Guolian: The prosperity of pig farming is increasing, and the prosperity of pet and feed companies is on the rise.

Guolian released a research report stating that the prosperity of pig farming has improved, and there are investment opportunities in the upward trend of pet and feed companies. Among them, the revenue of the pig farming sector in 2024Q3 has increased compared to the previous quarter, with high industry profits, and pig farming in the fourth quarter may still be profitable; the domestic and foreign businesses of pet food companies in 2024Q1-Q3 are performing well, with the industry in a rapid development stage and still having broad development space in China, focusing on excellent domestic independent brands; the overall revenue of feed companies in 2024Q1-Q3 has been declining, with mixed performance, but the inventory of aquatic products is expected to gradually recover, thus improving the demand for aquatic feed. Guolian's main views are as follows: Farming: The prosperity of pig farming has improved, with high industry profits in 24Q3 The revenue of the pig farming sector in 2024Q3 has increased compared to the previous quarter. In the third quarter of 2024, 15 listed pig companies achieved a revenue of 126.516 billion yuan, a year-on-year increase of 3.20% and a quarter-on-quarter increase of 18.01%; among them, Dongrui Food Group, Leshan Giantstar Farming & Husbandry Corporation, and Jiangxi Zhengbang Technology have the highest year-on-year revenue growth rates, at 71.36%, 66.89%, and 60.08% respectively. In the first three quarters of 2024, the total revenue of 15 listed pig companies reached 328.357 billion yuan, a year-on-year decrease of 5.66%; Yunnan Shennong Agricultural Industry Group had the highest year-on-year revenue growth rate, reaching 42.11%. In the third quarter of 2024, the 15 listed pig companies achieved a net profit of 18.841 billion yuan, with a significant quarter-on-quarter growth; among them, Muyuan Foods and Wens Foodstuff Group have the highest net profits, at 9.652 billion yuan and 5.081 billion yuan respectively, with only ST Aonong continuing to incur losses. In the first three quarters of 2024, the total net profit of the 15 listed pig companies reached 20.032 billion yuan, a year-on-year increase of 159.71%. Pets: Domestic and foreign businesses are doing well, with outstanding performance The total revenue of pet food companies (including Gambol Pet Group, Yantai China Pet Foods, Petpal Pet Nutrition Technology) in 2024Q1-Q3 was 8.183 billion yuan, a year-on-year increase of 21.39%. Looking at the subsidiaries, Gambol Pet Group achieved a year-on-year revenue growth of 17.96% in 2024Q1-Q3, Yantai China Pet Foods achieved a year-on-year revenue growth of 17.56%, and Petpal Pet Nutrition Technology achieved a year-on-year revenue growth of 44.34%. The total net profit of pet food companies in 2024Q1-Q3 was 907 million yuan, a year-on-year increase of 96.38%. Gambol Pet Group's domestic and foreign businesses achieved steady growth, combined with product structure improvements, driving profit growth; Yantai China Pet Foods continued to focus on its main business and expand overseas new customer acquisition, as well as investment income, driving profit growth; Petpal Pet Nutrition Technology's profit growth benefited from sufficient overseas orders and a reduction in losses in domestic independent brand businesses. Feed: Overall revenue decline for major feed companies, with mixed performance The total revenue of feed companies (including Guangdong Haid Group, Guangdong Yuehai Feeds Group, Wellhope Foods, Shandong Teamgene Technology) in 2024Q1-Q3 was 114.95 billion yuan, a year-on-year decrease of 4.44%. Shandong Teamgene Technology achieved a year-on-year revenue growth of 41.22% in 2024Q1-Q3, mainly due to a significant increase in feed sales; Guangdong Haid Group, Guangdong Yuehai Feeds Group, and Wellhope Foods all experienced a year-on-year decline in revenue. The total net profit of major feed companies in 2024Q1-Q3 was 3.888 billion yuan, a year-on-year increase of 65.90%. Guangdong Haid Group benefited from increased feed sales and profit release from pig farming, with significant performance growth; Guangdong Yuehai Feeds Group's profit declined due to a decrease in product sales and impairment of credit; Wellhope Foods' performance growth was due to significant improvements in feed, broiler, and pig business in the third quarter; Shandong Teamgene Technology's profit declined year-on-year due to adjustments in product structure. Investment recommendations: Seize the investment opportunities in the upward trend of pet and feed companies. Consumer growth sector: Aquatic chain: Guangdong Haid Group (002311.SZ) is a key recommendation. Pets: Key recommendations include Gambol Pet Group (301498.SZ), Yantai China Pet Foods (002891.SZ), and Tianjin Ringpu Bio-Technology (300119.SZ). Cyclical prosperity sector: Farming: Recommendation of Muyuan Foods (002714.SZ), Wens Foodstuff Group (300498.SZ), Jiangsu Lihua Animal Husbandry (300761.SZ), andEllhope Foods (603609.SH) and others.Risk Warning: Risks include the occurrence of animal diseases, long-term low prices for livestock and poultry, fluctuations in raw material prices, and exchange rate fluctuations.