Investment Rating - Industry rating: Outperform the market (maintained rating) [11] Core Insights - The pig sector is experiencing continuous compression of profit margins, with a focus on the expected differences in the pig market. As of June 21, the average price of pigs in China was 14.37 CNY/kg, down 0.28% from the previous week, with self-breeding profits around 92 CNY/head, significantly narrowed from 160 CNY/head in early May. The average weight of pigs at slaughter was 128.28 kg, showing a slight decrease, while the proportion of pigs over 150 kg was 4.74% [1][15][16]. Summary by Sections Pig Sector - The pig price remains low, and the price of piglets continues to decline. The average price of 7 kg piglets is 443 CNY/head, and 50 kg sows are priced at 1619 CNY/head, with piglet prices down over 200 CNY from their peak. The supply side shows a clear trend of reduced weight, but absolute weights remain historically high [1][15]. - The report emphasizes the low valuation and expected differences in the pig sector, highlighting the profitability of leading companies. The average market value per head for major players like Muyuan Foods and DeKang Agriculture is between 2000-3000 CNY, while others are below 2000 CNY, indicating a relative historical low in valuations [2][16]. Pet Sector - JD.com reported significant growth in the pet sector during the 618 shopping festival, with a 32% year-on-year increase in transaction users and a 39% increase in new pet owners. Domestic brands are gaining a strong foothold, with 7 out of the top 10 pet food brands being Chinese [3][17]. - Pet food exports have shown continuous growth, with 139,100 tons exported from January to May 2025, a year-on-year increase of 10.89%, amounting to 4.175 billion CNY [3][18]. Poultry Sector - The white chicken sector faces uncertainties in breeding imports due to outbreaks of avian influenza, leading to a 40.66% year-on-year decline in breeding stock updates. The average price of broiler chicks is 2 CNY/bird, down from the previous week [4][19]. - The yellow chicken supply may contract, with demand being a critical variable. The current breeding stock is at a low level, and the demand for yellow chicken is expected to improve in the second half of the year [5][21]. - The egg-laying chicken sector is experiencing high prices due to restricted imports, with the average price of egg-laying chicks at 4.0 CNY/bird, down 2% from the previous week [6][22]. Planting Sector - The focus on food security emphasizes the need for self-sufficiency in grain production, with a significant contribution from yield improvements. The Ministry of Agriculture reports that yield increases contributed over 80% to grain production growth in 2024 [7][23]. - The report highlights the importance of biotechnology in enhancing agricultural competitiveness, with recommendations for leading seed companies and agricultural resource firms [8][24]. Feed and Animal Health Sectors - The feed sector is recommended for investment, particularly in companies like Haida Group, which is expected to see improved market share and performance. The prices of various fish species are showing mixed trends, with overall fish prices expected to rise due to policy support [9][25]. - The animal health sector is adapting to new demands and competition, with a focus on innovative products and potential growth in the pet health market. Key recommendations include companies like Keqian Biological and Zhongmu Co [10][26].

Group 1: Pet Economy - The pet economy continues to show high growth, with over 400 pet brands achieving sales growth of over 100% year-on-year during the "618" shopping festival [1] - The number of pet transaction users increased by 32% year-on-year, while new pet owners grew by 39% [1] - Top brands in various pet food categories include Royal Canin and Maffidi for cat and dog dry food, and Maffidi and Zeal for cat and dog snacks/wet food [1] Group 2: Pig Prices - The average price of external three yuan pigs rose to 14.22 yuan/kg, a week-on-week increase of 1.43% [2] - The average price of piglets decreased to 31.85 yuan/kg, down 3.16% week-on-week [2] - The average weight of market pigs decreased slightly to 128.28 kg, while the inventory rate of frozen products increased to 14.04% [2] Group 3: Grain Prices - Prices for corn, soybean meal, and wheat have increased, with corn averaging 2417.06 yuan/ton (up 0.47%), soybean meal at 3015.14 yuan/ton (up 1.59%), and wheat at 2441.67 yuan/ton (up 0.46%) [3] - Weather conditions and trade dynamics are influencing corn prices, while soybean meal prices are affected by supply concerns from the U.S. and geopolitical tensions [3] Group 4: Investment Recommendations - The pig farming sector is expected to enter a long-term profit growth phase after inventory reduction, with recommended companies including Juxing Agriculture, Shennong Group, and Muyuan Foods [4] - The post-cycle sector is seeing a recovery in feed and veterinary demand, with companies like Haida Group and Ruipu Biotech recommended [4] - The planting chain is showing positive fundamentals with rising grain prices, suggesting investment opportunities in companies like Suqian Agricultural Development and Beidahuang [4] - The pet food industry is in a growth phase, with increasing recognition of domestic brands and recommended companies including Guibao Pet and Zhongchong Co. [4]

Investment Rating - Maintain "Increase" rating for the agricultural sector [5] Core Views - The pet industry continues to show strong performance during the 618 shopping festival, with 400 merchants doubling their transaction volume and significant growth in user engagement [12][13] - In the pig farming sector, the average selling price of lean pigs is 14.05 CNY/kg, down 0.1% from the previous week, indicating a relatively low valuation and highlighting potential investment opportunities in leading companies with cost advantages [15][16] - The poultry sector is experiencing price declines, with broiler prices at 7.12 CNY/kg, down 2.1%, and chick prices down 32.1% to 1.86 CNY each, suggesting a need for monitoring price recovery opportunities [15][25] Summary by Sections Pet Industry - During the 618 shopping festival, 400 merchants on JD.com saw their transaction volume double, with a 32% year-on-year increase in transaction users and a 39% increase in new pet owners [2][13] - Leading brands in pet food include Royal Canin and Maffidi, with significant improvements in rankings for domestic brands [3][14] Pig Farming - The average price for lean pigs is 14.05 CNY/kg, down 0.1% from last week, while the average wholesale price for pork is 20.33 CNY/kg, up 0.3% [16][17] - The profitability for self-breeding pigs is 19.4 CNY/head, while purchasing piglets results in a loss of 186.79 CNY/head [18][19] Poultry Farming - Broiler prices have decreased, with the average price at 7.12 CNY/kg and chicken product prices at 8.65 CNY/kg, both showing declines [30][32] - The price of meat chicks has dropped significantly, indicating potential volatility in the market [25][28] Crop and Agricultural Products - The approval of genetically modified varieties is expected to enhance the growth potential of industry companies, with commercial sales anticipated to begin soon [4] - The agricultural sector is currently facing price fluctuations, with leading feed companies likely to benefit from their scale and supply chain advantages [15]

Core Viewpoint - Yunnan Shennong Agricultural Industry Group Co., Ltd. is committed to sustainable development through innovative practices in the agricultural industry chain, as showcased during the "2024 Sustainable Development Conference" at the 9th China-South Asia Expo [1] Group 1: Sustainable Development Practices - The company has adopted a green development and low-carbon circular economy approach, implementing a four-in-one circular agriculture model that includes pollution control, water resource recycling, nutrient cycling, and soil improvement [2] - In 2024, Shennong Group completed approximately 15,000 cubic meters of manure composting, with energy consumption equivalent to 19,768 tons of standard coal, a reduction of 1.68% compared to 2023 [2] - The company aims to reduce energy consumption per unit of product by 5% by 2026 and by 10% by 2030, with a long-term goal of significantly lowering carbon emission intensity from 2031 to 2050 [2] Group 2: Resilience in Sustainable Development - Shennong Group integrates sustainable development into every link of its supply chain, from feed production to food processing, creating a resilient growth model [3] - The company has established a biosecurity management system to ensure the safety of pig farming and employs a dual-driven model of "green formula + recycling" in feed production [3] Group 3: Financial Performance and Growth Targets - In 2024, the revenue from the slaughtering and food processing segment reached 1.473 billion yuan, a year-on-year increase of 19.6%, accounting for 26.38% of total revenue [5] - The company has seen significant growth in pig sales, with 227,150 pigs sold in 2024, and aims to reach 1 million pigs by 2030 [5] Group 4: Open Cooperation and International Collaboration - Shennong Group emphasizes green, low-carbon, and sustainable practices as essential for modernizing the agricultural industry and fulfilling social responsibilities [7] - The company has engaged in international collaborations with countries like the USA, Netherlands, and Ireland to enhance sustainable agricultural practices [7] - Shennong Group received the "Sustainable Development Cooperation Friendly Promotion Enterprise" award from the Irish Embassy in China, recognizing its leadership in promoting sustainable agricultural cooperation [7]

1. Report Industry Investment Rating - Not provided in the content 2. Core Viewpoints of the Report - The supply side has seen a slowdown in the slaughter rhythm of the breeding end, and the average slaughter weight has decreased, leading to a reduction in supply. However, the sow production capacity is in an increasing cycle in the second and third quarters, and the medium - term supply pressure is increasing. On the demand side, the slaughterhouse operating rate has stopped falling and rebounded, but high temperatures suppress the willingness to purchase pork, the terminal sales speed has slowed down, and the rebound space is limited, with a possible subsequent decline. Short - term supply reduction, along with policies discouraging secondary fattening and state reserve purchases boosting market sentiment, support a short - term rebound in hog futures prices. But the expected increase in medium - term supply and weak demand limit the upside of spot prices, which may drag down the futures price increase. Overall, the market is expected to be volatile. The strategy suggestion is to wait and see [6]. 3. Summary by Directory 3.1 Weekly Highlights Summary - **Market Review**: Hog prices rebounded, with the main contract rising 0.76% weekly [6][9]. - **Market Outlook**: Short - term supply reduction and policy support lead to a short - term futures price rebound, but medium - term supply increase and weak demand limit the upside of spot and futures prices. - **Strategy Recommendation**: Temporary wait - and - see [6]. 3.2 Futures Market Situation - **Price Movement**: Futures rebounded, with the main contract rising 0.76% weekly [9]. - **Net Position and Warehouse Receipts**: The net short position increased, and there were 750 futures warehouse receipts [11][15]. 3.3 Spot Market Situation - **Hog and Piglet Prices**: The national average hog price was 14.33 yuan/kg, unchanged from last week and down 0.9% from last month. The average price of 15 - kg weaned piglets was 34.14 yuan/kg, down 0.14 yuan/kg from last week and 16.04% from last month [26]. - **Pork and Sow Prices**: On June 12, the national average pork price was 25.26 yuan/kg, down 0.23 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 June 11, the pig - grain ratio was 6.12, down 0.17 from the previous week, below the break - even point [35]. 3.4 Upstream Situation - **Sow Inventory**: In April 2025, the national sow inventory was 40380000 heads, down 10000 from the previous month, up 1.31% year - on - year, equivalent to 103.6% of the normal inventory. In May, the sow inventory of large - scale farms increased by 0.33% month - on - month and 4.26% year - on - year, and that of small and medium - sized farms increased by 0.03% month - on - month and 8.07% year - on - year [40]. - **Hog Inventory**: In Q1 2023, the national hog inventory was 417310000 heads, down 10120000 from the previous quarter but up 8810000 year - on - year. In May, the hog inventory of large - scale farms increased by 0.45% month - on - month and 5.75% year - on - year, and that of small and medium - sized farms increased by 0.82% month - on - month and 8.07% year - on - year [43]. - **Hog Slaughter Volume and Weight**: In May, the hog slaughter volume of large - scale farms was 1059860000 heads, down 2.38% month - on - month but up 12.35% year - on - year, and that of small and medium - sized farms was 48960000 heads, down 1.48% month - on - month but up 73.46% year - on - year. The average slaughter weight was 123.78 kg, down 0.18 kg from last week [47]. 3.5 Industry Situation - **Breeding Profits**: As of June 20, the profit of purchasing piglets for breeding was a loss of 186.79 yuan/head, with a 19.4 - yuan increase compared to the previous week; the profit of self - breeding and self - raising was 19.4 yuan/head, with a 22.3 - yuan increase compared to the previous week. The poultry breeding profit was a loss of 0.47 yuan/head, with a 0.08 - yuan reduction in loss compared to the previous week [52]. - **Import Volume**: From January to May 2025, the cumulative imported pork was 450000 tons, with an average monthly import of 90000 tons, up 4.65% year - on - year, at a historically low level [57]. - **Substitute Products**: As of June 20, the price of white - striped chicken was 13.0 yuan/kg, unchanged from last week. As of June 19, the average national price difference between standard and fat hogs was - 0.22 yuan/kg, a 0.01 - yuan decrease from last week [60]. - **Feed Situation**: As of June 20, the spot price of soybean meal was 3015.14 yuan/ton, up 47.14 yuan/ton from the previous week; the corn price was 2417.06 yuan/ton, up 11.37 yuan/ton from the previous week. The DCE hog feed cost index closed at 971.29, up 0.99% from last week, and the price of finishing pig compound feed was 3.36 yuan/kg, unchanged from last week. In May 2025, the monthly feed production was 2762100 tons, up 98100 tons from the previous month [66][69][74]. - **CPI**: As of May 2025, the year - on - year CPI decreased by 0.1%, with a narrowing decline [77]. 3.6 Downstream Situation - **Slaughter and Cold Storage**: In the 25th week, the slaughterhouse operating rate was 27.97%, up 0.75 percentage points from last week and 17.77 percentage points higher than the same period last year. As of Thursday this week, the cold storage capacity of key domestic slaughterhouses was 17.35%, up 0.01% from last week [80]. - **Slaughter Volume and Catering Consumption**: As of April 2025, the slaughter volume of designated hog slaughtering enterprises was 30770000 heads, up 0.46% from the previous month. In May 2025, the national catering revenue was 4578.2 billion yuan, up 5.9% year - on - year [85]. 3.7 Hog - related Stocks - Mentioned stocks include Muyuan Co., Ltd. and Wens Co., Ltd., but no specific analysis is provided [86].

Core Viewpoint - The company, Shandong Bangji Technology Co., Ltd., plans to issue shares and pay cash to acquire assets from Riverstone Farm Pte. Ltd., which includes 100% equity stakes in several pig farming companies and a partial stake in a consulting firm, aiming to vertically integrate its operations in the livestock industry [9][19]. Group 1: Transaction Overview - The transaction involves issuing shares and paying cash to acquire 100% equity in North Stream Animal Husbandry, Rui Dong Wei Li, Xin Mu Animal Husbandry, Rui Dong Animal Husbandry (Lijin), Rui Dong Animal Husbandry (Shandong), and Wei Li Animal Husbandry (Binzhou), as well as 80% equity in Pi Si Dong [9][19]. - The specific transaction price and the number of shares to be issued are yet to be determined, pending the completion of auditing and evaluation work [9][20]. Group 2: Impact on Business Operations - The acquisition will allow the company to extend its operations from solely producing pig feed to include pig farming and sales, creating a vertically integrated supply chain [19][20]. - The company specializes in the research, production, and sales of pig feed, with a focus on optimizing feed formulations and production processes to maintain high product quality [19][20]. Group 3: Financial Implications - The transaction is expected to enhance the company's asset scale, revenue, and net profit attributable to shareholders, thereby improving overall performance [20]. - The final financial impact will be assessed after the completion of the auditing and evaluation processes [20]. Group 4: Regulatory and Approval Process - The transaction requires approval from the shareholders' meeting and regulatory bodies, including the China Securities Regulatory Commission [3][20]. - The company has committed to strict compliance with information disclosure obligations and will ensure that the transaction pricing is fair and reasonable [25][26]. Group 5: Stakeholder Commitments - The controlling shareholder and senior management have pledged not to reduce their holdings during the transaction process, ensuring stability [22][23]. - The company will implement measures to protect the rights of minority investors throughout the transaction [26].

Core Viewpoint - The second listing of Muyuan Foods on the Hong Kong Stock Exchange raises questions about the company's urgent need for capital, with a projected funding gap exceeding 60 billion yuan for the fiscal year 2024 [1][2]. Financial Situation - The company's cash ratio for 2024 is only 0.2, indicating tight liquidity [2]. - As of the end of the first quarter, the company has interest-bearing debt exceeding 80 billion yuan, with short-term debt reaching 62.17 billion yuan, while cash on hand is only 23.566 billion yuan, resulting in a short-term debt funding gap of nearly 40 billion yuan [2]. - The minimum cash reserve required for daily operations is estimated at 20.2 billion yuan, leading to a funding gap of over 7 billion yuan when considering restricted cash [3][4]. Dividend Distribution - In 2024, Muyuan Foods plans to distribute a total cash dividend of 7.588 billion yuan, which is 45.38% of its net profit [5][7]. - The actual controller of the company will receive over 4 billion yuan from the cash dividends [8]. - The company has revised its dividend policy to distribute at least 40% of its distributable profits in cash from 2024 to 2026 [7]. Operational Performance - In 2024, the company achieved revenue of 137.947 billion yuan, a 24.43% increase year-on-year, and a net profit of 17.881 billion yuan, marking a return to profitability [5]. - The first quarter of 2025 continued this trend, with revenue of 36.061 billion yuan, a year-on-year increase of 37.26%, and a net profit of 4.491 billion yuan, up 288.79% [5]. Market Position and Competition - Muyuan Foods has become the world's largest pig farming enterprise, with a market share increasing from 2.6% in 2021 to 5.6% in 2024 [9]. - The company's pig output increased from 6.12 million heads in 2022 to 7.16 million heads in 2024 [9]. - However, the cost advantage of Muyuan Foods appears to be narrowing as competitors like Wens Foodstuffs have improved their cost management [10]. Industry Trends - The pig price has recently dropped below the industry breakeven point, with prices reported at 14.24 yuan per kilogram, down 24.13% year-on-year [12]. - The number of breeding sows, which influences supply, remains above the normal level, indicating potential challenges for price recovery [13][14].

Group 1 - The core focus of the company is to improve its pig farming operations and reduce costs to compete with leading peers in the industry [1][6] - The company aims to lower its pig farming cost to below 13 yuan per kilogram, with a target for excellent operations to reach below 12 yuan per kilogram by the end of the year [6][8] - The company has a significant pig output scale of over 15 million heads, which highlights the importance of cost reduction for improving operational performance [6][10] Group 2 - The company’s pig farming gross margin is currently at 9.97%, which is significantly lower than its competitors, such as Muyuan Foods and Wens Foodstuffs, whose margins are around 19.21% and 20.3% respectively [2][3] - The company has implemented measures to enhance management of fattening pig farms and improve genetic traits to address long-term issues [3][4] - The company’s revenue sources are primarily from feed business (over 66%) and pig farming (around 30%), with the latter being highly sensitive to price fluctuations [8][9] Group 3 - The company has undergone a leadership change, with a new president appointed to focus on strategic adjustments and long-term growth [7] - The company’s profitability has been significantly affected by the volatility of pig prices, with gross margins swinging from 38.5% in high-price periods to -21.2% during downturns [8][9] - The company expects improved profitability in its pig farming segment this year due to the cessation of previous operational shutdowns and enhancements in disease prevention measures [10]

Report Information - Report Title: Pig Daily Report [1] - Date: June 20, 2025 [2] Industry Investment Rating - Not provided Core View - The central reserve frozen pork purchase and storage policy has stabilized pig prices and boosted confidence, leading to short - term rebounds in futures and spot prices. However, in the medium - to - long - term, the supply of live pigs continues to increase while demand enters a seasonal off - peak, and the supply - demand situation remains loose. Futures contracts are currently at a discount to the spot, and the medium - to - long - term trend is likely to be weak, with attention needed on the sustainability of future purchase and storage policies [9] Summary by Section 1. Market Review and Operation Suggestions - **Futures Market**: On the 19th, the main 2509 contract of live pigs opened slightly lower and trended downwards, closing with a negative candle. The highest price was 13,845 yuan/ton, the lowest was 13,715 yuan/ton, and the closing price was 13,760 yuan/ton, a 0.47% decrease from the previous day. The total open interest of the index decreased by 1,240 lots to 160,443 lots [8] - **Spot Market**: On the 19th, the national average price of三元hogs was 14.19 yuan/kg, a decrease of 0.03 yuan/kg from the previous day [8] - **Demand Side**: The price difference between fat and standard pigs remained low, the utilization rate of pigsty increased slightly, and the enthusiasm for secondary fattening replenishment was low, mostly in a wait - and - see state, weakening the support for prices. With rising temperatures, terminal demand weakened, slaughter enterprise orders were average, and the开工 rate and slaughter volume of slaughter enterprises remained low. On June 19th, the slaughter volume of sample slaughter enterprises was 146,800 heads, an increase of 200 heads from the previous day and an increase of 2,900 heads from a week ago [9] - **Supply Side**: According to Yongyi sample data, the planned slaughter volume in June was 23.629 million heads, a 1.02% increase compared to the actual slaughter volume in May. The slaughter volume continued to increase month - on - month. Enterprises were reducing weights and slaughtering normally, the slaughter volume of large pigs decreased, and the average slaughter weight decreased slightly [9] - **Policy Side**: On June 11th, the central reserve frozen pork purchase and storage had a listed competitive trading volume of 10,000 tons, with a transaction price of 20.3 - 20.8 yuan/kg for No. 2 - 4 meat [9] 2. Industry News - As of May this year, the inventory of reproductive sows in sample farms was 1.147 million heads, a month - on - month increase of 0.92% and a year - on - year increase of 8.57% [10][12] 3. Data Overview - As of May, the inventory of piglets in sample enterprises was 2.315 million heads, a month - on - month increase of 1.32% and a year - on - year increase of 14.3% [18] - In early June, the average proportion of secondary fattening sales was 0.75%, a decrease of 0.9 percentage points from the previous ten - day period [18] - As of the week of June 13th, the average slaughter weight of sample live pigs was 128.82 kg, a decrease of 0.35 kg from the previous week, a month - on - month decrease of 0.69%, and a year - on - year increase of 2.01% [18] - In early June, the utilization rate of fattening pigsties was 38.5%, an increase of 0.8 percentage points from the previous ten - day period. In the week of June 12th, the price difference between 150 - kg fat pigs and standard pigs was 0.06 yuan/jin, a week - on - week decrease of 0.02 yuan/jin [18]

Market Overview - The A-share market is experiencing a downward trend, with major indices showing declines, including the Shanghai Composite Index down by 0.79% and the Shenzhen Component Index down by 1.21% [2][4][7] - The overall market sentiment is cautious due to external factors such as the U.S. Federal Reserve's monetary policy and geopolitical tensions in the Middle East [9][10] Industry Dynamics - The photovoltaic industry is facing price weakness, with significant reductions in transaction prices for silicon materials and wafers, indicating a potential oversupply situation [30][32] - The lithium iron phosphate energy storage system has seen a price increase of 6% month-on-month, with the average winning bid price reaching 0.4561 yuan/Wh [33] - Commercial banks are accelerating the issuance of secondary capital bonds and perpetual bonds, reflecting a strong demand for capital supplementation amid declining profitability [36][38] Company Updates - DiZhe Pharmaceutical has completed patient enrollment for its global Phase III clinical trial of Shuwotai, a targeted therapy for advanced non-small cell lung cancer [44] - Hunan Huazhu High-Tech Co., Ltd. announced the early termination of a share reduction plan by a major shareholder, indicating potential stability in shareholder confidence [46] - The strategic partnership between Tao Motor and K-Scale aims to enhance the development of humanoid robots, focusing on cost reduction and market expansion [27][29]