week Summary - **Market Review**: The live pig price increased slightly, with the main contract rising 0.28% weekly. [6][10] - **Market Outlook**: Short - term supply is tight, medium - term has supply pressure; demand is in the off - season and weakening. The slaughter rhythm and second - fattening entry are key short - term factors. [6] - **Strategy Recommendation**: Interval trading or 9 - 1 positive spread trading. [6] 3.2. Futures and Spot Markets 3.2.1. Futures Market - The futures price increased slightly this week, and the net short position of the top 20 holders increased. As of July 11, the net short position was 16,877 lots, an increase of 6,313 lots from last week, and there were 447 futures warrants, a decrease of 3 from last week. [10][12][16] 3.2.2. Spot Market - **Live Pig and Piglet Prices**: The national average live pig price was 14.92 yuan/kg this week, a decrease of 0.37 yuan/kg from last week but an increase of 4.48% from last month. The average price of 15 - kg weaned piglets was 34.03 yuan/kg, unchanged from last week but a decrease of 0.32% from last month. [27] - **Pork and Sow Prices**: The national average pork price was 25.35 yuan/kg in the week of July 3, an increase of 0.15 yuan/kg from the previous week. The average price of binary sows was 32.52 yuan/kg, unchanged from the previous week. [31] - **Pig - Grain Ratio**: As of the week of July 2, 2025, the pig - grain ratio was 6.21, an increase of 0.08 from the previous week, but still below the break - even point. [36] 3.3. Industry Situation 3.3.1. Upstream - **Sow Inventory**: In May 2025, the inventory of breeding sows increased. The Ministry of Agriculture and Rural Affairs data showed that the inventory was 40.42 million heads at the end of May, a 0.1% month - on - month increase and a 1.15% year - on - year increase, reaching 103.6% of the normal level. Mysteel data also showed an increase in both large - scale farms and small - scale farms. [41] - **Live Pig Inventory**: In Q1 2023, the live pig inventory was 417.31 million heads, a decrease of 10.12 million heads from the end of the previous quarter but an increase of 8.81 million heads year - on - year. In May, the inventory of commercial pigs in large - scale farms and small - scale farms increased month - on - month according to Mysteel data. [44] - **Slaughter Volume and Weight**: In May, the slaughter volume of sample enterprises decreased month - on - month, and the average slaughter weight decreased. The average slaughter weight of national ternary hybrid live pigs this week was 123.50 kg, a slight decrease of 0.02 kg from last week. [49] 3.3.2. Industry Profit - **Livestock Farming Profit**: As of July 11, the profit of purchasing piglets for fattening was 31.6 yuan/head, an increase of 57.86 yuan/head week - on - week; the profit of self - breeding and self - fattening was 133.87 yuan/head, an increase of 14.15 yuan/head week - on - week. [54] - **Poultry Farming Profit**: As of July 11, the profit of laying hens was - 0.69 yuan/head, with the loss increasing by 0.11 yuan/head week - on - week, and the profit of 817 meat - hybrid chickens was - 0.92 yuan/head. [54] 3.3.3. Domestic Market - In the first five months of 2025, China imported a total of 450,000 tons of pork, with a monthly average of 90,000 tons, a 4.65% year - on - year increase, and it was at a historically low level during the same period. [55][59] 3.3.4. Substitute Products - As of the week of July 11, the price of white - striped chickens was 13.20 yuan/kg, unchanged from last week. As of the week of July 10, the average price difference between standard and fat pigs was - 0.14 yuan/kg, a decrease of 0.08 yuan/kg from last week. [62] 3.3.5. Feed - **Feed Raw Material Prices**: As of July 11, the spot price of soybean meal was 2,914.86 yuan/ton, a decrease of 1.43 yuan/ton from the previous week; the price of corn was 2,421.57 yuan/ton, a decrease of 14.7 yuan/ton from the previous week. [68] - **Feed Index and Price**: As of July 11, the closing price of the Dalian Commodity Exchange pig feed cost index was 935.32, a 1.63% decrease from last week. The price of finishing pig compound feed was 3.35 yuan/kg, unchanged from last week. [71] - **Feed Production**: In May 2025, the monthly feed production was 27.621 million tons, an increase of 0.981 million tons month - on - month. [76] 3.3.6. CPI - As of June 2025, China's CPI increased by 0.1% year - on - year. [80] 3.3.7. Downstream - **Slaughter Enterprises**: In the 28th week, the operating rate of slaughter enterprises was 25.22%, a decrease of 1.28 percentage points from last week but 5.48 percentage points higher year - on - year. As of Thursday this week, the frozen product storage rate of key domestic slaughter enterprises was 17.46%, an increase of 3% from last week. [83] - **Slaughter Volume and Catering**: In May 2025, the slaughter volume of designated pig slaughtering enterprises was 32.16 million heads, a 4.52% increase from the previous month. The national catering revenue in May was 457.82 billion yuan, a 5.9% year - on - year increase. [88] 3.3.8. Live Pig Stocks - The report shows the trend charts of Muyuan Co., Ltd. and Wens Co., Ltd., but no specific analysis is provided. [89][91]