Core Viewpoint - The company has become the largest pig slaughtering enterprise in China, surpassing its competitor, and has achieved a 100% utilization rate of its slaughtering capacity in the industry [1] Group 1: Company Performance - In the first nine months of 2025, the company slaughtered 19.16 million pigs, a year-on-year increase of 140%, with a capacity utilization rate of 88%. The third quarter saw a 100% utilization rate, resulting in a profit of over 30 million yuan for the quarter [3] - The company has improved its internal operations significantly this year, marking its first quarterly profit, indicating the effectiveness of its slaughtering business strategy and entering a new development phase [3] - The company plans to leverage the upcoming consumption peak before the Spring Festival to expand its customer base and sales channels, enhance product quality and service, and aim for a full-year turnaround to profitability [3] Group 2: Future Outlook - The company expects its slaughter volume to more than double compared to last year, with continued growth projected for 2026 [5] - In the third quarter, the company's slaughter volume increased by 27% compared to the second quarter, and the gross profit margin rose from 1.5% to 2.5% [5] - The company is focusing on its cutting products business, achieving an average daily cutting volume of around 30,000 pigs, with a cutting product proportion exceeding 30%, an increase of approximately 5 percentage points from the second quarter [5] Group 3: Industry Comparison - The company and its main competitor, have slaughtering capacities of approximately 29 million and 25 million pigs, respectively. The company's slaughter volumes for 2023 and 2024 are projected at 13.26 million and 12.52 million pigs, while the competitor's figures are 12.75 million and 10.28 million pigs [7] - The competitor reported a year-on-year increase of 26% in slaughter volume to 9.13 million pigs in the first three quarters, with a calculated capacity utilization rate of about 48% [7] - The competitor has no current plans for new factory construction but is exploring a light asset operation model for capacity expansion through collaboration with local enterprises [7]

Core Viewpoint - The pig farming profits are expected to decline after the recovery of production capacity in 2025, while slaughtering margins are showing signs of improvement, indicating a potential shift of profits from upstream to downstream in the pig industry chain [1][9]. Group 1: Pig Farming Profits - In 2025, the average profit for self-breeding pig farming is projected to be 196.64 yuan per head, a decrease of 58.98 yuan per head or 23.07% compared to 2024 [2]. - The average profit for piglet fattening is expected to be 166.18 yuan per head, down by 259.17 yuan per head or 60.93% year-on-year [2]. - The average income from pig farming in 2025 is estimated at 1837.10 yuan per head, a decline of 187.90 yuan per head or 9.28% year-on-year [4]. Group 2: Slaughtering Margins - The average slaughtering margin for pigs in 2025 is projected to be 30.55 yuan per head, an increase of 24.88 yuan per head compared to the previous year [6]. - The daily average slaughter volume for sample enterprises has increased by 8.14% year-on-year, contributing to the improvement in slaughtering margins [8]. - The average cost per head for slaughtering has decreased due to increased slaughter volume, leading to a rise in margins from a low of 12.45 yuan per head in early July to 24.85 yuan per head in mid-August [6][8]. Group 3: Future Outlook - The pig farming profits are expected to experience a decline followed by a rebound in the latter part of the year, while slaughtering margins are likely to steadily increase [9][10]. - The market for pig farming may remain low in August and September, but demand for heavier pigs is anticipated to rise in the fourth quarter, potentially supporting prices [9]. - Slaughtering margins are expected to increase primarily from September to December, with a peak during the traditional curing season in December [10].

Core Insights - The performance of companies in the pig industry chain has shown significant differentiation in their 2024 annual reports, with pig farming companies generally experiencing growth while meat processing companies faced declines [2][4]. Summary by Category Pig Farming Companies - Leading pig farming company Muyuan Foods (牧原股份) reported a revenue of 137.947 billion yuan in 2024, a year-on-year increase of 24.43%, and a net profit of 17.881 billion yuan, marking a return to profitability [2]. - Wens Foodstuff Group (温氏股份) achieved a revenue of 104.863 billion yuan, up 16.64% year-on-year, with a net profit of 9.23 billion yuan, also returning to profitability [2]. - Juxing Agriculture (巨星农牧) reported a revenue of 6.078 billion yuan, a 50.43% increase, and a net profit of 519 million yuan, indicating a return to profitability [3]. - The overall increase in pig farming companies' performance is attributed to a rise in average pig prices in 2024, which remained above the industry cost line, leading to a profit of 214 yuan per pig, an increase of 290 yuan compared to 2023 [3]. Meat Processing Companies - Shuanghui Development (双汇发展) reported a revenue of 59.561 billion yuan, a decrease of 0.55%, and a net profit of 4.989 billion yuan, down 1.26%, impacted by lower sales of packaged meat and fresh pork products [4]. - Bright Food Group (光明肉业) disclosed a revenue of 21.987 billion yuan, a decline of 1.7%, with a net profit of 216 million yuan, down 4.22%, affected by challenges in its core meat business [4]. Market Trends - As of 2025, pig prices have entered a period of relative low, which may impact the operational performance and financial results of companies in the industry [5]. - Data from the Ministry of Agriculture indicates that as of April 23, 2025, the market price of live pigs was 14.96 yuan per kilogram, lower than the end of 2024 price of 15.98 yuan per kilogram, reflecting a significant decline from the peak prices in August 2024 [6].

1. Report Industry Investment Rating No relevant information provided. 2. Core Viewpoints of the Report - Short - term prices will fluctuate at a low level, and there is a possibility of new lows in the medium - to - long - term [1]. - Pig prices are unlikely to rise significantly due to abundant supply in the first half of 2025, but short - term sharp declines are also unlikely as there may be secondary fattening when prices approach 14 yuan/kg. The 2505 contract price is in a relatively reasonable range, and it is recommended to wait and see for now [1]. 3. Summary by Relevant Catalogs 3.1 Futures End 3.1.1 Main Contract Basis - In the context of weakening spot prices and a pessimistic market outlook for April pig prices, the price of the LH2505 contract fluctuated downward this week [2]. - On March 28, 2025, the benchmark ground (Henan) had a base price of 14.53 yuan/kg, and the main contract basis was 1305 yuan/ton [3]. 3.1.2 Price Changes of Each Contract - Far - month contracts continued to fluctuate widely [5]. 3.1.3 Inter - monthly Spread Changes - Affected by the weakening of spot prices, the reverse spread trend of the 5 - 7 and 5 - 9 contracts was obvious in the latter part of the week [7][10]. 3.2 Spot End 3.2.1 Pig Prices and Slaughter Volumes - This week, the slaughter volume began to decline, and pig prices fell in the latter part of the week [13]. 3.2.2 Regional Spreads - The spreads among selected regions were within a relatively reasonable range [15]. 3.2.3 Fat - Standard Price Spreads - The fat - standard price spread continued to decline, which would stimulate farmers to slow down weight gain or even reduce weight [17]. 3.2.4 Fresh Sales and Gross - to - Net Price Spreads - Terminal consumption was relatively stable year - on - year [19]. 3.2.5 Related Product Price Ratios and Fresh - Frozen Spreads - Beef prices have risen recently, increasing the cost - effectiveness of pork [21]. 3.2.6 Breeding Profits - Self - breeding and self - fattening remained profitable, while purchased piglet fattening was slightly profitable [23]. 3.2.7 Slaughter Weights - The slaughter weight continued to increase this week, but the growth rate slowed down [25]. 3.3 Capacity End 3.3.1 Reproductive Sow Inventory - In January, the national reproductive sow inventory was 40.62 million heads, a year - on - year decrease of 0.1%. In February, the reproductive sow inventory in relevant samples continued to increase [27]. 3.3.2 Sow Culling Situation - The price of culled sows remained stable this week, and the slaughter volume of culled sows increased slightly month - on - month in February [30]. 3.3.3 Sow Production Efficiency and Newborn Healthy Piglet Numbers - In February, the number of newborn healthy piglets was basically stable month - on - month, corresponding to an increase in the number of slaughtered pigs in July and stable numbers in August [32]. 3.3.4 Sow and Piglet Replenishment Enthusiasm - The price of 15 - kg piglets continued to rise this week due to increased enthusiasm among farmers for replenishment as the weather warmed up. The price of 50 - kg binary sows remained stable [34]. 3.4 Slaughter End - The slaughter volume increased month - on - month. In January, the slaughter volume of designated enterprises was 38.16 million heads, a month - on - month decrease of 8.3% and a year - on - year increase of 2.4%. Some slaughterhouses carried out segmentation and warehousing operations, which supported pig prices [36]. 3.5 Import End - In February 2025, the pork import volume was about 80,000 tons, a decrease of 20,000 tons from the previous month. The current scale of pork imports has a limited impact on domestic pig prices [39].