Shenwan Hongyuan Securities·2026-01-12 11:03Investment Rating - The industry investment rating is "Overweight," indicating that the industry is expected to outperform the overall market [4]. Core Insights - The report highlights a rebound in pig prices, which are stabilizing and maintaining strength. The focus is also on the pet industry following the release of a white paper on the sector [1][3]. - The report suggests that the supply of pigs remains ample in the first half of 2026, with a prolonged bottoming period expected for the industry cycle. The logic for a rebound in 2026 remains intact, presenting potential investment opportunities [3][4]. Summary by Sections Pig Farming - As of January 11, the national average price for external three yuan pigs is 12.70 yuan/kg, reflecting a week-on-week increase of 2.1%. The supply of large pigs is tight, and the enthusiasm for secondary fattening has increased, leading to a temporary tightening of the market [3]. - The price of weaned piglets has also risen, reaching 251 yuan/head, nearing industry cost levels. The report notes that the production capacity reduction has slowed down, with a slight increase in the number of breeding sows [3][4]. Pet Industry - The 2026 China Pet Industry White Paper indicates that the urban pet consumption market reached 312.6 billion yuan in 2025, growing by 4.1% year-on-year. The dog market accounted for 160.6 billion yuan, while the cat market reached 152.0 billion yuan [3]. - The average annual spending per pet owner has shown a slight increase, with dog owners spending an average of 3,006 yuan and cat owners spending 2,085 yuan [3]. Chicken Farming - The average price for white feather broiler chicks has decreased to 3.15 yuan/chick, a week-on-week decline of 6.5%. Despite this, the supply of broilers remains tight, with the average price for broiler chickens at 3.79 yuan/kg [3]. - The report emphasizes that the theme of abundant supply in the white feather chicken market will continue into 2025-2026, and it suggests focusing on leading companies in the sector [3].