Huaxi Securities: EU Anti-Dumping Measures on Pork Implemented, Focus on the Swine Breeding Sector

According to the Zhitong Finance APP, Huaxi Securities released a research report stating that the current breeding pig Shenwan index PE & PB are both at a relatively low level in the past 10 years, with valuations being low and a positive outlook on the medium to long-term rise of the pig price center. The report continues to recommend the pig breeding sector. Among them, companies with high breeding efficiency, excellent cost control, and good financial conditions will continue to benefit. Specifically, the bank's top pick is LIHUA (300761.SZ), as it is China's second-largest yellow feather broiler breeding company, with a stable yellow chicken business. Recently, yellow chicken prices have continued to rise, and Q3 performance is expected to reach a turning point. Additionally, leading pig breeding companies such as MUYUAN (002714.SZ) and WENS (300498.SZ) are also expected to benefit significantly. The main points of Huaxi Securities are as follows: Event The Ministry of Commerce announced the preliminary ruling on the anti-dumping investigation of imported pork and pork by-products originating from the European Union. The investigating authority preliminarily determined that the imported pork and pork by-products from the EU are being dumped, causing substantial damage to the domestic industry, and there is a causal relationship between the dumping and the substantial damage. According to Articles 28 and 29 of the Anti-Dumping Regulations, the investigating authority decided to implement temporary anti-dumping measures in the form of a deposit. Starting from September 10, 2025, import operators must provide the corresponding deposit to the Customs of the People's Republic of China based on the deposit ratio determined by this preliminary ruling when importing the investigated products. In the past five years, the proportion of pork products imported from the EU accounted for about 50% of the total import volume in China. According to data from the General Administration of Customs, in 2024, China is expected to import about 2.36 million tons of pork and related products, of which approximately 1.12 million tons will be imported from EU member states, accounting for 47%. Spain, an EU member state, is China's largest pork import source, with imports of pork and related products approaching 540,000 tons in 2024. From 2020 to 2022, the proportion of imported pork and related products from the EU exceeded 50%, dropping to 47% in 2023 and 2024. Over the past five years, Spain has consistently been China's largest source of imported pork and related products. From January to July 2025, China imported 1.39 million tons of pork and related products, of which 690,000 tons came from the EU, accounting for nearly 50%. Spain remains the largest source of imports, with an import volume of 330,000 tons, accounting for nearly 24%. Import restrictions & promotion of high-quality development, price center is expected to rise. In 2024, China's pork production is expected to reach 57.06 million tons, with imports accounting for more than 4% of production. The EU's long-term low-price dumping of related products has impacted the domestic industry. After the implementation of anti-dumping measures, increased import costs will affect import volumes, which is expected to reduce supply pressure on the domestic market. Additionally, China has been promoting measures related to anti-involution in the pig industry in recent months. For example, on July 23, the Animal Husbandry and Veterinary Bureau of the Ministry of Agriculture and Rural Affairs held a symposium to promote high-quality development in the pig industry, inviting leading enterprises in the pig breeding industry chain to participate. The meeting pointed out the need to strictly implement capacity control measures, reasonably eliminate sows that can breed, appropriately reduce the number of breeding sows, decrease secondary fattening, control the slaughter weight of fat pigs, and strictly control new production capacity. Leading pig breeding companies such as MUYUAN have planned to gradually eliminate low-yield and low-efficiency sows, reducing the number of breeding sows by 3.82% from the end of June The main import source regions are restricted, and the high-quality development of domestic pig farming continues to advance. The bank believes that in the medium to long term, the inefficient capacity of the domestic pig industry will gradually exit, and the price center is expected to rise. The market share of high-quality capacity will increase, and companies with high farming efficiency and excellent cost control will see further profit growth. Risk Warning Risks of slower-than-expected regulation of breeding sows, risks of pig diseases, risks of consumption falling short of expectations, risks of changes in environmental protection policies, and risks of fluctuations in raw material prices