Core Viewpoint - He Feng Co., Ltd. is facing significant financial challenges despite recent revenue growth, with increasing debt levels and declining asset quality due to market pressures in the livestock and feed sectors [1][2][3][4][6][7]. Group 1: Shareholder Actions - The controlling shareholder's action person, Wang Fengjiu, reduced holdings by 6 million shares, decreasing the combined shareholding of the controlling shareholder and action persons from 32.40% to 31.74% [1]. - According to the reduction plan, Wang Fengjiu and Shao Caimei plan to reduce a total of 2.19% of shares, with potential further reductions of 1.53% [2]. Group 2: Financial Performance - In the first half of 2024, He Feng Co., Ltd. reported a revenue increase of 16.27% to 17.407 billion yuan, with a net profit of 233 million yuan, marking a return to profitability [2][6]. - However, the company’s asset-liability ratio increased by 6.81 percentage points year-on-year to 56.38%, with short-term interest-bearing liabilities rising by 116% to 2.505 billion yuan and long-term interest-bearing liabilities increasing by 17.73% to 3.512 billion yuan [2][4]. Group 3: Operational Challenges - The company experienced a net cash outflow of 512 million yuan from operating activities in the first half of 2024, primarily due to increased payments for goods and services [4]. - He Feng Co., Ltd. has seen significant growth in accounts receivable (1.275 billion yuan, up 42.75%), inventory (4.414 billion yuan, up 57.14%), and accounts payable (2.382 billion yuan, up 46.17%) [3]. Group 4: Market Conditions - The livestock and feed sectors are under pressure due to low prices for pork and poultry, with the price of white feather chickens dropping to historical lows [6][7]. - The white feather chicken industry is facing overcapacity, with slaughtering capacity utilization below 75%, leading to increased fixed cost pressures [7]. - The pig farming sector is also experiencing declining prices, with the price dropping from over 20 yuan per kilogram to around 13 yuan, putting further pressure on profitability [7]. Group 5: Strategic Moves - He Feng Co., Ltd. has been expanding aggressively, acquiring stakes in 13 companies for 354 million yuan, but many of these companies are currently unprofitable [3][6]. - The company’s feed business contributed 38% of revenue, while the meat poultry segment contributed 35%, indicating a reliance on these sectors for income [6].

Group 1: Swine Industry - In H1 2025, the swine industry experienced profitability, with a focus on capacity reduction in H2 [2] - The average price of pork in Q2 2025 was 14.55 yuan/kg, down 3.1% quarter-on-quarter and 11.2% year-on-year [2] - Major companies like DeKang Agriculture, Lihua Co., Shennong Group, and Wens Foodstuff reported net profits exceeding 200 yuan per head in H1 2025 [2] - The supply pressure in H2 remains, but initial results from weight reduction efforts and seasonal consumption may limit further price declines [2] Group 2: Poultry Industry - In H1 2025, the poultry industry faced low prices due to weak consumption and increased supply [3] - White feather chicken prices rebounded slightly in Q2 but still faced losses, while yellow chicken prices continued to decline [3] - The poultry industry is expected to see a price increase in H2 due to slight capacity reduction and seasonal demand [3] Group 3: Feed and Animal Health - The feed and animal health sectors are experiencing upward trends in H1 2025, driven by recovery in livestock and aquaculture stocks [4] - Sales, revenue, and profit growth accelerated in Q2 2025 [4] - Continued recovery in livestock stocks is anticipated, supporting recommendations for feed and animal health companies [4] Group 4: Seed Industry - The seed industry is facing significant pressure with a severe oversupply situation, leading to increased return rates [5] - Despite challenges, new leading companies are achieving substantial growth driven by successful products like Kangnong Yumi 8009 [5] Group 5: Pet Food Industry - The pet food sector is seeing a steady increase in brand market share, with exports expected to gradually recover [6] - Companies with Southeast Asia and global factory layouts are showing more stable growth [6] - Domestic demand remains resilient, with leading companies enhancing market share through supply chain advantages and brand strength [6] Group 6: Fruit Industry - The fruit industry is experiencing differentiation across various segments, with blueberries emerging as a new consumer favorite [7] - Companies are expanding production and improving efficiency, leading to steady growth [7] - The processing segment benefits from stable raw material prices and strong export demand, while retail faces challenges [7]

Investment Rating - The industry investment rating is "Positive" (maintained) with a key recommendation for the "platform + ecosystem" service-oriented enterprise Dekang Agriculture and Animal Husbandry [3] Core Viewpoints - The report emphasizes the ongoing transformation of the pig industry policy, highlighting the importance of high-quality development and the need for cost control and capacity management [4][5][17] - The report suggests that the industry is entering a high-quality development phase, with expectations for improved profit margins and a focus on technology-driven and service-oriented companies [17] - The report identifies potential investment opportunities in leading companies such as Muyuan Foods and Wens Foodstuffs, as well as Dekang Agriculture and Animal Husbandry [17] Summary by Sections 1.1 Pig Industry - Recent pig prices are at 13.72 CNY/kg (down 0.02 CNY/kg MoM), with average slaughter weight slightly decreasing to 127.8 kg (down 0.18 kg MoM) [4][16] - The Ministry of Agriculture and Rural Affairs emphasizes reducing breeding stock and controlling new capacity, with a focus on improving the entire industry chain's competitiveness [5][16] - The report anticipates further policy measures to stabilize pig prices and control production capacity, recommending Dekang Agriculture and Animal Husbandry as a key player [17] 1.2 Poultry - The report notes a persistent contradiction of "high capacity, weak consumption" in the white feather chicken industry, with a focus on improving return on equity (ROE) [18] - Key recommendations include focusing on leading companies in the integrated supply chain and those with strong breeding capabilities [18] 1.3 Feed - The report highlights positive price trends in aquatic products, with significant year-on-year increases in various fish species [20] - It recommends Haida Group due to its improved management effectiveness and capacity utilization, expecting it to exceed growth expectations [20] 1.4 Pet Industry - Online sales growth in the pet industry has slightly slowed, with notable performance from brands like Guibao and Zhongchong [21][22] - The report suggests that long-term impacts from tariff uncertainties are limited, with leading companies expected to maintain high growth rates [22] 1.5 Agricultural Products - The report discusses uncertainties in soybean imports and the rising prices of natural rubber, with a focus on macroeconomic conditions affecting the agricultural sector [23] 2. Market and Price Situation - The report notes that the agricultural index rose by 2.52% during the week, with the pet food sector performing the best at +5.41% [24]

Core Insights - The report suggests focusing on agricultural investment opportunities driven by price increases in key products such as beef and grains, policy reforms in the supply side, and recovery in downstream demand [5] - The beef industry is expected to see a price upturn after a period of losses, with a projected industry capacity reduction exceeding 10% [5][12] - The pig farming sector is anticipated to experience a slight decline in supply in 2025, with a focus on high-quality leading enterprises due to supply-side policies [5][45] - Poultry farming is facing supply disruptions, but demand recovery is expected to improve the market [5][87] Livestock Industry - Global beef prices have started to rise again after two years of decline, with May prices reaching $6.62 per kg, a 13% year-on-year increase [12] - China's beef consumption is projected to grow, with a total consumption of 11.52 million tons in 2024, up 3.84% year-on-year [22] - The domestic beef supply is expected to decline significantly due to a drop in cattle inventory, with a forecasted reduction of over 10% [22][24] Dairy Industry - China's raw milk prices have been declining since mid-2021, with the average price at 3.04 yuan per kg as of June 13, 2024, down 7.88% year-on-year [33] - The dairy industry is experiencing a significant capacity reduction, with over 90% of the industry facing losses [33] - A potential recovery in milk prices is anticipated in the second half of 2025 as supply-side capacity continues to decrease [38] Pig Farming - The pig supply is expected to increase slightly in 2025, with a projected output of 703 million pigs in 2024, down 3.3% year-on-year [45] - The average price of pigs is forecasted to be around 14.5 yuan per kg for the year, reflecting a decrease in supply pressure [45][54] - The industry is experiencing a recovery in profitability, with average profits for self-breeding and self-raising operations improving significantly [54][67] Poultry Farming - The yellow-feathered chicken market is stabilizing, with a projected output of 3.34 billion birds in 2024, down 7.18% year-on-year [92] - The white-feathered chicken supply remains ample, with prices stable as the market awaits demand recovery [98] - Long-term demand for white-feathered chicken is expected to rise, supported by improved efficiency and domestic breed replacement [102] Feed and Grain - The total feed volume is expected to increase due to rising pig inventories and improved profitability in livestock farming [107] - Grain prices are projected to recover from recent lows, influenced by external factors such as weather and international relations [117] - The report emphasizes the importance of grain security and the potential impact of trade relations on domestic agricultural costs [117]

Group 1: Pig Farming - The pig farming sector is expected to achieve profitability in 2024/25 Q1, with a focus on waiting for a capacity inflection point in 2025 [2] - The average profit per head in the industry is projected to be 170/86 RMB in 2024/25 Q1, with leading companies exceeding 200 RMB per head in 2024 [2][3] - Despite profitability, the current capacity expansion is primarily led by low-cost listed companies, with expectations of steady increases in pig output and a forecasted average price range of 14-15 RMB per kilogram for the year [2][3] Group 2: Poultry Farming - The white feather chicken industry is experiencing high inventory levels, with chick prices increasing by 6-7% year-on-year, while broiler prices are expected to decline by 10-15% due to weak demand [3] - The yellow chicken sector is projected to see a slight decrease in output, with a year-on-year decline of 3.1%, but leading companies are improving profitability through cost reduction [3] - The overall supply of white and yellow chickens is expected to remain ample in 2025, with a focus on observing demand recovery and the impact of avian influenza [3] Group 3: Feed and Veterinary Industry - The feed and veterinary sectors are facing increased competition and declining profitability due to reduced downstream inventory and weak consumption in 2024 [4] - However, profitability in the aquaculture feed sector is expected to improve in the second half of 2024, with significant growth in pig feed profitability anticipated in 2025 Q1 [4] - The veterinary sector is also expected to see continued recovery in 2025, particularly in raw materials [4] Group 4: Pet Industry - The pet sector is experiencing robust growth driven by stable overseas orders, declining chicken costs, and the depreciation of the RMB, with domestic brands gaining market share [5] - The performance of the pet sector is expected to reach new highs in 2024/25 Q1, with continued growth anticipated in 2025 due to strong demand resilience and ongoing domestic brand replacement [5] - The pet economy is viewed as a scarce track with strong demand, and leading companies are expected to enhance market share through product innovation and brand development [5]

Core Viewpoint - The 2024 Annual General Meeting of He Feng Food Co., Ltd. will discuss various proposals, including the execution of related party transactions and the company's financial performance, highlighting a significant profit increase and strategic governance improvements [1][4][13]. Group 1: Company Performance - The company achieved a net profit of 342 million yuan in 2024, a year-on-year increase of 174.93%, marking a turnaround from a loss [4][13]. - The total revenue for 2024 was 32.55 billion yuan, a decrease of 9.52% compared to the previous year [13][14]. - The company's total assets at the end of the reporting period were 14.88 billion yuan, a slight decrease of 0.37% from the previous year [13][14]. Group 2: Governance and Management - The board of directors has been recognized for its effective governance, receiving an A-level rating for information disclosure for seven consecutive years [5]. - The company completed a board restructuring and appointed a new management team, enhancing governance and operational efficiency [5][9]. - The company executed two rounds of share repurchase plans, spending 287 million yuan to buy back 39.99 million shares, reflecting management's confidence in the company's value [5][9]. Group 3: Related Party Transactions - The company reported that its related party transactions in 2024 were necessary for normal operations, with pricing based on market rates, ensuring compliance with legal and regulatory standards [17][18]. - The total expected amount for related party transactions in 2025 is projected to be 159.4 million yuan, with various categories of transactions detailed [17][18]. Group 4: Future Outlook - The company aims to strengthen its feed business, enhance the meat poultry industry, and improve cash flow and risk management in the coming years [9][12].

Group 1: Corporate Changes - He Feng Food Co., Ltd. has completed the business registration change and obtained a new business license from the Shenyang Market Supervision Administration [1] - The company held board meetings on February 25, 2025, and a temporary shareholders' meeting on March 13, 2025, to approve amendments to the Articles of Association [1] Group 2: Acquisition Progress - The company is in the process of acquiring partial equity in several poultry-related companies, with a total base consideration of RMB 353.983 million [4] - As of the announcement date, the company has paid a total of RMB 304.9945 million for the equity transfer, with ongoing delivery work proceeding in an orderly manner [5] Group 3: Share Buyback - The company approved a share buyback plan on October 28, 2024, with a total buyback amount not exceeding RMB 200 million and a price cap of RMB 10.90 per share [10] - As of April 30, 2025, the company has repurchased a total of 15.256464 million shares, accounting for 1.67% of the total share capital, with a total expenditure of RMB 128.217 million [11]