Core Viewpoint - The report from Dongxing Securities indicates that the regulation of pig production capacity under policy guidance will remain a key theme in the near future, with expectations for the elimination of outdated capacity increasing and the cost advantages of high-quality capacity becoming more pronounced, leading to better profit elasticity post-regulation [1] Industry Supply and Demand Performance - The downward trend in pig prices continues, with average prices for piglets, live pigs, and pork in September 2025 at 30.06 CNY/kg, 13.81 CNY/kg, and 24.50 CNY/kg respectively, showing month-on-month changes of -10.62%, -3.79%, and -1.92% [1] - After the National Day holiday, the average price of live pigs has been on a continuous decline, reaching 10.90 CNY/kg by October 20 [1] Supply Side - In September, there was a concentrated release of pig output, with an increase in the outflow plans from both large-scale and social farms as the weather cooled, leading to a rise in market pig supply and meat output [2] - The demand side saw slight improvement due to pre-holiday stocking and cooler weather, but slaughter enterprises remained cautious, and slow inventory reduction of frozen products limited fresh product consumption growth [2] - By mid-October, the pace of second fattening at near the 10 CNY/kg bottom price accelerated, providing slight support to short-term pig prices [2] Capacity Change Trends - As of the end of September, the number of breeding sows was 40.35 million, a month-on-month decrease of 0.07%, and a reduction of 90,000 heads compared to the end of Q2 [3] - Data from various sources indicate a consistent downward trend in breeding sow inventory, with a month-on-month decline of 0.84% in the sample data from Yongyi and 0.28% in the Steel Union sample data [3] Policy Regulation and Price Decline - Current policy regulations are fully implemented, with previous meetings clarifying requirements for production capacity control, slaughter weight, and environmental funding [4] - Leading enterprises have responded positively, with Muyuan Foods reporting a breeding sow inventory of 3.305 million heads at the end of September, a reduction of 126,000 heads since the end of June [4] - As of October 24, 2025, the average profit per head for self-bred pigs in the industry was -185.68 CNY, and for purchased piglets, it was -289.07 CNY, indicating increased losses in farming [4] - The combination of policy regulation and industry losses is expected to accelerate capacity reduction, with pig prices likely to see an upward turning point in the second half of 2026 [4]

Report Summary 1. Report Industry Investment Rating No relevant information provided. 2. Core Viewpoints of the Report - The current pig market is characterized by an oversupply situation, with high pig production capacity and a weak demand outlook. The short - term supply - demand imbalance is difficult to reverse, and the pig price is under pressure. Although the policy has released positive signals, the actual reduction in production capacity is less than expected. The pig price is expected to remain in a weak and volatile state in the short term, with a possible seasonal improvement in the fourth quarter and a potential price rebound [7][8]. - For the strategy, the main contract of live pigs is expected to fluctuate widely at a low level, with a reference range of 11,000 - 13,000. In the options market, selling out - of - the - money put options is recommended [8]. 3. Summary by Directory 3.1. Weekly Views and Strategies - **Fundamental Viewpoints** - **Spot Market**: The weekly average price of live pigs increased to 11.33 yuan/kg, up 3.47% week - on - week and down 34.92% year - on - year. The low pig price has increased the enthusiasm for secondary fattening, providing some support around 10 yuan/kg. However, the high supply and weak demand situation persists, and the market is expected to remain weak and volatile [7][14]. - **Production Capacity**: In the first three quarters of 2025, the national pig slaughter reached 529.92 million heads, a year - on - year increase of 1.8%. The pork output was 43.68 million tons, a year - on - year increase of 3.0%. By the end of the third quarter, the national pig inventory was 436.8 million heads, a year - on - year increase of 2.3%. In September 2025, the inventory of breeding sows was 4.035 million heads, a year - on - year decrease of 0.7%. The production efficiency has improved, and the pig slaughter is expected to continue to grow until May 2026 [7]. - **Strategy Views and Outlook** - **Outlook**: Policy signals are positive, but the actual reduction in production capacity is slow. In the short term, the supply is abundant, and it is the off - season for demand, so the pig price is under pressure. In the medium term, the production capacity is still being released. The government has introduced a "double 100,000 - head" task for large - scale breeding enterprises. The supply pressure in the fourth quarter of this year and the first quarter of next year is still large, but the demand may improve seasonally in the fourth quarter [8]. - **Strategy**: The supply - demand imbalance is expected to continue in the short term. The main contract is expected to fluctuate between 11,000 - 13,000. Selling out - of - the - money put options is recommended [8]. 3.2. Futures and Spot Market - **Pig Futures and Spot Prices**: The weekly average price of live pigs increased to 11.33 yuan/kg, up 3.47% week - on - week and down 34.92% year - on - year. The low price has increased the enthusiasm for secondary fattening, but the high supply and weak demand situation persists [14]. - **Futures - Spot Basis**: No specific information provided. - **Futures Price Spreads**: No specific analysis provided. - **Standard - Fat and Hairy - White Price Spreads**: The prices of standard and fat pigs increased synchronously this week. The average price difference between standard and fat pigs was - 0.76 yuan/kg, the same as last week. The increase was due to the sufficient supply of standard pigs, low inventory of large - weight fat pigs, and the recovery of catering consumption. The price increase of standard pigs was more significant, leading to a narrowing of the price difference [34]. - **Prices of Piglets and Binary Sows**: The weekly average price of 7 - kg piglets was 166.43 yuan/head, up 0.72% week - on - week and down 50.57% year - on - year. The low market sentiment and strict environmental regulations in Guangdong and Guangxi have reduced the enthusiasm for piglet replenishment [38]. - **Price of Culled Sows**: The average price of culled sows this week was 8.29 yuan/kg, up 2.01% week - on - week and down 35.59% year - on - year. The price is expected to continue to fluctuate with the pig price [41]. 3.3. Production Capacity - **Inventory of Breeding Sows**: In September 2025, the national inventory of breeding sows was 4.035 million heads, a year - on - year decrease of 0.7% and a month - on - month decrease of 0.2%. Although it is within the normal range, it is at the upper limit. The production efficiency has improved, and the pig slaughter is expected to grow until May 2026. According to sample data, the inventory of breeding sows in large - scale farms decreased slightly in September, and the inventory of small and medium - sized farms also decreased [45][48]. - **Culling Volume of Breeding Sows**: In September, the culling volume of breeding sows in large - scale farms was 106,603 heads, a month - on - month increase of 2.54% and a year - on - year increase of 9.60%. The culling volume of small and medium - sized farms was 11,526 heads, a month - on - month increase of 13.80% and a year - on - year increase of 29.83%. The culling volume is expected to continue to increase in October, but the process may be slow [51]. - **Inventory Proportion of Breeding Sows**: No specific analysis provided. 3.4. Supply Side - **Inventory of Commercial Pigs**: In September, the inventory of commercial pigs in large - scale farms was 36.8499 million heads, a month - on - month increase of 1.44% and a year - on - year increase of 5.29%. The inventory of small and medium - sized farms was 1.5402 million heads, a month - on - month increase of 2.93% and a year - on - year increase of 6.29%. The inventory is expected to increase in October [58]. - **Slaughter Volume of Commercial Pigs**: In September, the slaughter volume of commercial pigs in large - scale farms was 10.2173 million heads, a month - on - month decrease of 4.54% and a year - on - year increase of 23.49%. The slaughter volume of small and medium - sized farms was 0.4803 million heads, a month - on - month increase of 1.39% and a year - on - year increase of 33.52%. The slaughter volume is expected to increase in October [61]. - **Average Slaughter Weight of Commercial Pigs**: The average slaughter weight of national outer - ternary pigs this week was 123.21 kg, a week - on - week decrease of 0.18% and a year - on - year decrease of 0.49%. The weight is expected to be supported next week [67]. 3.5. Demand Side - **Pig Slaughter Volume**: The proportion of pigs under 90 kg and over 150 kg in the slaughter volume remained the same as last week. The temperature drop has increased the expectation of a wider standard - fat price difference, but it has little impact on the slaughter proportion of small and large - weight pigs [71]. - **Cold Storage Rate of Slaughtering Enterprises**: The fresh - sales rate of key slaughtering enterprises this week was 86.14%, the same as last week. The cold - storage rate was 18.08%, an increase of 0.24% from last week. The fresh - sales rate is expected to decline next week, and the cold - storage rate may continue to increase slightly [76]. - **Operating Rate and Fresh - Sales Rate of Slaughtering Enterprises**: The operating rate of slaughtering enterprises this week was 34.94%, an increase of 2.56 percentage points from last week and 7.35 percentage points from the same period last year. The operating rate is expected to continue to increase slightly next week [77]. - **Substitute Prices**: No specific analysis provided. 3.6. Cost and Profit - **Pig Breeding and Slaughtering Profit**: The pig breeding industry has entered a deep - loss stage. The average loss per head of self - breeding and self - raising and purchasing piglets this week was 149.54 yuan and 279.65 yuan respectively, both showing a downward trend. The price is expected to remain strong in the short term, but the overall supply - demand pattern has not changed fundamentally [91]. - **Slaughter Gross Profit and Feed - to - Meat Ratio**: No specific analysis provided. - **Pig - Grain Ratio**: The pig - grain ratio this week was 5.13, a week - on - week increase of 3.89%. The market has returned to the third - level early - warning range. The pig - grain ratio is expected to fluctuate little next week [98].

Core Viewpoint - The overall demand for live pigs during the National Day holiday showed a "peak season not prosperous" trend, with prices declining and supply pressures expected to persist post-holiday [1][3]. Supply and Demand Dynamics - After the National Day holiday, the supply pressure in the live pig market is unlikely to ease, leading to a significant imbalance between supply and demand, with the average price of live pigs reported at 10.95 yuan/kg, a year-on-year decrease of 38.96% [1][3]. - The futures market for live pigs saw a decline, with the main contract hitting a record low of 11,120 yuan/ton on October 13, indicating a pessimistic market sentiment regarding future supply and demand dynamics [3]. Policy and Regulatory Environment - The Ministry of Agriculture and Rural Affairs has held multiple meetings to promote high-quality development in the pig industry, suggesting measures such as reducing the number of breeding sows and controlling new production capacity [4]. - A significant policy directive was issued requiring the top 25 pig farming enterprises to reduce their breeding sows by 1 million heads by the end of January 2026, representing about 10% of their current stock [4]. Current Industry Metrics - As of August 2025, the national breeding sow stock was reported at 40.38 million heads, slightly above the normal range, indicating a temporary oversupply situation [5]. - The production efficiency in the pig farming industry has improved, with the average number of weaned piglets per sow increasing from 24 to over 26, leading to prolonged capacity cycles [5]. Market Behavior and Trends - Due to falling prices, many large-scale enterprises are accelerating their slaughtering processes to mitigate losses, resulting in a 3% increase in daily slaughter volumes post-holiday [6]. - The current market shows a decline in both the operating rates and slaughter volumes of sample enterprises, indicating insufficient consumer demand to absorb the increasing supply [6]. Future Market Outlook - The supply of live pigs remains excessive, and weak downstream demand is expected to keep prices under pressure, with short-term price fluctuations likely to continue [7]. - Seasonal demand may increase towards the end of the year, but the overall market is anticipated to maintain a trend of supply growth outpacing demand growth, with prices expected to remain low even during traditional peak seasons [7].

Core Viewpoint - The recent decline in live pig prices indicates an oversupply in the market, driven by increased production capacity and insufficient reduction of breeding sows, making it difficult for prices to recover even with seasonal demand increases [2][3]. Price Trends - Since October, live pig prices have dropped significantly, with the average price falling to 12.90 yuan/kg, a decrease of 2.8% week-on-week and 29.5% year-on-year [1]. - Futures prices have also declined, with near-month contracts approaching 11,000 yuan/ton and a drop of over 9% since October [1]. Supply and Demand Dynamics - Analysts indicate that the supply of live pigs remains high, with significant outflow volumes leading to losses for enterprises, which is typical in cyclical industries [2]. - The market is currently experiencing a dual loss situation for both piglets and fattening pigs, with an increase in the sentiment to cull breeding sows, although the pace of capacity reduction is still below expectations [3][4]. Industry Response and Capacity Adjustment - The government has initiated measures to reduce breeding sow numbers, aiming for a decrease of 1 million by the end of the year, but the actual reduction has been limited, with many enterprises only making minor adjustments [4]. - Major companies like Muyuan Foods have responded positively to capacity reduction calls, but smaller firms have not shown significant reductions, leading to an overall slower pace of capacity adjustment in the industry [4]. Future Outlook - If the reduction in breeding sow capacity accelerates, it could lead to a decrease in fattening pig supply by August 2026, but the market may face oversupply until then [5]. - The price of live pigs is expected to fluctuate based on the rhythm of market supply and demand, with potential price points unlikely to exceed 14 yuan/kg or drop below 10 yuan/kg without panic selling [5].

Core Viewpoint - The pig market is experiencing significant price declines, with both spot and futures prices hitting new lows due to oversupply and insufficient capacity reduction in the industry [1][2][4]. Price Trends - As of the first week of October, the average price of live pigs in China was 12.90 yuan/kg, down 2.8% week-on-week and 29.5% year-on-year [1]. - Futures prices for near-month contracts have approached 11,000 yuan/ton, with a decline of over 9% since October [1][2]. Supply and Demand Dynamics - The supply of live pigs has exceeded market expectations, leading to a fundamental shift from profitability to losses in the industry since September [2][3]. - Analysts indicate that the current market conditions suggest a prolonged period of oversupply, with limited potential for price recovery even with seasonal demand increases [1][3]. Capacity Adjustment - The industry is facing a dual loss situation for both piglets and fattening pigs, with an increase in the sentiment to cull sows, but the pace of capacity reduction remains slower than expected [3][4]. - Some leading companies have responded to calls for capacity adjustment, but many smaller firms are either making minor adjustments or maintaining a wait-and-see approach [4]. Future Outlook - If the reduction in sow capacity begins to materialize in October, it could lead to a decrease in fattening pig capacity by August 2026, but the market may still face oversupply until then [4]. - The price of live pigs is expected to fluctuate, with a potential high point unlikely to exceed 14 yuan/kg and a low point unlikely to drop below 10 yuan/kg without panic selling [4][5]. Market Sentiment and Policy Impact - The government has been actively involved in regulating the industry, with multiple meetings held to discuss capacity control, indicating a commitment to stabilizing prices [3][4]. - Analysts suggest that while the current price levels are under pressure, government policies aimed at guiding reasonable price recovery may shorten the duration of the current pressure period [5].

Core Viewpoint - The holiday consumption effect on pig prices is weakening, with prices continuing to decline despite the recent holidays [1][2][3] Price Trends - The average national pig price was 12.90 yuan/kg in the first week of October, down 2.8% from the previous week and 29.5% year-on-year [1][2] - Prices have dropped over 22% compared to the beginning of the year, reaching a low point for the year [1] - As of October 13, the average price for external three-yuan pigs was 10.81 yuan/kg, indicating a slight daily decrease [1][2] Supply and Demand Dynamics - The supply of pigs remains abundant, with a significant number of breeding sows still in operation, leading to a challenging market for price recovery [3][6] - Analysts predict that the demand for pigs may improve in November due to cooler weather and seasonal activities, but overall supply is expected to outpace demand [2][7] Industry Response - The Ministry of Agriculture has emphasized the need for strict production capacity controls, aiming to reduce the number of breeding sows by approximately 1 million [6] - Some companies have begun to adjust their production strategies, including reducing the number of breeding sows and managing the weight of pigs being sold [6][7] Profitability Concerns - The ongoing decline in pig prices has significantly impacted the profitability of pig farming, with losses reported for self-breeding and pig fattening operations [5][6] - Smaller farming operations are facing the most pressure due to higher costs, while larger enterprises are better positioned to manage risks [5][6] Future Outlook - Analysts suggest that while there may be short-term price stabilization, the overall supply situation will limit significant price increases in the near future [5][7] - The market is expected to remain under pressure until production capacity adjustments take effect, with a potential for improved demand in the winter months [7]

Core Viewpoint - After the National Day and Mid-Autumn Festival holiday, live pig futures prices continue to decline, reaching new lows due to the concentrated release of previously held pigs by small and medium-sized farming entities and sales driven by pandemic-related pressures [1][2] Supply Side - The government has emphasized guiding reasonable price recovery, initiating capacity reduction in the pig industry since late May. From June to August, large-scale farming entities significantly increased their slaughter volumes, but prices did not show a notable decline due to winter pandemic impacts and small-scale farmers holding back pigs [2] - Small-scale farmers typically purchase piglets for batch fattening, and the current slaughtered pigs are mainly those replenished in the spring. As inventory decreases, the number of pigs available for slaughter from small-scale farmers will decline [2] Demand Side - Post-holiday, tourism consumption has cooled, and household demand remains weak, leading to an overall decline in demand. Major slaughterhouses have limited new orders, and their operating rates are expected to decrease [2] Policy Measures - In 2023, the government has held multiple meetings to discuss capacity regulation in the pig industry, with a focus on reducing the breeding sows by 1 million by the end of January 2026 among 25 major enterprises. A cross-departmental coordination mechanism will be established to enforce regulations [1] - The Ministry of Ecology and Environment will enhance pollution supervision, while the Financial Regulatory Bureau will restrict credit for capacity expansion. The Ministry of Finance will eliminate subsidies that stimulate capacity growth, marking a shift from guiding measures to rigid enforcement [1] Market Outlook - In the medium term, indicators reflecting piglet supply and demand suggest that pig prices may continue to face pressure in the next three months. The increase in large-scale farming has led to a significant rise in their share in the front-end production, while small-scale farmers focus more on downstream fattening, stabilizing basic production capacity but highlighting production efficiency impacts [4]

Core Insights - The continuous decline in pig prices has created significant challenges for pig farming companies, with prices dropping to a new low of 11.20 yuan/kg, below the cost line of 13-14 yuan/kg for most producers [2][3][6] - Major companies like Wen's Foodstuffs and New Hope are adopting a "volume compensates for price" strategy, but this has not mitigated the impact of falling prices [2][6] - The tightening of financing options due to policy changes is exacerbating the cash flow issues faced by some pig farming companies, leading to a survival-of-the-fittest scenario in the industry [9][11] Industry Overview - As of October 11, the national average price for live pigs was 11.20 yuan/kg, reflecting a 15.92% month-on-month decline and a 38.36% year-on-year drop [3] - The industry is experiencing widespread losses, with many companies forced to sell off stock due to oversupply, leading to a grim outlook for the future [8][12] - The government has implemented measures to control pig production capacity, aiming to stabilize prices and reduce the number of breeding sows [9][12] Company Performance - Major pig farming companies reported declining sales and revenues in September 2025, with examples including: - Muyuan Foods sold 5.573 million pigs, generating 9.066 billion yuan in revenue, with an average price of 12.88 yuan/kg, all showing declines from August [7] - Wen's Foodstuffs sold 3.3253 million pigs, with a revenue of 4.975 billion yuan and an average price of 13.18 yuan/kg, also reflecting declines [7] - New Hope sold 1.3942 million pigs, generating 1.746 billion yuan in revenue, with an average price of 12.89 yuan/kg, showing significant year-on-year declines [7] Market Dynamics - The market is entering a phase of weak demand and strong supply, with an increase in planned slaughter numbers for October, indicating continued pressure on prices [12] - Analysts predict that the fourth quarter will be crucial for the performance of listed pig farming companies, with price recovery largely dependent on the effectiveness of production capacity controls [12][13] - The ongoing price decline is expected to lead to a reduction in production capacity, although the timing and extent of this adjustment remain uncertain [13]

Core Viewpoint - Muyuan Foods announced a cash dividend distribution plan for the first half of 2025, totaling 5 billion yuan, which reflects a strong financial performance and commitment to shareholder returns [1][3][5]. Dividend Distribution - The dividend distribution plan is based on a total share capital of 5.393 billion shares, excluding repurchased shares, with a payout of 9.275214 yuan per 10 shares, amounting to a total of 5 billion yuan (including tax) [1][3]. - The record date for the dividend is October 15, 2025, and the ex-dividend date is October 16, 2025 [3]. Financial Performance - In the first half of 2025, Muyuan Foods achieved a revenue of 76.463 billion yuan, representing a year-on-year increase of 34.46%, and a net profit attributable to shareholders of 10.530 billion yuan, a significant year-on-year growth of 1169.77% [5]. - The total dividend of 5 billion yuan accounts for 47.50% of the company's net profit for the half-year [5]. Sales and Market Trends - In September 2025, Muyuan Foods sold 5.573 million pigs, showing a year-on-year change of 11.05%, with an average selling price of 12.88 yuan per kilogram, down 30.94% year-on-year [10]. - The company sold a total of 11.571 million piglets from January to September 2025, with an adjusted forecast for piglet output increased to between 12 million and 14.5 million [7]. Industry Outlook - The agricultural sector anticipates a cautious optimism regarding future pig prices, with expectations of increased demand during the Mid-Autumn and National Day holidays, potentially stabilizing prices [8]. - The company is actively adjusting its breeding stock and managing pig weights to balance market supply and demand, aiming to stabilize pig prices and support the healthy development of the pig industry [9].

Core Viewpoint - The company announced a profit distribution plan for the first half of 2025, with a total cash dividend of 5.002 billion RMB, while also reporting a significant increase in pig sales volume but a decline in sales revenue due to lower prices [2][3]. Group 1: Profit Distribution - The company plans to distribute 9.275214 RMB per 10 shares to shareholders, totaling 5.002 billion RMB [2]. - The record date for the dividend is October 15, and the ex-dividend date is October 16 [2]. - The adjusted cash dividend per share is calculated to be 0.9275214 RMB due to changes in total share capital [2]. Group 2: Sales Performance - In September, the company sold 5.573 million pigs, a year-on-year increase of 11.05%, but the average selling price dropped by 30.94% to 12.88 RMB per kilogram [2][3]. - The total sales revenue for September was 9.066 billion RMB, a year-on-year decrease of 22.46% [2]. - For the first nine months of the year, the company sold 57.323 million pigs, a 14.32% increase, with total sales revenue reaching 103.422 billion RMB, up 8.47% [3]. Group 3: Production Adjustments - The company is reducing the number of breeding sows to stabilize market supply and demand, with a target of 3.3 million sows by year-end [3]. - The company has stopped selling fattening pigs to secondary fattening customers to ensure all pigs are directed to slaughterhouses [3]. - The expected range for piglet output in 2025 has been adjusted from 8 million to 12 million to a new range of 12 million to 14.5 million [4]. Group 4: Cost Management - The company's production costs have decreased from 13.1 RMB/kg in January to 11.8 RMB/kg by July, attributed to improved production performance and reduced unit costs [3].