Goldman Sachs has released a research report indicating that mainland hog prices are expected to have bottomed out, with the industry currently at a cyclical low and poised for a recovery. The firm has lowered its target price for Muyuan Foods Co., Ltd. (02714) H-shares from HK$68 to HK$64, and for its A-shares (002714.SZ) from 62 yuan to 58 yuan, while maintaining a "Buy" rating on both. The report notes that current hog prices have fallen to 8.7 yuan per kilogram, the lowest level in 25 years, leaving nearly all producers in a state of cash losses. It is anticipated that medium-sized farms may exit the market in the short term. Goldman Sachs forecasts that effective hog slaughter volumes will contract by 4% to 7% year-on-year over the next few quarters, driving a rebound in hog prices to 15 yuan per kilogram in the second half of the year, with a further increase to 15.3 yuan by 2027. The firm has reduced its 2026 recurring profit forecast for Muyuan by 17%, reflecting a lower hog price assumption, while projections for 2027 and 2028 remain largely unchanged. Goldman Sachs believes that Muyuan's H-share price currently implies a 35% downside to replacement value, a 10% upside from historical lows, and a 60% upside to the mid-cycle valuation, presenting an attractive risk-reward profile.