Behind the 11.9 yuan cost and sufficient fund reserve: How does DEKON AGR (02419) reconstruct industry valuation anchor with "light assets + full industry chain"?

Against the background of experiencing a "super long pig cycle" in the pig industry, the market's core evaluation dimension for breeding enterprises is shifting from "slaughter scale" to "operational quality". DEKON AGR (02419) has delivered impressive performance in crossing the cycle. The total operating income for the full year of 2025 was 23.159 billion yuan, an increase of 3.1% against the trend. The sales volume of live pigs was 10.8279 million heads, a year-on-year increase of 23.3%. Moreover, with a single-month total cost of about 11.9 yuan/kg at the end of 2025 and a per head profit of 160-180 yuan, DEKON AGR firmly ranks among the top tier in the industry, holding nearly one hundred billion yuan in monetary funds and bank credit with only 0.88 billion yuan in low capital expenditure, outlining a stable picture of "increasing efficiency, reducing costs, light assets, and risk resistance". This achievement is not accidental, but the result of the systematic advantages that DEKON has long cultivated. From investing billions in breeding and the technological accumulation of the "DeYuyun" intelligent platform, to the lean production capability of PSY exceeding 27 heads, and leading in the industry with the capacity for porcine circovirus type 2 (PCV2) purification DEKON has built a cost moat through "breeding + management + disease purification" to cross the cycle. By combining the "Number 2 Farm" light asset model, transferring sows to family farms, continuously empowering farmers, training them to become skilled breeders who are proficient in technology, management, and operations, thereby creating sustainable and stable income, DEKON has become a model for empowering and leading farmers. DEKON is restructuring the efficiency and innovating the model to reshape the competitive logic of the pig industry. Behind the complete cost of 11.9 yuan/kg at the end of 2025 is the "triad" efficiency barrier that builds a profitable safety net at the bottom of the cycle. In the context of industry-wide pressure, DEKON AGR's full-year complete cost has decreased to about 12.32 yuan/kg, a year-on-year decrease of 9.74%. By the end of 2025, the complete cost had further decreased to 11.9 yuan/kg, with a per head profit and production efficiency ranking among the top tier in the industry. GMTEight believes that this cost advantage is not accidental but stems from the "triad" efficiency barrier that DEKON has constructed in breeding, management, and disease control. On the breeding side, the company relies on two national core breeding farms, investing tens of billions since 2011, with over 360,000 performance tests completed and 61,412 genome tests completed. The "DeYuyun" intelligent breeding platform launched in 2025 has improved genetic evaluation accuracy by 40% and reduced the inbreeding coefficient of ten thousand populations to milliseconds. These digital breakthroughs directly hard production-side improvements. On the management side, the company has promoted lean management, strengthened breeding management, improved manpower efficiency, and significantly reduced the total cost of weaned piglets and fattening pigs through the improvement of key indicators such as PSY and MSY. Currently, the company's PSY has stabilized at above 27 heads, ranking in the top tier of the industry. On the disease control side, DEKON's PCV2 purification capacity is leading in the industry. During the reporting period, the company's core breeding farms and boar stations all achieved PCV2 purification, with the number of disease purification sites leading the industry. All core and expansion sites have achieved pseudorabies and swine fever disease purification. By purifying the sources of infection and cutting off transmission pathways, the health level of pig herds has significantly improved, disease losses have decreased significantly, and a safety line has been established to improve breeding efficiency and cost optimization. It is the triad efficiency system of "breeding + management + disease purification" that supports DEKON in maintaining a stable profit margin at the bottom of the industry cycle, becoming the core "ballast stone" for the company to cross the cycle. The light asset model verifies the risk resistance resilience and dual value of leading and helping farmers. If cost advantage is the "hard power" that DEKON relies on to cross the cycle, then the company's light asset model is the "soft power" architecture that helps it withstand cycle fluctuations. Currently, the effectiveness of this model has been fully verified through data. In 2025, the complete cost of the Number 2 Farm was lower than that of the company's own breeding, with excellent individual farms exceeding 30 PSY; the average annual income of the main settlement subject in 2025 for the cooperative farmers in the Number 2 Farm increased significantly, highlighting the role of leading and helping farmers. The scale effect of this model is also continuing to grow. In the Yibin "Hundred Villages, One Million Pigs" project, DEKON has built a new integrated development pattern of "government coordination, enterprise leadership, farmer participation, bank support, and insurance guarantee". The company's 50 million yuan investment in the construction of a pig farming technology training center was officially launched in December 2025, inviting European experts to provide technical training for farmers, with the ability to train 300 qualified new farm owners each year. From a financial perspective, DEKON's light asset operation has led to a gradual reduction in capital expenditure, with only 8.8 billion yuan in capital expenditure in 2025 (excluding biological assets); the outsourcing fees for farmers have a significant advantage compared to similar models in the industry, and the company is actively exploring upgrading the traditional linear outsourcing relationship to a multi-dimensional value symbiosis. In this new paradigm, the "A-class company + A-class partner" positive cycle ensures that technological advantages can truly be realized, becoming an important factor in DEKON's industry chain profitability consistently outperforming the industry. Slaughter volume increased by 93% + Poultry sector reversed losses in the fourth quarter: All segments of the industrial chain collaborating to move towards a turning point in profitability. While building a solid cost advantage in the core pig industry, DEKON AGR's full industrial chain layout is accelerating the release of synergistic value. The feed sector and poultry sector showed strong improvement in 2025, with diversified businesses transitioning from the "strategic investment period" to the "profit contribution period". In 2025, the slaughtering volume of DEKON reached 844,000 heads, a year-on-year increase of 93%, driving the revenue of the feed sector to increase by 55.25% to 1.422 billion yuan. Behind this rapid growth is the successful implementation of the company's operation strategy of "production based on sales, driven by orders". At the same time, the company has fully implemented lean management, meticulously controlling production costs, labor efficiency, and energy consumption, achieving significant reductions in losses in the sector and moving towards a balance of profits and losses. Meanwhile, the poultry sector's annual revenue reached 2.93 billion yuan, showing a good trend of "improvement per quarter," achieving profitability in the fourth quarter, significantly narrowing the loss for the whole year, and strengthening operational resilience. With the company's continuous promotion of the complete industrial chain loop of "pig breeding - slaughtering - deep processing", coupled with the full operation of the 60,000-ton food deep processing production line in Yibin, the company will optimize the product matrix including "Dizin" and "Dawei", increase the proportion of high-margin deep processed products, and further leverage the strategic value of the entire industrial chain as a regulator. In conclusion: From "scale dividend" to "efficiency dividend" reshaping the long-term value of the pig industry. DEKON AGR's annual performance in 2025 is not just a numerical report but a commercial textbook on "how to build anti-fragility capability at the bottom of the cycle." Looking back on the entire text, DEKON's ability to maintain the extreme cost of 11.9 yuan/kg and close to one hundred billion yuan in monetary funds and bank credit reserves in a general loss-making market environment is due to its strategic determination to "grow on two legs": one leg is internal growth, refining "pig genetics" and "human efficiency" to the extreme through tens of billions in breeding investment and digital technology, constructing an insurmountable cost moat; the other leg is external connection, through the DEKON light asset model, binding the interests of the company with farmers deeply, achieving a win-win situation between business efficiency and social value. Looking ahead to 2026, in the pig sector, the company plans to control the complete cost within 11.6 yuan/kg without considering fluctuations in raw material prices. In the poultry and feed sectors, the company will continue to focus on "optimal structure, strong breeding, cost reduction, and quality improvement," adhere to low-cost, high-efficiency breakthroughs and high-quality value-added strategies. As DEKON AGR achieves even lower complete pig breeding costs, and the poultry and auxiliary product sectors transition from "strategic investment" to "profit contribution," DEKON AGR is completing its evolution from a single breeding giant to a full industrial chain food group. A true strong player is not one who earns a fortune at the peak of the cycle but one who still holds the cards at the bottom of the cycle. DEKON proves through action: in a market full of uncertainty, only by transforming long-termism into certainty of efficiency advantage can one navigate through the cycle fog and welcome the spring of value creation.