养殖：平静水面，涟漪渐起

Summary of the Conference Call on the Livestock Industry Industry Overview - The average price of pork has dropped to approximately 14 RMB per kilogram, leading to a narrowing of industry profits. If pork prices continue to decline, the industry may face reduced profitability and a shift in investment logic towards a left-side approach [1][2]. Supply Side Insights - The theoretical output volume in the first half of the year has seen a slight year-on-year decrease. However, there has been a weight accumulation phenomenon in the industry from the Spring Festival to before the Dragon Boat Festival, with weights increasing to 129-130 kg [1][3][4]. - The data from Yongxin and Muyuan indicates that the weight of pigs has increased from 121-122 kg before the Spring Festival to 129 kg before the Dragon Boat Festival. This weight accumulation phase is expected to lead to a decline in piglet prices in the third to fourth quarters of 2025, potentially resulting in reduced profitability for breeding farms [3][10]. - The current valuation of the livestock sector is low, with continuous fundamental catalysts. Companies with significant cost advantages, such as Muyuan, Wens, and Shennong Group, are recommended for investment due to their potential in the current market environment [3][11]. Demand Side Insights - There has been a slight increase in slaughter volume, attributed to improved social demand and state inventory management. However, the extent of inventory support has been limited [5]. - The utilization rate of secondary fattening has increased from low levels before the Spring Festival to approximately 50-60% in April and May, absorbing a significant amount of supply during this period [5]. Key Factors Affecting the Market - The primary factor disrupting the market's calm is the weight of the pigs. From February to May, weight increases led to a throttling of supply, keeping market prices relatively stable. Currently, a weight reduction phase has begun, with an acceleration in outflow and a decrease in incoming rates [6][7]. - As of late May, some large groups have suspended their secondary fattening sales plans as a means of weight reduction. This indicates a net outflow process within the industry [7]. Price Dynamics - As of June 11, the price difference between fat pigs and standard pigs has narrowed in some provinces, indicating a weakening demand for fat pigs in regions with high demand. This trend suggests a shift towards reducing weight before prices [9]. - The price of piglets is expected to continue declining in the third to fourth quarters of 2025, with current prices already decreasing from their peak. This trend may lead to a situation where breeding farms enter a non-profitable phase [10]. Investment Logic - The livestock sector is currently undervalued, with ongoing fundamental catalysts. The focus should be on companies with strong positions, as these will enhance marginal catalysts during the supply release process. The sector is deemed worthy of attention, particularly companies like Muyuan, Wens, and Shennong Group, which have clear cost advantages [11].