Investment advice: Maintain an increase in holdings rating. As pig prices continue to be low in 2023, we lowered the company's 2023 EPS to 0.14 yuan (previous value was 0.40 yuan), and the 2024/2025 EPS is expected to be 0.31/0.42 yuan respectively. The current stock price is 6X corresponding to 2024 PE, maintaining an increase in holdings rating.

The company's aquaculture listing in October 2023 is in line with expectations. The company's monthly changes in the number of pigs released since 2023 and the average sales price of commercial pigs have shown volatility, but the overall trend is increasing. The number of pigs released in October was 382,000, an increase of 13.37% over the previous year, the cumulative number of pigs released in January-October reached 4,026 million heads, an increase of 19.86% over the previous year, and the average sales price of commercial pigs in October was 15.11 yuan/kg.

The breeding system has been fully upgraded, and production capacity is sufficient, which is expected to deliver results. At present, the company's breeding system has been fully upgraded, gradually increasing the proportion of high-performance pig breeding. As of mid-2023, the company will be able to breed and reserve 326,000 pigs, providing a guarantee for subsequent release. At the same time, in the face of a sluggish market, the company continues to optimize feed formulations, continuously optimize management, strengthen field range benchmarking, and narrow the internal breeding performance gap. The cost aspect has been further reduced. It is estimated that the full cost of the company's farming is expected to be less than 16 yuan/kg.

The company's brand fresh pork business continues to increase in revenue, and brand building has achieved remarkable results. In October, the company sold 17,200 tons of fresh pork, an increase of -9.95% over the previous month. Brand revenue in the fresh pork business accounted for 27.81%, 0.5 pct over the previous month. The company continues to promote brand building in the fresh pork business. With the commissioning of two slaughtering and processing bases in Jilin and Inner Mongolia, the upstream and downstream compatibility between North China and Northeast China has increased dramatically. The company's fresh pork internal procurement ratio continues to increase. The commissioning of the Guangdong division center has accelerated the company's local market response speed, and the South China regional business is also expanding rapidly.

Risk warning: Market demand reduction risk, raw material price increase risk, risk of falling short of expectations, risk of swine disease, etc.