Dehong Agriculture and Animal Husbandry (02419) rose nearly 8%, with a rise of 7.98% to HKD 55.45 at the time of publication, with a turnover of HKD 3.2403 million.
On the news, according to the Ministry of Agriculture and Rural Affairs, the average price of piglets in May was 38.70 yuan/kg, up 5.38% month-on-month and 6.04% year-on-year. In May, the listed hog farming industry had a year-on-year decrease in output. Fifteen listed companies in the hog farming industry had a total output of 12.57 million pigs in May, a decrease of 0.03% year-on-year. In addition, experts pointed out that in the second week of June, the average national pig price was 18.41 yuan/kg, an increase of 25.7% since early March. With the adjustment of pig production capacity and the rise in prices, the profitability of hog farmers has improved significantly and their enthusiasm for raising pigs has also increased.
Recently, Zhongjin issued a research report stating that the company has strong cost advantages and may contribute to excess return on equity. The bank calculated that the company's per capita net loss in 2023 was 181 yuan, with a lower loss rate than the industry average. In terms of high elasticity, the bank calculated that the company's sow inventory was 380,000 to 400,000 in April, and believes that it may support the company's goal of reaching 9 million pigs slaughtered in 2024. Against the backdrop of the recovery of the hog cycle, the bank determines that the company's ROE level may lead the industry. Based on the recent rise in pig prices and the improvement in the company's costs, the bank raised its net profit forecast for 2024 from 1.2 billion yuan to 2.6 billion yuan, while maintaining its net profit forecast for 2025 at 3.8 billion yuan.