Citibank: First give Muyuan Shares (02714) H share “buy” rating target price of HK$48, optimistic about the recovery of the pig breeding cycle

The Zhitong Finance App learned that Citi released a research report saying that it covered Muyuan shares (02714,002714.SZ) for the first time, giving H shares a “buy” rating and a target price of HK$48. The target price for A-shares was RMB 50.9, which also gave it a “buy” rating. The bank believes that with its structural cost leadership, self-sufficient breeding capacity, and an increasingly smooth and profitable slaughter business, the company will occupy the best position in the long and stable pig breeding cycle in the future.

Citi pointed out that the profitability of Muyuan Co., Ltd. still depends on pig prices, but considering the company's size and operating advantages, the bank expects a recovery in pig prices in 2027 and 2028 to boost its profits. The bank said that Muyuan Co., Ltd. is the largest pig breeding and slaughter enterprise in China, and turned the 2018 African swine fever crisis into a lasting scale and cost advantage. Citi believes that Muyuan Co., Ltd. is the best representative of the recovery of China's pig breeding cycle.