Tianfeng Securities·2025-09-28 13:17Investment Rating - Industry rating: Outperform the market (maintained rating) [8] Core Views - The pig farming sector has entered a loss phase, with a focus on the negative expectations for the sector. The average price of pigs has dropped to 12.76 CNY/kg, a decrease of 1.39% from the previous week, leading to a loss of 54 CNY per head for self-breeding and self-raising operations [2][11]. - The dairy and beef sectors are experiencing a potential new cycle, with a significant reduction in dairy cow inventory by nearly 8%. The price of raw milk is expected to bottom out, while beef prices may see an upward trend [3][13]. - The pet industry is witnessing the rise of domestic brands, with a notable increase in pet food exports, indicating a robust growth in the pet economy [4][14]. - The poultry sector is facing challenges with breeding imports and consumer demand, particularly for white and yellow chickens, while egg-laying enterprises are achieving record profits [5][20]. Summary by Sections Pig Farming Sector - The industry is currently in a loss phase, with the average pig price at 12.76 CNY/kg and a loss of 54 CNY per head for self-breeding operations. The average weight of pigs at slaughter is at a historical high [2][11]. - The market is expected to see a reduction in production capacity due to ongoing low prices and policy guidance [12]. Beef and Dairy Sector - The price of live cattle is 27.14 CNY/kg, with a year-on-year increase of 11.3%. The raw milk price is stable at 3.03 CNY/kg, with expectations for a recovery in prices as production capacity clears [3][13]. - Companies with mother cow resources or those adopting a "milk-meat linkage" model are expected to have stronger profitability [13]. Pet Industry - The domestic pet food market is growing rapidly, with significant sales increases noted in both cat and dog food categories. Exports of pet food have also risen, reflecting a healthy market [4][14]. - Key companies to watch include Guibao Pet, Zhongchong Co., and Petty Co. [4][14]. Poultry Sector - The white chicken sector is facing uncertainties in breeding imports, with a 26.9% year-on-year decrease in breeding stock updates. The yellow chicken market is sensitive to demand changes, with expectations for price improvements in the latter half of the year [5][19]. - Leading companies in the poultry sector include Shengnong Development and Yisheng Co. [17][19]. Seed and Agricultural Sector - The seed industry is poised for a turnaround, with a focus on biotechnology and transgenic crops to enhance production efficiency. Key companies include Longping High-Tech and Dabeinong [6][22]. - The agricultural sector is expected to benefit from policies aimed at increasing crop yields and improving food security [22]. Feed and Animal Health Sector - The feed sector is recommended for investment, particularly Haida Group, which is expected to gain market share as smaller competitors exit the market [7][23]. - The animal health sector is focusing on innovative products to break through market saturation, with a growing demand in the pet health market [7][24].