Dongxing Securities·2025-09-24 07:27Investment Rating - The industry investment rating is "Positive" for the agricultural, forestry, animal husbandry, and fishery sector [5]. Core Insights - In August 2025, pig prices continued to decline, with average prices for piglets, live pigs, and pork at 33.63 CNY/kg, 14.35 CNY/kg, and 24.98 CNY/kg respectively, showing month-on-month changes of -5.87%, -3.77%, and -1.52% [1][16]. - By September 19, 2025, the national average price for live pigs dropped to 12.82 CNY/kg, marking the lowest level in three years [1][16]. - The supply side saw a significant increase in market pressure due to a recovery in supply and concentrated selling by smallholders, leading to a notable price drop [1][18]. - Demand was suppressed by high temperatures in August, resulting in weak sales of pork products, with limited uplift from the back-to-school season [1][18]. - The Ministry of Agriculture and Rural Affairs reported a slight decrease in the number of breeding sows to 40.42 million heads in July, indicating a trend of capacity reduction [22]. Summary by Sections Industry Supply and Demand - August saw a significant decline in pig prices, with the average price for live pigs falling below 14 CNY/kg [1][16]. - The supply pressure increased as smallholders concentrated their sales, leading to a clear price drop [1][18]. - Demand remained weak due to high temperatures affecting consumption [1][18]. Policy and Capacity Control - A meeting held on September 16 by the Ministry of Agriculture and the National Development and Reform Commission emphasized strict capacity control measures, aiming to reduce the number of breeding sows by 1 million heads by January 2026 [2][22]. - The government aims to stabilize pig prices while reducing excess capacity, with short-term downward pressure on prices expected [2][22]. Market Performance and Company Insights - In August, major companies like Muyuan Foods, Wens Foodstuff, and New Hope reported average sales prices of 13.51 CNY/kg, 13.90 CNY/kg, and 13.54 CNY/kg respectively, all showing month-on-month declines [9][30]. - The total sales volume for listed pig farming companies increased by 6.48% month-on-month, with a year-on-year growth of 28.44% [33][38]. - Companies with cost advantages, such as Muyuan Foods and Wens Foodstuff, are expected to maintain profitability and benefit from better earnings elasticity once price rebounds occur [27][40].