Dongxing Securities·2026-02-26 10:35Investment Rating - The industry investment rating is "Positive" [9] Core Insights - In January 2026, the average prices for piglets, live pigs, and pork were 25.38 CNY/kg, 13.18 CNY/kg, and 23.40 CNY/kg, respectively, with month-on-month changes of 8.44%, 7.50%, and 3.39% [1][16] - The supply side saw a normal rhythm of slaughtering in large-scale farms, while small and medium-sized farmers slowed down, supporting January pig prices. However, post-holiday expectations weakened, leading to increased supply pressure in February [1][19] - The demand side experienced a gradual increase in market activity due to pre-Spring Festival stocking, but slaughtering profitability pressures hindered operational rates and price increases [1][19] Summary by Sections Industry Supply and Demand Performance - January saw a recovery in pig prices, but February prices began to decline, with the national average for live pigs at 12 CNY/kg as of February 10 [1][16] - The supply of pigs is expected to increase due to concentrated pre-holiday slaughtering, while demand remains weak due to a late Spring Festival and insufficient terminal stocking support [1][19] Capacity Change Trends - As of December 2025, the number of breeding sows decreased to 39.61 million, down 1.10% from October [2][25] - The recent improvement in profitability during peak seasons has slowed the pace of capacity reduction, but the downward trend remains intact [2][25] Future Market Outlook - The downward pressure on pig prices is significant, with expectations of industry losses clearing out as prices hit a bottom. The second half of 2026 may see a price rebound due to policy adjustments and capacity reductions [3][30] - The industry index PB is at a historical low, indicating a safety margin in valuations. Recommended stocks include leading companies with strong performance, such as Muyuan Foods and others [3][30] January Sales Data of Listed Companies - In January, the sales prices for major companies like Muyuan Foods and Wens Foodstuffs increased month-on-month, while their sales volumes decreased [9][39] - The average slaughter weight varied among companies, with some showing increases while others experienced declines [39][41] Cost Analysis - The cost of pig farming is a critical factor, with leading companies maintaining costs below 12.5 CNY/kg, which positions them favorably for long-term profitability [49][50] - The latest costs for major companies include Muyuan Foods at 11.80 CNY/kg and Wens Foodstuffs at 12 CNY/kg [50][51]