Against the backdrop of the hog industry navigating an extended cycle, market evaluation of breeding enterprises is shifting focus from production volume to operational quality. DEKON AGR (02419) has delivered standout performance demonstrating resilience through the cycle. Full-year 2025 operating revenue reached RMB 23.159 billion, achieving counter-cyclical growth of 3.1%. Hog sales volume hit 10.8279 million heads, a year-on-year increase of 23.3%. The company further solidified its position in the industry's top tier with a complete cost per kilogram of approximately RMB 11.9 and a profit per head of RMB 160-180 by the end of 2025. Holding nearly RMB 10 billion in monetary funds and bank credit facilities alongside minimal capital expenditure of just RMB 880 million outlines a robust profile characterized by enhanced efficiency, cost reduction, and low-asset risk resilience.
This achievement is not incidental but represents the concentrated release of systemic advantages cultivated by DEKON through long-term dedication. From a breeding segment bolstered by billions in investment and the technical foundation of the "DEYU Cloud" intelligent platform, to refined production capabilities with a PSY exceeding 27, and leading industry capabilities in PRRS dual-negative purification—DEKON has built a cost moat to withstand cyclical downturns through its integrated approach of "Breeding + Management + Disease Purification." This is complemented by the "No. 2 Farm" light-asset model, where sows are entrusted to family farms. This model continuously empowers farmers, developing them into skilled breeders proficient in technique, management, and operation, thereby creating stable, ongoing income and serving as a model for linking and supporting agriculture.
DEKON is reshaping the competitive logic of the hog industry through efficiency restructuring and model innovation.
The foundation of the RMB 11.9/kg cost by end-2025 lies in a "Trinity" efficiency barrier that provides a profit safety net at the cycle's bottom. While the industry faced widespread pressure, DEKON's full-year complete cost fell to approximately RMB 12.32/kg, down 9.74% year-on-year, reaching RMB 11.9/kg by the end of 2025, with profit per head and production efficiency firmly in the industry's top tier. This cost advantage stems from a "Trinity" efficiency barrier built across three core areas: breeding, management, and disease control.
In breeding, leveraging two national core breeding farms, the company has consistently invested billions since 2011, accumulating over 360,000 performance records and genomic data for 61,412 heads. The "DEYU Cloud" intelligent breeding platform launched in 2025 improved genetic evaluation accuracy by 40% and reduced calculation time for inbreeding coefficients in large populations to seconds. These digital breakthroughs directly translated into improved hard metrics at the production end.
In management, the company comprehensively advanced lean management, strengthening feeding practices and boosting labor efficiency. By improving key indicators like PSY and MSY, it significantly reduced the complete cost of weaned piglets and finishing. The company's PSY is now stable above 27, placing it in the industry's top tier.
In disease control, DEKON's PRRS dual-negative purification capability is industry-leading. During the reporting period, its core breeding farms and boar stations achieved PRRS dual-negative status, with the number of disease-purified farms leading the industry. Core and multiplier farms have fully achieved purification for pseudorabies and classical swine fever. By eliminating sources of infection and blocking transmission routes, herd health improved substantially, significantly reducing disease-related losses and fortifying the foundation for enhanced breeding efficiency and cost optimization.
It is this integrated "Breeding + Management + Disease Purification" efficiency system that supports DEKON's ability to maintain stable profit margins even at the bottom of the industry cycle, serving as the core ballast for navigating volatility.
If cost advantage is DEKON's "hard power" for cycle resilience, its light-asset model constitutes the "soft power" framework for resisting cyclical fluctuations. The effectiveness of this model is now clearly validated by data. In 2025, the complete cost for No. 2 Farms was lower than company-owned farms, with excellent individual farms achieving a PSY exceeding 30. The average annual income for cooperative farmer settlement entities in the No. 2 Farm model increased significantly, highlighting its role in linking and supporting farmers.
The scale effect of this model continues to amplify. In the Yibin "Hundred Villages, Million Heads" project, DEKON established a new integrated development framework involving "government coordination, enterprise leadership, farmer participation, bank support, and insurance safeguards." A technical training center for hog farming, built with an investment of RMB 50 million, was inaugurated in December 2025, employing European experts to provide technical training with the capacity to qualify 300 new-type farm owners annually.
From a financial perspective, DEKON's light-asset operation has led to逐年减少的资本开支, with 2025 capital expenditure at only RMB 880 million. Farmer rearing fees offer a clear advantage compared to similar industry models. The company is actively exploring upgrading the traditional linear rearing relationship into a multi-dimensional value co-creation ecosystem. Under this new paradigm, the virtuous cycle of "A-Class Enterprise + A-Class Partners" ensures that technical advantages are effectively implemented, becoming a key factor for DEKON's sustained outperformance in industrial chain profitability.
While the core hog business builds a solid cost advantage, DEKON's full industrial chain layout is accelerating the release of synergistic value. Auxiliary product and poultry segments showed strong improvement momentum in 2025, with diversified businesses accelerating from a "strategic investment phase" towards a "profit contribution phase."
In 2025, DEKON's slaughter volume reached 844,000 heads, a 93% year-on-year increase, driving auxiliary product segment revenue up 55.25% to RMB 1.422 billion. This rapid growth stems from the successful implementation of the company's "production based on sales, order-driven" operational strategy. Concurrently, comprehensive lean management, with refined control over production costs, labor efficiency, and energy consumption, led to significant loss reduction, accelerating the move towards breakeven.
The poultry segment reported annual revenue of RMB 2.93 billion, demonstrating a positive trend of "sequential quarterly improvement," achieving profitability in the fourth quarter and significantly narrowing the full-year loss, indicating growing operational resilience.
As the company continues to advance the construction of a closed-loop industrial chain from "hog breeding—slaughtering—deep processing," and with the full operation of the 60,000-ton food deep-processing line in Yibin, it will optimize product portfolios like "DEZHEN" and "DEWEI" to increase the proportion of high-margin deep-processed products, further leveraging the strategic value of the full industrial chain as a stabilizer.
DEKON's 2025 annual results are not merely a report of figures but a case study on building anti-fragile capabilities during cyclical troughs. Reviewing the details, the core reason DEKON maintains an extreme cost of RMB 11.9/kg and nearly RMB 10 billion in monetary funds and credit lines, despite industry-wide losses, lies in its strategic resolve of "walking on two legs." One leg grows inward, honing "hog genetics" and "human efficiency" to the extreme through billions in breeding investment and digital technology, building an insurmountable cost moat. The other leg reaches outward, deeply aligning corporate and farmer interests through the DEKON light-asset model, achieving a win-win for business efficiency and social value.
Looking ahead to 2026, for the hog segment, the company plans to control the complete cost below RMB 11.6/kg, excluding feed price fluctuations. For the poultry and auxiliary product segments, efforts will focus on three directions: "optimizing structure, strengthening breeding, and reducing costs while improving quality," adhering to a dual-track approach of low-cost, high-efficiency攻坚 coupled with突围 through high-quality premium products.
As DEKON achieves even lower complete costs for hog farming and its diversified segments like slaughtering and poultry transition from "strategic investment" to "profit contribution," DEKON is evolving from a single-focus breeding giant into a full industrial chain food group. True strength is demonstrated not by peak-cycle windfalls but by holding significant筹码 at the cycle's bottom. DEKON's actions prove that in a market full of uncertainty, only by translating long-termism into definitive efficiency advantages can one navigate the fog of cycles and usher in spring for value creators.
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