HTSC·2026-03-03 02:30Investment Rating - The industry investment rating is "Overweight" for the agriculture, forestry, animal husbandry, and fishery sector [5]. Core Views - The report emphasizes that the price of live pigs has fallen unexpectedly, leading to an accelerated reduction in the breeding sow population, reinforcing the logic of capacity reduction in the pig farming sector. The average price of live pigs in China has dropped to 10.56 yuan per kilogram as of March 2, 2026, marking a new low since 2022 [1][2][3]. - The report predicts that the price of live pigs may drop below 10 yuan per kilogram in the near future due to oversupply and seasonal demand fluctuations [2][3]. - The report highlights that the current low prices are causing significant losses in the pig farming sector, with an average loss of approximately 160 yuan per head for self-breeding and self-raising pigs. This situation is expected to lead to an accelerated elimination of breeding sows [3][4]. Summary by Sections Price Trends - The average price of live pigs has decreased to 10.56 yuan per kilogram, with expectations that it may fall below 10 yuan per kilogram in the coming months due to increased supply and seasonal demand decline [2][3]. Supply and Demand Dynamics - The breeding sow population has only begun to decrease since August 2025, indicating that pig supply will continue to increase until June 2026. Current market conditions show an oversupply of pigs, with heavier average weights at slaughter compared to the previous year [2][3]. Investment Recommendations - The report reaffirms a strong recommendation for the pig farming sector, specifically highlighting stocks such as Muyuan Foods, Wens Foodstuff Group, and Shennong Group as key investment targets [1][4][7]. - Historical analysis indicates that the pig farming sector performs well during the capacity reduction phase and the reversal phase of the pig cycle, with the current price drop acting as a significant catalyst for investment [4].