Shenwan Hongyuan Securities·2026-03-22 14:25Investment Rating - The report maintains a "Positive" outlook on the agricultural, forestry, animal husbandry, and fishery industry [1][5]. Core Insights - The report emphasizes embracing the cyclical reversal in the industry, particularly focusing on the accelerated capacity reduction in pig farming due to ongoing losses and the potential for a price rebound in beef and raw milk [1][5]. - The report highlights that the traditional off-season for pork demand occurs from March to May, with expectations of supply peaking in Q2 2026, leading to continued industry losses [3][5]. - Rising raw material prices are expected to increase farming costs, exacerbating cash flow pressures for farmers and accelerating the elimination of breeding sows [3][5]. - The report suggests that the upward trend in crude oil prices could reverse the agricultural product price cycle, with a potential rebound in grain prices after three years of decline [3][5]. - Key investment opportunities are identified in companies such as Muyuan Foods, DeKang Agriculture, Wen's Foodstuffs, and others [3][5]. Summary by Sections Market Performance - The Shenwan Agricultural, Forestry, Animal Husbandry, and Fishery Index fell by 4.5%, while the CSI 300 Index decreased by 2.2% [4]. - The top five gainers included ST Jinggu (6.0%), Zhongxing Junye (4.5%), and others, while the top five losers included Yasheng Group (-18.8%) and Hainan Rubber (-15.4%) [4][11]. Livestock Farming - The report notes that the average price of live pigs has dropped to 9.81 CNY/kg, a decrease of 2.8% week-on-week, indicating significant losses in the pig farming sector [3][12]. - The average loss for self-breeding sows has increased to 292 CNY per head, with a notable decline in piglet prices, which are nearing cost levels [3][12]. - The report anticipates a rapid reduction in breeding sow capacity and suggests that the sector is approaching a critical investment opportunity [3][5]. Poultry Farming - The price of white feather chicken chicks has risen by 8.9% week-on-week to 2.93 CNY/chick, driven by improved demand and tight supply from small producers [3][5]. - The average selling price of white feather broilers is 3.56 CNY/kg, reflecting a slight increase [3][5]. Dairy and Beef Industry - The report indicates that beef prices remain strong, with the average price for fattened bulls at 25.89 CNY/kg, up 0.6% week-on-week [3][5]. - Raw milk prices have slightly decreased to 3.02 CNY/kg, but the report remains optimistic about a cyclical upturn in the dairy sector [3][5]. Investment Recommendations - The report recommends focusing on companies that are well-positioned to benefit from the anticipated cyclical recovery, including Muyuan Foods, DeKang Agriculture, Wen's Foodstuffs, and others [3][5].