According to Zhitong Finance APP, recently there has been a nationwide drop in temperature, and the hog consuming side has shown signs of recovery, driving a rise in hog prices. According to Yongyi Consulting data, last week the commodity hog price hit a low of 16.04 yuan per kilogram on Monday, reaching the lowest point in the downward cycle. Since last Tuesday, the commodity hog prices have continuously rebounded, reaching 16.38 yuan per kilogram by last Friday, an increase of 0.34 yuan per kilogram compared to last Monday. Analyst from Huaxin Securities believes that the recent rebound in pork prices is mainly driven by the realization of short-term demand expectations for cured products, as well as the reemergence of selling reluctance on the supply side.

This round of pork price rebound is mainly due to the arrival of cold air, boosting the enthusiasm for purchase and sales in the domestic market, leading to an increase in orders from slaughtering companies, and higher operating rates, thus enhancing market bullish confidence. Meanwhile, as the pork price reaches a temporary bottom, the willingness to sell in the market has weakened, the pace of hog sales from farms in society has slowed down, and mainstream large-scale hog enterprises have showed a mindset of reducing supply to increase prices. Analyst Wang Hongyan from Shanghai Ganglian Agricultural Products Division believes that with the decrease in temperature and the approach of holidays, consumer demand for cured products will gradually increase. This will prompt slaughtering companies and hog farmers to increase pork supply to meet market demand. Under the influence of supply and demand relations, pork prices are expected to rebound.

From the breeding side, many A-share listed pig companies have successfully reduced costs. For instance, Shen Nong Group, Muyuan Foods, and Wens Foodstuff Group have managed to lower their breeding costs to below 14 yuan per kilogram. Specifically, Shen Nong Group had a total cost of 13.4 yuan per kilogram in September, which is currently the lowest among listed pig companies; Muyuan Foods at 13.7 yuan per kilogram, Wens Foodstuff Group at 13.8 yuan per kilogram, and Tecon Biology Co. Ltd at 13.91 yuan per kilogram. Wens Foodstuff Group's comprehensive breeding cost for meat pigs dropped to around 6.7 yuan per jin in October, with the company preliminarily planning a target of below 6.5 yuan per jin for the entire year of 2025. Cost reduction and efficiency increase are likely to become crucial factors for profitability among listed pig companies next year and serve as a moat against future downturns.

Data from Mysteel Agricultural Products show that the average price for the national external three yuan hog market in the third quarter of 2024 was 19.37 yuan per kilogram, up 18.42% month-on-month and up 21.54% year-on-year. With the decline in costs and the increase in prices, the performance of various hog farming enterprises improved significantly year-on-year. Among them, Muyuan Foods achieved a net income of 10.481 billion yuan in the first three quarters, a year-on-year increase of 668.90%; Wens Foodstuff Group achieved a net income of 6.408 billion yuan in the first three quarters, a year-on-year increase of 241.47%.

Additionally, since November, the investment research information disclosed by several listed companies in the hog farming industry shows that many pig enterprises remain cautious about expanding production. According to Muyuan Foods, the company is currently in a stage of steady development, and the speed of adding new production capacity will be 'moderately slowed' compared to previous periods; New Hope Liuhe also stated that it has 'not undertaken large-scale restoration and expansion' recently.

Dongxing Securities analyst Cheng Shiyue stated that there's no need to be overly pessimistic about pork prices in 2025, as the breeding side is expected to maintain reasonable profitability. From a medium to long-term perspective, Dongxing Securities determines that the influence of the supply side will significantly exceed that of the demand side, maintaining the judgment of volatility and adjustment in pork prices, but remains bullish about the rebound expectations for pork prices in May 2025 and beyond, anticipating that the piglet prices will continue the previous upward trend.

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Cofco joycome (01610): In October, 0.321 million heads were slaughtered, with an average sale price of 17.45 yuan per kilogram for commodity pigs, and fresh pork sales at 0.022 million tons. The analyst determines that the company may benefit from management improvements and declining raw material costs, with overall costs showing a further downward trend. On the other hand, the company emphasizes enhancing asia vets, breeding, and epidemic prevention levels, which may lead to improved management capabilities and a bullish impact on long-term cost reduction.

Dekon agr (02419): In October, the company sold 0.76997 million heads of hogs with sales revenue of 1.782 billion yuan; the average selling price of the company's commodity pigs was 17.73 yuan per kilogram, down 7.32% from September 2024. The analyst points out that considering the company's cost improvements and the increase in pork prices, the 2024 profit forecast has been raised by 23% to 3.2 billion yuan, with the 2025 profit forecast basically maintained.

WH group (00288): On the evening of November 17, WH group announced its plan to spin off Smithfield to independently list on the USA exchange. It is estimated that the Smithfield offering is expected to account for up to 20% of shares presented on a fully diluted basis. The offering price for Smithfield has not yet been determined, and the expected valuation before listing is no less than 5.38 billion USD.