智通财经网·2025-08-21 23:23Core Viewpoint - The recent increase in pork supply due to seasonal factors and prior pig fattening has led to a slight decline in pig prices, prompting the government to implement measures to stabilize the market [1][2]. Industry Overview - The National Development and Reform Commission has reported that the average pig-to-grain price ratio has fallen below 6:1, entering a warning zone, which has led to the decision to store frozen pork to stabilize prices [1]. - The Ministry of Agriculture and Rural Affairs has indicated that the current pig production capacity is temporarily high, necessitating a reduction of approximately 1 million breeding sows to prevent significant price fluctuations [2][3]. Production Adjustments - The industry is responding to government guidance by reducing the number of breeding sows, which directly impacts the supply of market pigs in the following months [2][3]. - Major companies are adjusting their production strategies, with some reporting a decrease in average slaughter weights and sales volumes in July [3][4]. Sales and Pricing Trends - In July, leading companies such as Muyuan, Wens Foodstuffs, and New Hope reported average sales prices for pigs ranging from 14.30 to 14.58 CNY/kg, with slight month-on-month increases [3]. - However, the sales volume for these companies showed a mixed trend, with some experiencing declines in the number of pigs sold compared to previous months [3][4]. Future Outlook - Analysts predict that the supply of pigs will tighten in the coming quarters, potentially leading to an upward adjustment in pork prices as the industry works through excess capacity [5]. - The impact of current policies is expected to manifest more significantly in 2026, with a potential increase in the price baseline for pork [5]. Company Performance - Dekang Agriculture reported sales of 780,200 pigs in July 2025, with a revenue of 1.427 billion CNY, while the average selling price for pork decreased slightly from the previous month [6]. - COFCO Joycome announced a total of 427,000 pigs sold in June 2025, with a cumulative total of 2.898 million pigs for the year, indicating a stable performance in the fresh pork market [6]. - WH Group's projected core net profits for 2025 and 2026 are estimated at 1.614 and 1.683 billion USD, respectively, with a target price of 8.56 HKD per share, suggesting a favorable outlook for the company [6].