Core Viewpoint - The stock of Wens Foodstuff Group Co., Ltd. has shown a mixed performance in recent trading, with a year-to-date increase of 12.56% but a slight decline in the last five and twenty trading days [1][2]. Financial Performance - For the period from January to September 2025, Wens achieved a revenue of 75.817 billion yuan, reflecting a year-on-year growth of 0.53%. However, the net profit attributable to shareholders decreased by 17.98% to 5.256 billion yuan [2]. - Cumulative cash dividends since the A-share listing amount to 28.116 billion yuan, with 4.942 billion yuan distributed over the last three years [3]. Shareholder Information - As of September 30, 2025, the number of shareholders for Wens was 81,100, a decrease of 10.94% from the previous period. The average number of circulating shares per person increased by 12.11% to 73,543 shares [2]. - Among the top ten circulating shareholders, Hong Kong Central Clearing Limited holds 144 million shares, an increase of 5.5013 million shares compared to the previous period. Conversely, E Fund's ChiNext ETF reduced its holdings by 19.091 million shares to 113 million shares [3]. Stock Performance - As of October 27, Wens' stock price was 18.36 yuan per share, with a market capitalization of 122.166 billion yuan. The stock experienced a 2.00% increase during the trading session [1]. - The stock has seen a trading volume of 547 million yuan, with a turnover rate of 0.50% [1].

Core Insights - The "Insurance + Futures" project in Zunyi, Guizhou, aims to support the local pig farming industry by covering over 1,500 tons of pigs, providing significant compensation to farming enterprises and establishing a price safety net for the industry [1][2] - Zunyi is a key area for pig farming in Guizhou, benefiting from favorable climate and resources, making the pig industry a cornerstone of the local agricultural economy [1] - The project targets leading farming enterprises with annual outputs exceeding 10,000 pigs, which play a crucial role in ensuring local pork supply and stabilizing the regional livestock industry [1] Industry Challenges - The pig farming sector faces "triple pressures," including an oversupply of pigs in 2024 leading to weak price fluctuations, high feed costs from corn and soybean meal, and increased disease prevention costs, resulting in some enterprises experiencing losses despite higher outputs [1] - There is an urgent need for enterprises to secure farming profits and move away from a passive reliance on market prices [1] Customized Solutions - The project was designed based on in-depth research into the operational characteristics of Zunyi's farming enterprises, ensuring stable income support even during price downturns [2] - The initiative has created a demonstration effect where larger enterprises lead smaller farmers, encouraging them to actively manage risks rather than passively endure them [2] Future Directions - The company aims to continue focusing on regional agricultural needs, optimizing options strategies, and shortening claims service cycles to enhance financial support for agriculture [2] - The "Insurance + Futures" model is becoming deeply integrated into the development of the pig industry in Southwest China, contributing to national food security and rural revitalization efforts [2]

Core Viewpoint - The report from Zhonghang Securities highlights a decrease in the number of breeding sows in September, indicating potential further reductions in pig production capacity due to ongoing industry losses and seasonal disease outbreaks [1][2]. Industry Analysis - The number of breeding sows in China as of September was 40.35 million, a year-on-year decrease of 280,000 heads (0.7%) and a month-on-month decrease of 90,000 heads (0.2%) [1]. - The average price of live pigs in China as of October 25 was 11.83 yuan per kilogram, reflecting a week-on-week increase of 5.4%, a month-on-month decrease of 7.2%, and a year-on-year decrease of 32.7%, indicating historically low prices [1]. - As of October 24, the profit margins for pig farming were negative, with losses of 289.07 yuan per head for purchased piglets and 185.68 yuan per head for self-bred piglets, marking an increase in losses compared to the previous month [1][3]. Market Dynamics - The pig farming sector is expected to experience a reasonable reduction in production capacity due to ongoing losses and government policies aimed at reducing overcapacity, which may positively influence pig prices and market trends [2]. - The sales volume of pigs in September reached 7.6726 million heads, a month-on-month increase of 3.89%, while the average selling price decreased to 13.89 yuan per kilogram, down 4.89% from the previous month [3]. - The average weight of pigs sold in September was 102.4 kg, reflecting a month-on-month increase of 1.14% [3]. Animal Health Sector - The animal health industry is expected to recover alongside improvements in the pig farming sector, as historical data shows higher sales during profitable farming years [4]. - Increased competition in the animal health sector is anticipated, with weaker companies exiting the market, leading to higher industry concentration and benefits for larger firms with strong R&D capabilities [4]. - The domestic animal health market has significant growth potential, particularly in the pet medicine sector, supported by government policies promoting domestic vaccine production [4]. Agricultural Sector - The global grain supply and demand dynamics are being affected by geopolitical factors, with adjustments in production forecasts for wheat, rice, corn, and soybeans for the 2025/26 season [5][6][7]. - The focus on seed industry revitalization is expected to continue, with policies promoting the commercialization of biotechnology and genetically modified crops, benefiting leading companies in the sector [8]. Pet Industry - The domestic pet food market is projected to grow significantly, with compound annual growth rates of 17% for pet staple food, 15% for nutritional products, and 25% for snacks by 2026 [8]. - Leading domestic pet food companies are advancing brand strategies and expanding globally, which will help mitigate tariff risks and support overseas business growth [8].

Core Insights - The report highlights the ongoing recovery in the A-share market, with structural opportunities emerging in various sectors, particularly technology and energy [14][15][16] - The report emphasizes the importance of long-term capital in enhancing market stability and supporting high-quality development in the capital market [11][12] Domestic Market Performance - The Shanghai Composite Index closed at 3,950.31, with a daily increase of 0.71%, while the Shenzhen Component Index rose by 2.02% to 13,289.18 [4] - The average price-to-earnings (P/E) ratios for the Shanghai Composite and ChiNext Index are 16.02 and 48.28, respectively, indicating a favorable environment for medium to long-term investments [13][15] International Market Performance - The Dow Jones Industrial Average closed at 30,772.79, down 0.67%, while the S&P 500 and Nasdaq also experienced declines of 0.45% and 0.15%, respectively [5] Industry Analysis - The report notes a significant decline in the media sector, with a 6.65% drop in the media index from September 29 to October 22, underperforming compared to the broader market indices [19] - The automotive industry achieved record production and sales figures in September, with production reaching 3.28 million vehicles and sales at 3.23 million, marking year-on-year increases of 17.15% and 14.86% respectively [24][25] - The new energy vehicle penetration rate reached 49.72% in September, reflecting strong growth in this segment [24] Technology and AI Developments - The report discusses advancements in AI applications, particularly the release of OpenAI's latest video generation model, which enhances the capabilities of AI in content creation [22] - The software industry in China saw a revenue increase of 12.6% year-on-year in the first eight months of 2025, indicating a robust growth trajectory [26] Investment Recommendations - The report suggests focusing on sectors such as gaming, which is expected to benefit from favorable policies and strong market demand, as well as the publishing sector, which offers stable returns due to its low volatility and high dividend yields [21][25] - In the automotive sector, the report recommends attention to companies that are well-positioned to benefit from the ongoing transition to smart and electric vehicles [25]

Report Summary 1. Report Industry Investment Rating No relevant information provided. 2. Core Viewpoints of the Report - The current pig market is characterized by an oversupply situation, with high pig production capacity and a weak demand outlook. The short - term supply - demand imbalance is difficult to reverse, and the pig price is under pressure. Although the policy has released positive signals, the actual reduction in production capacity is less than expected. The pig price is expected to remain in a weak and volatile state in the short term, with a possible seasonal improvement in the fourth quarter and a potential price rebound [7][8]. - For the strategy, the main contract of live pigs is expected to fluctuate widely at a low level, with a reference range of 11,000 - 13,000. In the options market, selling out - of - the - money put options is recommended [8]. 3. Summary by Directory 3.1. Weekly Views and Strategies - **Fundamental Viewpoints** - **Spot Market**: The weekly average price of live pigs increased to 11.33 yuan/kg, up 3.47% week - on - week and down 34.92% year - on - year. The low pig price has increased the enthusiasm for secondary fattening, providing some support around 10 yuan/kg. However, the high supply and weak demand situation persists, and the market is expected to remain weak and volatile [7][14]. - **Production Capacity**: In the first three quarters of 2025, the national pig slaughter reached 529.92 million heads, a year - on - year increase of 1.8%. The pork output was 43.68 million tons, a year - on - year increase of 3.0%. By the end of the third quarter, the national pig inventory was 436.8 million heads, a year - on - year increase of 2.3%. In September 2025, the inventory of breeding sows was 4.035 million heads, a year - on - year decrease of 0.7%. The production efficiency has improved, and the pig slaughter is expected to continue to grow until May 2026 [7]. - **Strategy Views and Outlook** - **Outlook**: Policy signals are positive, but the actual reduction in production capacity is slow. In the short term, the supply is abundant, and it is the off - season for demand, so the pig price is under pressure. In the medium term, the production capacity is still being released. The government has introduced a "double 100,000 - head" task for large - scale breeding enterprises. The supply pressure in the fourth quarter of this year and the first quarter of next year is still large, but the demand may improve seasonally in the fourth quarter [8]. - **Strategy**: The supply - demand imbalance is expected to continue in the short term. The main contract is expected to fluctuate between 11,000 - 13,000. Selling out - of - the - money put options is recommended [8]. 3.2. Futures and Spot Market - **Pig Futures and Spot Prices**: The weekly average price of live pigs increased to 11.33 yuan/kg, up 3.47% week - on - week and down 34.92% year - on - year. The low price has increased the enthusiasm for secondary fattening, but the high supply and weak demand situation persists [14]. - **Futures - Spot Basis**: No specific information provided. - **Futures Price Spreads**: No specific analysis provided. - **Standard - Fat and Hairy - White Price Spreads**: The prices of standard and fat pigs increased synchronously this week. The average price difference between standard and fat pigs was - 0.76 yuan/kg, the same as last week. The increase was due to the sufficient supply of standard pigs, low inventory of large - weight fat pigs, and the recovery of catering consumption. The price increase of standard pigs was more significant, leading to a narrowing of the price difference [34]. - **Prices of Piglets and Binary Sows**: The weekly average price of 7 - kg piglets was 166.43 yuan/head, up 0.72% week - on - week and down 50.57% year - on - year. The low market sentiment and strict environmental regulations in Guangdong and Guangxi have reduced the enthusiasm for piglet replenishment [38]. - **Price of Culled Sows**: The average price of culled sows this week was 8.29 yuan/kg, up 2.01% week - on - week and down 35.59% year - on - year. The price is expected to continue to fluctuate with the pig price [41]. 3.3. Production Capacity - **Inventory of Breeding Sows**: In September 2025, the national inventory of breeding sows was 4.035 million heads, a year - on - year decrease of 0.7% and a month - on - month decrease of 0.2%. Although it is within the normal range, it is at the upper limit. The production efficiency has improved, and the pig slaughter is expected to grow until May 2026. According to sample data, the inventory of breeding sows in large - scale farms decreased slightly in September, and the inventory of small and medium - sized farms also decreased [45][48]. - **Culling Volume of Breeding Sows**: In September, the culling volume of breeding sows in large - scale farms was 106,603 heads, a month - on - month increase of 2.54% and a year - on - year increase of 9.60%. The culling volume of small and medium - sized farms was 11,526 heads, a month - on - month increase of 13.80% and a year - on - year increase of 29.83%. The culling volume is expected to continue to increase in October, but the process may be slow [51]. - **Inventory Proportion of Breeding Sows**: No specific analysis provided. 3.4. Supply Side - **Inventory of Commercial Pigs**: In September, the inventory of commercial pigs in large - scale farms was 36.8499 million heads, a month - on - month increase of 1.44% and a year - on - year increase of 5.29%. The inventory of small and medium - sized farms was 1.5402 million heads, a month - on - month increase of 2.93% and a year - on - year increase of 6.29%. The inventory is expected to increase in October [58]. - **Slaughter Volume of Commercial Pigs**: In September, the slaughter volume of commercial pigs in large - scale farms was 10.2173 million heads, a month - on - month decrease of 4.54% and a year - on - year increase of 23.49%. The slaughter volume of small and medium - sized farms was 0.4803 million heads, a month - on - month increase of 1.39% and a year - on - year increase of 33.52%. The slaughter volume is expected to increase in October [61]. - **Average Slaughter Weight of Commercial Pigs**: The average slaughter weight of national outer - ternary pigs this week was 123.21 kg, a week - on - week decrease of 0.18% and a year - on - year decrease of 0.49%. The weight is expected to be supported next week [67]. 3.5. Demand Side - **Pig Slaughter Volume**: The proportion of pigs under 90 kg and over 150 kg in the slaughter volume remained the same as last week. The temperature drop has increased the expectation of a wider standard - fat price difference, but it has little impact on the slaughter proportion of small and large - weight pigs [71]. - **Cold Storage Rate of Slaughtering Enterprises**: The fresh - sales rate of key slaughtering enterprises this week was 86.14%, the same as last week. The cold - storage rate was 18.08%, an increase of 0.24% from last week. The fresh - sales rate is expected to decline next week, and the cold - storage rate may continue to increase slightly [76]. - **Operating Rate and Fresh - Sales Rate of Slaughtering Enterprises**: The operating rate of slaughtering enterprises this week was 34.94%, an increase of 2.56 percentage points from last week and 7.35 percentage points from the same period last year. The operating rate is expected to continue to increase slightly next week [77]. - **Substitute Prices**: No specific analysis provided. 3.6. Cost and Profit - **Pig Breeding and Slaughtering Profit**: The pig breeding industry has entered a deep - loss stage. The average loss per head of self - breeding and self - raising and purchasing piglets this week was 149.54 yuan and 279.65 yuan respectively, both showing a downward trend. The price is expected to remain strong in the short term, but the overall supply - demand pattern has not changed fundamentally [91]. - **Slaughter Gross Profit and Feed - to - Meat Ratio**: No specific analysis provided. - **Pig - Grain Ratio**: The pig - grain ratio this week was 5.13, a week - on - week increase of 3.89%. The market has returned to the third - level early - warning range. The pig - grain ratio is expected to fluctuate little next week [98].

Investment Rating - The report indicates a neutral investment rating for the agricultural sector, with expectations of limited price fluctuations in the near term [71]. Core Insights - The agricultural sector index has underperformed compared to the Shanghai Composite Index, with a weekly decline of 1.36% [13][14]. - The report highlights a downward trend in pig prices, with the industry currently facing losses, and anticipates further price declines in the short term [3][20]. - The poultry sector shows signs of stabilization, particularly for yellow-feathered chickens, while white-feathered chickens continue to face price pressures [4][34]. - The beef market is expected to see price increases as it enters the consumption peak season, despite ongoing losses in the dairy sector [5][39]. - The planting industry is experiencing short-term supply pressures, but there is potential for improvement if grain production decreases significantly [6][46]. - Feed prices have stabilized, and the aquaculture sector is showing positive price trends for certain species [58]. Summary by Sections 1. Market Review - The agricultural index closed at 2889.08 points, down 1.36% week-on-week, while the Shanghai Composite Index rose by 2.88% [13][14]. 2. Key Data Tracking 2.1 Swine Farming - National pig prices are at 11.82 yuan/kg, with a weekly increase of 5.82%. The average weight of pigs at slaughter is 127.90 kg, indicating high inventory levels despite price declines [20][21]. - The industry is expected to continue facing losses, with a recommendation to focus on low-cost, high-quality enterprises like Muyuan Foods and Wens Foodstuffs [3][21]. 2.2 Poultry Farming - The average price for white feather chickens is 6.88 yuan/kg, showing slight increases, while profits for parent stock chickens have improved [32][34]. - The report suggests that if consumer demand recovers, poultry prices may rebound [34]. 2.3 Livestock - Live cattle prices in Shandong are at 27.12 yuan/kg, with expectations for price increases as the consumption season approaches [5][39]. - The dairy sector is under pressure, but there are signs of potential recovery in raw milk prices next year [5][39]. 2.4 Planting Industry - Domestic corn prices are at 2174.29 yuan/ton, with fluctuations expected due to new crop releases and external uncertainties [45][46]. - The report emphasizes the importance of monitoring grain prices and potential production declines [46]. 2.5 Feed and Aquaculture - Feed prices remain stable, with specific fish prices showing upward trends, particularly for shrimp and certain fish species [58][63].

Group 1: Overall Financial Performance - In the first three quarters of 2025, the company's total revenue reached 20.744 billion CNY, a year-on-year increase of 3% [3] - The net profit attributable to shareholders was 2.57 billion CNY, reflecting a significant year-on-year growth of 92.56% [3] - In Q3 2025, the company achieved a revenue of approximately 7.184 billion CNY, marking a year-on-year increase of 1.94% [3] Group 2: Revenue Breakdown by Business Segment - Feed products generated revenue of 13.423 billion CNY, a decline of 4.67%, accounting for 64.71% of total revenue [3] - The pig farming segment reported revenue of 4.903 billion CNY, a year-on-year increase of 49.03% [3] - Seed products achieved revenue of 513 million CNY, showing a remarkable growth of 81.07% [3] Group 3: Profitability Analysis - The feed segment contributed a profit of approximately 400 million CNY, while the pig farming segment also reported a profit of around 200 million CNY [3] - The seed segment incurred a loss of approximately 15 million CNY [3] - Total losses from other businesses and public expenses amounted to about 480 million CNY [3] Group 4: Cost Management - Selling expenses decreased by 3.58% to 817 million CNY, while management expenses fell by 5.66% to 1.019 billion CNY [3] - Financial expenses were reduced by 9.51% to 359 million CNY [3] Group 5: Business Segment Performance - In the feed business, external sales volume reached 4.0162 million tons, a year-on-year increase of 2.9% [4] - The pig farming segment saw an output of 3.1608 million pigs, generating revenue of 4.903 billion CNY [5] - The seed segment sold 20.44 million kilograms of crops, a significant increase of 151% year-on-year, with sales revenue exceeding 500 million CNY [5] Group 6: Seed Business Developments - The company ranked third among the top 20 enterprises in national seed sales, leading in the private seed industry [6] - The company has developed six nationally approved high-yield soybean varieties, contributing to domestic self-sufficiency [7] - The company holds a leading position in the domestic market for genetically modified traits, with 59% of approved corn varieties utilizing its traits [8]

Investment Rating - The report suggests a focus on low-cost quality pig farming leaders for investment opportunities [2][12] Core Views - The current price of lean meat pigs is 11.6 CNY/kg, up 5.6% from last week, but the upward momentum lacks sustainability due to ongoing supply pressures and the absence of a consumption peak [11][12] - In the poultry sector, white feather chicken prices have seen slight increases, with broiler prices at 6.88 CNY/kg, up 0.1%, and chicken product prices at 8.65 CNY/kg, up 0.6% [12][29] - The approval of genetically modified varieties is expected to enhance the growth potential of industry companies, with commercial sales anticipated to begin post-publicity period [12] - The agricultural sector is experiencing price volatility, with leading feed companies likely to replace smaller competitors due to their advantages in procurement, scale, and capital [12] Summary by Sections Livestock - The lean meat pig price is currently 11.6 CNY/kg, reflecting a 5.6% increase from the previous week, while the average wholesale price of pork is 17.73 CNY/kg, down 1.7% [13][14] - The average weight of slaughtered pigs has decreased by 0.3% to 127.9 kg, and the price of 15 kg piglets has dropped by 2.2% to 19.55 CNY/kg [20][22] - Self-breeding and self-raising profitability has improved, with average losses of -185.68 CNY per head for self-breeding, and -289.07 CNY for purchased piglets [17][18] Poultry - The price of broiler chicks has increased by 0.9% to 3.32 CNY each, while the average price of white feather chickens is 6.88 CNY/kg, up 0.1% [12][29] - The profit from parent stock chicken breeding is 0.57 CNY per chick, while broiler breeding remains at a loss of -1.76 CNY per chick [35][36] Agricultural Products - The domestic corn price has decreased by 0.6% to 2248.63 CNY/ton, while soybean prices have increased slightly by 0.1% to 3996.84 CNY/ton [45][58] - The report highlights the potential for investment in the agricultural sector due to the anticipated growth from the commercialization of genetically modified crops [12]

Investment Rating - The report maintains an "Outperform" rating for the agricultural sector [5] Core Views - The report is optimistic about the reversal of the livestock cycle in 2025, with both domestic and international beef and raw milk markets expected to improve [4] - The pig industry is supported by a trend of "anti-involution," which is likely to stabilize long-term prices [4] - The pet consumption sector is identified as a growing industry benefiting from demographic changes [4] - The feed sector, particularly Haida Group, is expected to achieve excess returns due to the recovery in aquaculture [4] - The poultry sector is anticipated to see a long-term increase in consumption, with yellow chicken likely to benefit first from domestic demand recovery [4] Summary by Sections Swine - As of October 24, the price of live pigs is 11.82 CNY/kg, up 6.01% week-on-week [2] - The price of 15kg piglets is approximately 17.66 CNY/kg, down 1.83% week-on-week [2] - The industry is experiencing orderly progress in "anti-involution," which is expected to support profitability [14] Poultry - The supply of white chickens has slightly increased, with a focus on seasonal consumption recovery [2] - As of October 24, the price of chicken seedlings is 3.36 CNY/piece, up 2.13% week-on-week [15] - The price of eggs in major production areas is 3.69 CNY/jin, down 1.99% week-on-week and down 30.34% year-on-year [2][15] Beef - A new round of beef price increases has begun, with a positive outlook for the beef cycle reversal in 2025 [2] - As of October 24, the average price of beef is 66.61 CNY/kg, up 0.36% week-on-week [16] Raw Milk - The average price of raw milk in major domestic production areas is 3.04 CNY/kg, stable week-on-week but down 2.88% year-on-year [3] Soybean Meal - The domestic soybean spot price is 3997 CNY/ton, up 0.09% week-on-week, while soybean meal is priced at 2984 CNY/ton, down 0.86% week-on-week [3] Corn - The domestic corn spot price is 2249 CNY/ton, down 0.64% week-on-week but up 0.10% year-on-year [3] Sugar - The price of sugar in Nanning, Guangxi, is 5750 CNY/ton, down 0.69% week-on-week [3] Rubber - The price of Thai rubber is 1860 USD/ton, up 0.54% week-on-week, while full latex in Shandong is priced at 14700 CNY/ton, up 5.00% week-on-week [3]

Investment Rating - Industry Rating: Outperform the market (maintained rating) [8] Core Views - The poultry sector is experiencing a high season for avian influenza, with a focus on the need for overseas breeding imports, particularly for white chickens. The French Ministry of Agriculture has raised the risk level for highly pathogenic avian influenza from "medium" to "high" as of October 22, 2025. The total breeding stock update from January to September 2025 was 906,200 sets, a year-on-year decrease of 21.78% [12][13] - The yellow chicken segment is expected to see supply contraction, with demand being the core variable. As of September 21, 2025, the breeding stock was at 13.7 million sets, with a week-on-week decrease of 0.5% but a year-on-year increase of 5% [14] - The egg-laying chicken segment is seeing record profits for leading companies, with a significant reduction in domestic breeding imports due to avian influenza, leading to a tightening supply outlook [15] Summary by Sections Poultry Sector - Focus on white chicken fundamentals and changes in breeding imports. The ongoing avian influenza season necessitates attention to overseas breeding imports, particularly from France, which has seen a significant drop in breeding stock updates [12][13] - Yellow chicken supply may contract, with prices sensitive to demand changes. The average price for yellow chickens is expected to improve in the second half of the year compared to the first half [14] - Leading egg-laying companies are achieving historical profit highs, with a focus on companies like Xiaoming Co. due to their market share and bargaining power [15] Swine Sector - The swine industry continues to face losses, with a slight rebound in pig prices and stabilization in piglet prices. The average price of pigs was 11.95 yuan/kg, up 5.7% from the previous week [16][17] - There is a focus on the potential for capacity reduction in the swine sector, with leading companies like Muyuan Foods and Wen's Group being highlighted for their profitability [17] Cattle Sector - The dairy and beef cattle industries are undergoing significant capacity reduction, with a notable 8% decrease in dairy cow stock. The price for beef cattle is expected to see a turning point, with companies that utilize a "dairy-meat linkage" model being particularly well-positioned [18] Pet Sector - The domestic pet brand market is rapidly growing, with a focus on companies like Guibao Pet and Zhongchong Co. The export of pet food is also on the rise, with a year-on-year increase of 7.56% in volume [19][20][21] Seed Industry - The seed industry is poised for a turnaround, with a focus on biotechnology and genetically modified crops. Leading companies in the seed sector are expected to enhance their competitive edge [22] Feed and Animal Health Sectors - The feed sector is recommended for companies like Haida Group, which is expected to benefit from market share gains. The animal health sector is also highlighted for its potential to break through homogenized competition with innovative products [23][24]