HK Stock Market Move | DEKON AGR (02419) rose more than 6%, the Ministry of Agriculture and Rural Affairs called for enhanced comprehensive regulation of pig production capacity.

DEKON AGR(02419) rose by over 6% in early trading, as of the time of publication, it has increased by 5.68%, reaching 77.15 Hong Kong dollars, with a turnover of 3426.36 million Hong Kong dollars. On the news front, Minister of Agriculture and Rural Affairs Han Jun presided over the executive meeting of the Ministry on November 21, reviewing and giving preliminary approval to the "Opinions on Strengthening Comprehensive Capacity Regulation to Promote High-Quality Development of the Pig Industry." The meeting emphasized the need to strengthen comprehensive capacity regulation of the pig industry, accelerate the establishment of a pattern of high-quality development of the pig industry with dynamic supply and demand adaptation, reasonable scale structure, and coordinated improvement of the industry chain. HuaYuan Securities previously pointed out that the determination to maintain stable pig prices through policy is firm, and the industry's efforts to regulate capacity may continue to intensify. There is significant variance in industry operations, and companies with cost leadership and integrating agriculture may enjoy excess profits and valuation premiums. Changjiang believes that DEKON AGR's breeding business is rooted in the southwestern region, with a significant cost advantage in breeding. The per capita profitability is at the top level among listed pig enterprises, and the company's profitability under the light asset model has transitioned from catching up to surpassing. The bank believes that under the background of industry capacity control, the profit center of high-quality pig enterprises may rise in the medium to long term, and is optimistic about DEKON's high-quality pig development model that assists and benefits farmers, and specifically recommends it.