GF SECURITIES·2026-03-15 14:22Investment Rating - The industry investment rating is "Buy" [2] Core Views - The report indicates that the current national average pig price has dropped to approximately 10 yuan/kg, marking a new low since 2019, with some regions falling below 10 yuan/kg, suggesting it may be at the bottom of the current cycle [15][61] - The report highlights that the new round of capacity reduction is beginning, with the industry likely to see effective capacity clearance due to the current state of overall losses and accelerated elimination of sows [7][55] - The report suggests that the industry is facing a bottleneck in efficiency improvement, which may limit further enhancements in production efficiency [48] Summary by Sections 1. Pig Prices at a Seven-Year Low, Piglet Prices Decline During Peak Season - The national average pig price fell to 10.1 yuan/kg as of March 12, with some areas dropping below 10 yuan/kg, indicating a potential bottom for this cycle [15] - The price of piglets has also decreased, with the current price for 7 kg piglets at 316 yuan/head, down 13.7% from early February, reflecting a pessimistic outlook among farmers regarding future prices [21][15] 2. New Round of Capacity Reduction is Opening, Industry Capacity May Be Effectively Cleared - The report notes that the industry fixed asset stock has peaked, and many old pig farms are facing elimination, which may improve the current redundancy in pig farm capacity [28][29] - Policy measures continue to restrict the expansion of large-scale pig farming enterprises, with a focus on controlling sow capacity [38][39] 3. Investment Recommendations - The report recommends focusing on leading companies with cost advantages, specifically highlighting Wens Foodstuffs Group and Muyuan Foods, while also suggesting attention to DeKang Agriculture and New Hope [61]