DEKON AGR (02419) experienced a notable rise of over 6% during the afternoon trading session. As of the time of writing, the stock was up 6.44%, trading at HKD 76.05, with a turnover of HKD 78.24 million.
According to iFind data, the national inventory of productive sows declined to 39.61 million head by the end of December, a reduction of 290,000 head compared to October, indicating a gradual manifestation of production capacity reduction efforts.
Huafu Securities released a research report stating that with persistently weak hog prices and the advancement of production capacity control policies, the industry's capacity reduction is expected to continue. This trend is anticipated to drive a long-term upward shift in the central hog price level, allowing low-cost, high-quality hog farming enterprises to capture excess returns.
China Merchants Securities noted that DEKON AGR has long been deeply involved in the hog and yellow-feathered broiler breeding industries. Its accumulated breeding advantages over the years have resulted in livestock production costs that lead the industry. For hog farming, the company has consistently focused on cost optimization, and its current all-in cost may have been reduced to approximately CNY 12 per kilogram, firmly placing it in the industry's top tier, with further potential for cost reduction expected. The company plans to prioritize the development of its 'Type 2 Family Farm' model, following policy guidance, to partner with farmers and actively respond to national initiatives, demonstrating the responsibility of a leading hog enterprise.
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