Western: Pig prices continue to be sluggish, it is recommended to seize the opportunity to layout the pig farming sector.

Western released a research report stating that the number of pigs slaughtered by listed pig companies in November 25 years was 18.2581 million, an increase of +26.67% year-on-year and a decrease of -2.96% month-on-month. From January to November, the cumulative number of slaughtered pigs by listed pig companies has remained stable at around 20%, indicating that the new production capacity added in the past 24 years has been converted into slaughter numbers, resulting in a relatively balanced output. It is recommended to seize the opportunity to layout the pig farming sector, focusing on pig companies with strong certainty of slaughter growth and stable operations. Recommended companies include Muyuan Foods (002714.SZ), Wens Foodstuff Group (300498.SZ), Tangrenshen Group (002567.SZ), Zhejiang Huatong Meat Products (002840.SZ), and Leshan Giantstar Farming & Husbandry Corporation (603477.SH). The main points of view by Western are as follows: The number of pigs slaughtered by listed pig companies in November 25 years was 18.2581 million, an increase of +26.67% year-on-year and a decrease of -2.96% month-on-month. Among the leading companies, Muyuan Foods/Wens Foodstuff Group/New Hope Liuhe slaughtered 6.602/4.353/1.5675 million pigs, a year-on-year increase of +11.80%/+49.71%/+24.44%, and a month-on-month decrease of -6.70%/+11.83%/-6.98%. The year-on-year increase and month-on-month decrease of the number of slaughtered pigs by listed pig companies in November may be due to factors such as capacity expansion and strong seasonal demand. The cumulative number of slaughtered pigs by listed pig companies from January to November was 176 million, an increase of +21.42% year-on-year. The steady growth rate of the number of slaughtered pigs by listed pig companies from January to November indicates a relatively balanced release of production capacity. Among the leading listed pig companies, Wens Foodstuff Group had a higher growth rate in the number of slaughtered pigs, while New Hope Liuhe had a lower growth rate. The operating income of listed pig companies in November 25 years was 22.556 billion yuan, a decrease of -17.03% year-on-year and -4.94% month-on-month. Among the leading companies, Muyuan Foods/Wens Foodstuff Group/New Hope Liuhe had sales revenue from pig sales in November of 9.39/5.199/1.812 billion yuan, a year-on-year decrease of -20.43%/-14.19%/-11.61%, and a month-on-month decrease of -9.11%/+2.99%/-5.53%. The year-on-year decrease in sales revenue from pig sales in November was due to a larger decrease in pig prices despite an increase in the number of slaughtered pigs year-on-year. The larger month-on-month decrease in revenue compared to the decrease in the number of slaughtered pigs was due to a slight increase in pig prices month-on-month, coupled with a decrease in the average weight of slaughtered pigs. The cumulative revenue of listed pig companies from January to November was 268.644 billion yuan, an increase of +2.09% year-on-year. Although the number of slaughtered pigs by listed pig companies increased significantly year-on-year, the decline in pig prices dragged down the revenue scale, leading to only a small increase year-on-year. The average selling price of live pigs by listed pig companies in November increased by +1.60% month-on-month, and decreased by -30.05% year-on-year. Among the leading companies, Muyuan Foods/Wens Foodstuff Group/New Hope Liuhe had average selling prices of 11.56/11.71/11.54 yuan per kilogram, an increase of +0.09%/+1.21%/+2.30% month-on-month, and a decrease of -28.73%/-29.92%/-30.02% year-on-year. The reason for the year-on-year decrease in the average selling price of live pigs in November was due to ample pig supply coupled with weaker demand during the peak season. Although the average selling price increased slightly month-on-month in November, it still remained at a low level, and it is expected to remain low until the Spring Festival. The average weight of pigs slaughtered by listed pig companies in November was 105.80 kilograms per head, a decrease of -0.35% month-on-month and -3.31% year-on-year. In terms of average weight, the average weight of pigs slaughtered by listed pig companies in November decreased both month-on-month and year-on-year. Listed pig companies actively reduced the average weight of slaughtered pigs in response to calls, leading to a decrease in weight both month-on-month and year-on-year in November. Among the leading companies, Muyuan Foods/Wens Foodstuff Group/New Hope Liuhe had average weights of 123.04/101.98/100.17 kilograms per head, a decrease of -2.67%/-9.01%/-0.73% month-on-month, and an increase of +5.55%/-18.21%/+1.49% year-on-year. The average weight of slaughtered pigs decreased month-on-month for the three major leading pig companies; Muyuan Foods and New Hope Liuhe saw a slight increase in average weight year-on-year, while Wens Foodstuff Group experienced a larger decrease. Risk Warning: The elimination of pig production capacity may not meet expectations, feed prices may rise more than expected, and there may be risks related to diseases.