Introduction to this report:

Product development and channel promotion efforts have been strengthened, and the company's brand influence continues to increase. The company's listing volume is expected to increase in 2025, and profits will strengthen as the industry continues to boom.

Key points of investment:

Investment advice: Maintain an increase in holdings rating. The company released 2.802 million units from January to October 2024 and 4.026 million in January-October 2023. As a result, the 2024-2025 EPS forecast was lowered, and the 2024-2025 EPS forecast was lowered to 0.15/0.17 yuan (previous value: 0.31/0.42 yuan), and the 2026 EPS is expected to be 0.11 yuan. The current stock price is 8.41XPE corresponding to the 2025 EPS, maintaining an increase in holdings rating.

Incident: The company released 0.321 million pigs in October, with an average sales price of 17.45 yuan/kg. From January to October, the company sold 2.802 million pigs.

Product development and channel promotion efforts have been strengthened, and the influence of the “Jiajiakang” brand has expanded. Fresh pork sold 0.022 million tons in October, accounting for 32.38% of brand revenue, and the share of brand revenue was significantly higher than in 2023. Looking at the first half of 2024, flaxseed pork sales increased by more than 100% year over year. In terms of product diversification, various convenient new products such as dumplings, meat dumplings, and meat buns; in terms of channels, we focus on sports marketing, sponsor multiple marathons to strengthen Jiajiakang's sports genes, and carry out various activities, such as base visits and community activities, to increase the popularity of the safe and healthy quality of flaxseed pork among consumers.

The pig breeding industry is slowly increasing production, and the company's profit is expected to remain strong in 2025. Judging from the official data for October, the growth rate of the energy storage column is still slow. Judging from third-party data, October was also in a trend of slowing down. Since the second quarter of 2024, farmers have not had enough motivation to supplement production capacity, their confidence in the 2025 price is weak, and the number of sows that can be raised in the industry is still declining year on year. Therefore, we believe that pig prices will be relatively good in 2025, and the company's pig breeding profits are still strong.

Risk warning: risk of raw material price fluctuations, risk of falling short of expectations, risk of breeding pig disease, etc.