1. Report Industry Investment Ratings No information about industry investment ratings is provided in the reports. 2. Core Views 2.1 Oils and Fats - In the palm oil market, due to the recovery of MPOA production and concerns about the slowdown in export growth, there is a risk of the crude palm oil futures stalling and falling around 4,800 ringgit. Domestically, with the strong performance of international crude oil futures, attention should be paid to whether the Dalian palm oil futures can effectively break through the 10,000 - yuan mark [1]. - For soybean oil, the Trump administration's order to increase the proportion of bio - fuels in gasoline and diesel in the US provides short - term upward momentum for CBOT soybean oil. In China, the plan of the Indonesian B50 biodiesel project and the decrease in domestic soybean oil inventory due to lower factory operating rates support the futures market, but the weak procurement and stable basis quotes show a mixed situation [1]. - Regarding rapeseed oil, market rumors of the second batch of Australian seed crushing commercial pilot opening and the increase in the proportion of palm - oil - blended diesel in Indonesia from 40% to 50% in 2026 have boosted the market. The Zhengzhou rapeseed oil 05 contract is in a wide - range shock around 9,800 yuan, with the upper pressure at 10,000 yuan. The spot market is in a wait - and - see state [1]. 2.2 Cotton - ICE cotton futures rose, reaching a six - month high, supported by the overall optimistic sentiment in CBOT grain futures, crude oil, and the stock market. In the Mississippi Delta, farmers may switch to more profitable soybeans due to low cotton prices and high input costs, and the cotton planting area may reach a ten - year low. The market estimates the planting area to be 9.229 million acres, lower than the previous expectation. In China, the high domestic - foreign cotton price difference limits the upside of domestic cotton. The "Golden March" peak season is ending, with fewer new orders for spinning mills, slower yarn de - stocking, and some mills reducing their operating rates. The "Silver April" order sustainability is uncertain, but the low downstream inventory provides support for cotton prices [2]. 2.3 Sugar - ICE raw sugar futures closed lower after reaching a five - month high. A moderate correction is expected after the 18% increase since early March. Thailand plans to use 150,000 tons of raw sugar for ethanol production. Brazil has the flexibility to adjust sugar production. Before the geopolitical situation eases, raw sugar prices may remain high and volatile. In China, the beet sugar production is in line with expectations, and the cane sugar production exceeds expectations. The domestic supply is strong and demand is weak, and the price is supported by futures, expected to remain high and volatile [4]. 2.4 Red Dates - The jujube market is in the consumption off - season, with light trading in the main sales areas. The prices are weakening, and the downstream demand is mainly for rigid needs. The inventory pressure is evident, and the futures warehouse receipts registration has decreased year - on - year. The short - term futures price is expected to remain low and volatile [6]. 2.5 Apples - The apple spot market shows a differentiated trend, with good - quality apples having firm prices and ordinary apples facing de - stocking pressure. The downstream Qingming Festival stocking is less than expected, and the apple shipment speed has decreased. The market sentiment has weakened due to capital withdrawal. The short - term futures price is expected to fluctuate and consolidate, and attention should be paid to the impact of weather in the main producing areas on the far - month contracts [7][11]. 2.6 Corn and Corn Starch - The current grain sales progress is slower than last year. With the warming temperature and the decline in futures prices, the enthusiasm of grain - holding entities to sell has increased. The continuous release of policy wheat and the expected auction of directional rice have weakened the bullish sentiment, and the price is under pressure. However, the price decline may be limited due to the strong price - holding attitude of traders. On the demand side, the deep - processing inventory has increased but is still low, and feed enterprises have rigid demand for corn, with an increasing substitution of wheat. In general, the short - term corn price is weak, but the limited remaining grain and the rigid demand of downstream enterprises support the price. Attention should be paid to the implementation of the directional rice release [15]. 2.7 Meal - US soybeans find support around 1,160 cents but lack upward momentum. After the bio - diesel policy is implemented, funds take profits. The crude oil price fluctuates due to the unclear situation in the Middle East. In China, the concerns about local shutdowns and supply continuity in the soybean meal market have been fully priced in, and the trading sentiment has cooled. The downstream inventory is relatively sufficient, and the spot trading volume has declined recently. Although the overall inventory is still not loose, the speculation sentiment is weak. There is a bearish expectation of an increase in soybean planting area, but the risk is relatively limited [17]. 2.8 Pigs - Pig prices show signs of stabilizing. The enthusiasm of secondary fattening in the north has increased significantly, while the south is still observing, which has a certain positive impact on market sentiment. The 05 contract of the futures market rebounded, but the far - month contracts are worried about the slow weight reduction and the decline in piglet prices. The current capacity reduction is slow, the supply of piglets is sufficient, and the enthusiasm of farmers to replenish piglets is lower than last year. Although the short - term market price may be boosted by secondary fattening sentiment, the high feed price and limited profit space for large pigs require further observation of the support for secondary fattening sentiment. The 05 contract may have bottomed out, but the far - month contracts may decline further under capacity pressure [19]. 2.9 Eggs - On the supply side, the number of old hens being culled by the breeding industry is increasing slightly, and the overall egg supply remains stable due to the high inventory of laying hens, the increase in newly - laid hens, and the resumption of laying by molting hens. On the demand side, as the Qingming Festival stocking comes to an end, the demand support weakens, the shipment speed in some production areas slows down, and the downstream is more cautious in purchasing. The overall egg market transaction is mediocre, and the egg price is expected to remain low and volatile [22]. 3. Summary by Directory 3.1 Oils and Fats - **Futures Prices**: On March 30, the price of Y2605 soybean oil futures was 8,714 yuan, up 0.30% from March 27; the price of P2605 palm oil futures was 9,768 yuan, up 1.66%; the price of OI605 rapeseed oil futures was 9,891 yuan, up 0.14% [1]. - **Spot Prices**: The average price of soybean oil in Jiangsu was 8,980 yuan, down 0.11% from March 27; the price of 24 - degree palm oil in Guangdong was 9,930 yuan, up 0.36%; the price of third - grade rapeseed oil in Jiangsu was 10,304 yuan, down 0.02% [1]. - **Basis**: The basis of Y2605 soybean oil was - 36 yuan; the basis of P2605 palm oil was - 235 yuan; the basis of OI605 rapeseed oil was 413 yuan [1]. - **Inventory**: The inventory of palm oil in China was 1.4 million tons, the inventory of soybean oil in Chinese crushing plants was 1.2072 million tons, and the inventory of rapeseed oil in coastal crushing plants was not clearly stated [1]. 3.2 Cotton - **Futures Market**: On March 31, the price of cotton 2605 was 15,385 yuan/ton, down 0.23% from the previous value; the price of cotton 2609 was 15,515 yuan/ton, down 0.19%. The 5 - 9 spread was - 130 yuan/ton, down 4.00%. The main contract's open interest was 515,084 lots, down 3.03%. The number of warehouse receipts was 12,435, up 0.01%, and the valid forecasts were 371, up 9.44% [2]. - **Spot Market**: The Xinjiang arrival price of 3128B cotton was 16,656 yuan/ton, up 0.02%; the CC Index of 3128B was 16,823 yuan/ton, up 0.05%; the FC Index of M: 1% was 13,489 yuan/ton, up 1.65% [2]. - **Industry Situation**: The commercial inventory was 0.00 million tons, down 100.0% from the previous value; the industrial inventory was 102.40 million tons, up 14.5%. The import volume was 16.65 million tons, down 19.0%; the bonded area inventory was 47.10 million tons, up 9.8%. The yarn inventory days were 21.45 days, down 1.2%; the grey fabric inventory days were 33.24 days, up 0.3%. The spinning mill C32s immediate processing profit was - 2,225.30 yuan/ton, down 0.4%. The retail sales of clothing, footwear, and textiles were 166.10 billion yuan, up 7.7%; the year - on - year growth rate of clothing, footwear, and textiles was 0.60, down 82.9%. The export value of textile yarns, fabrics, and products was 1.1383 billion US dollars, down 9.5%; the export value of clothing and clothing accessories was 1.1061 billion US dollars, down 19.9% [2]. 3.3 Sugar - **Futures Market**: On March 31, the price of sugar 2605 was 5,441 yuan/ton, down 0.42% from the previous value; the price of sugar 2609 was 5,467 yuan/ton, down 0.36%. The 5 - 9 spread was - 26 yuan/ton, down 13.04%. The main contract's open interest was 304,083 lots, down 2.81%. The number of warehouse receipts was 16,862, up 3.18%, and the valid forecasts were 0, down 100.00% [4]. - **Spot Market**: The price in Nanning was 5,480 yuan/ton, up 0.18%; the price in Kunming was 5,325 yuan/ton, unchanged. The Nanning basis was 39 yuan/ton, up 550.00%; the Kunming basis was - 116 yuan/ton, up 16.55%. The price of imported Brazilian sugar (within the quota) was 4,364 yuan/ton, down 0.43%; the price of imported Brazilian sugar (outside the quota) was 5,540 yuan/ton, down 0.45% [4]. - **Industry Situation**: The cumulative national sugar production was 9.26 million tons, down 4.69% year - on - year; the cumulative national sugar sales were 3.45 million tons, down 27.39%. The cumulative sugar production in Guangxi was 5.6513 million tons, down 8.36%; the sugar sales in Guangxi were 1.6223 million tons, up 20.16%. The national cumulative sugar sales rate was 37.30%, down 23.72%; the cumulative sugar sales rate in Guangxi was 35.25%, down 24.60%. The industrial inventory of sugar in Yunnan was 795,900 tons, up 17.42%. The sugar import volume was 240,000 tons, up 1100.00%. The national industrial inventory was 5.81 million tons [4]. 3.4 Red Dates - **Futures Market**: On March 31, the price of jujube 2605 (main contract) was 8,775 yuan/ton, down 1.07% from the previous value; the price of jujube 2607 was 8,960 yuan/ton, down 0.44%; the price of jujube 2609 was 9,160 yuan/ton, down 0.65%. The 5 - 7 spread was - 185 yuan/ton, down 42.31%; the 5 - 9 spread was - 385 yuan/ton, down 10.00%. The open interest was 165,841 lots, down 1.70%. The number of warehouse receipts was 4,273, unchanged; the valid forecasts were 131, up 43.96%; the sum of warehouse receipts and valid forecasts was 4,404, up 0.92% [6]. - **Spot Market**: The price of Cangzhou's special - grade jujubes was 9,080 yuan/ton, down 0.22%; the price of first - grade jujubes was 7,900 yuan/ton, unchanged; the price of second - grade jujubes was 6,900 yuan/ton, unchanged. The basis of Cangzhou's special - grade jujubes to the main contract was - 295 yuan/ton, up 20.27%; the basis of first - grade jujubes to the main contract was 325 yuan/ton, up 41.30% [6]. 3.5 Apples - **Futures Market**: On March 31, the price of apple 2605 (main contract) was 9,863 yuan/ton, down 1.04% from the previous value; the price of apple 2610 was 8,763 yuan/ton, down 0.05%. The basis was - 1,525 yuan/ton, down 6.35%; the 5 - 10 spread was 1,100 yuan/ton, down 8.33%. The open interest was 81,103 lots, down 7.24% [7]. - **Spot Market**: The arrival volume at Chalong Fruit Wholesale Market was 25 vehicles, up 13.64%; the arrival volume at Jiangmen Fruit Wholesale Market was 11 vehicles, unchanged; the arrival volume at Xiaqiao Fruit Wholesale Market was 14 vehicles, up 7.69%. The national cold - storage inventory was 4.4179 million tons, down 5.69% [7]. 3.6 Corn and Corn Starch - **Corn**: On March 31, the price of corn 2605 at Jinzhou Port was 2,346 yuan/ton, down 0.97% from the previous value; the basis was 34 yuan/ton, up 209.09%. The 5 - 9 spread was - 32 yuan/ton, down 6.67%. The market price at Shekou Port was 2,480 yuan/ton, down 0.40%. The north - south trade profit was 9 yuan, down 68.97%. The Brazilian arrival duty - paid price was 2,366 yuan/ton, down 1.20%. The import profit was 114 yuan, up 19.70%. The number of remaining vehicles at Shandong deep - processing plants in the morning was 891, down 32.55%. The trading volume was 2,032,676 lots, down 1.04%. The number of warehouse receipts was 58,377, down 1.68% [15]. - **Corn Starch**: The price of corn starch 2605 was 2,737 yuan/ton, down 0.65% from the previous value; the average price of corn starch was 2,964 yuan/ton, down 0.10%. The basis was 227 yuan/ton, up 7.08%. The spot price in Weifang was 2,980 yuan/ton, down 0.67%; the spot price in Changchun was 2,850 yuan/ton, unchanged. The 5 - 9 spread was - 10 yuan/ton, up 33.33%. The 05 spread between starch and corn on the disk was 391 yuan/ton, up 1.30%. The Shandong starch profit was 13 yuan, up 85.71%. The open interest was 386,073 lots, up 0.23%. The number of warehouse receipts was 4,510, down 3.01% [15]. 3.7 Meal - **Soybean Meal**: The spot price of soybean meal in Jiangsu was 3,240 yuan, unchanged. The price of M2605 futures was 2,937 yuan, unchanged. The basis of M2605 was 303 yuan,

Investment Rating - The report maintains a "Strong Buy" investment rating for the company [1][3]. Core Insights - The company continues to solidify its cost advantages, with significant improvements in cash flow leading to a notable decrease in the debt-to-asset ratio and an increased willingness to distribute dividends [1]. - Due to industry losses and policy adjustments, a faster reduction in breeding sow capacity is expected, which may elevate the average price of pigs in 2026-2027, allowing the company to benefit from its low-cost advantage [1]. - The company reported a total revenue of 144.1 billion yuan in 2025, a year-on-year increase of 4%, while the net profit attributable to shareholders was 15.5 billion yuan, a decrease of 13% [2][6]. Financial Data and Valuation - The company’s total revenue is projected to be 130.3 billion yuan in 2026, reflecting a 10% decrease year-on-year, with a net profit of 7.2 billion yuan, a 54% decline [2][17]. - The earnings per share (EPS) is expected to be 1.25 yuan in 2026, with a price-to-earnings (PE) ratio of 36.3 [2][17]. - The company’s return on equity (ROE) is projected to be 9.0% in 2026, with a debt-to-asset ratio of 48.1% [2][17]. Shareholder Returns - In 2025, the company distributed a total cash dividend of 24.4 billion yuan, with a dividend per share of 4.27 yuan, reflecting a strong commitment to shareholder returns [6]. - The company’s operating cash flow improved to 30.1 billion yuan in 2025, demonstrating robust cash generation capabilities [6]. Market Performance - The company’s stock price is currently at 45.2 yuan, with a total market capitalization of 260.9 billion yuan [3]. - The company’s stock has shown a relative performance of 5% over the past month, but a decline of 12% over the past six months [5].

1. Report Industry Investment Rating There is no information about the report industry investment rating in the provided content. 2. Core Viewpoints of the Report - The core contradiction in the pig market last week was the structural mismatch between deep losses and the slow pace of capacity reduction, as well as the rhythm game between strong policy intervention and market - based clearance. The industry is facing double pressure from oversupply and weak demand [2]. - From the perspective of supply and demand fundamentals, the supply side is facing a "supply peak", while the demand side is extremely weak. Despite continuous losses for over five months, the reduction of breeding sow inventory is slow, and there is a dangerous time - lag between losses and capacity reduction [2]. - Different cost structures among breeding entities lead to a structural imbalance in the capacity reduction process. Policy intervention has a significant time - lag, and the divergence between feed costs and pig prices further erodes breeding profits [3]. - In the short - term, factors such as weak post - festival pork demand, the post - festival window for frozen pork storage, the narrowing of the standard - fat price difference, and the potential entry of secondary fattening when standard pig prices fall are the trading logics. In the long - term, policy - led reduction of breeding sow capacity and the increase in piglet prices due to early replenishment by farmers are the trading logics [5][9]. 3. Summary by Relevant Catalogs 3.1 Core Contradiction and Strategy Suggestions 3.1.1 Core Contradiction - **Supply - demand fundamentals**: The industry is experiencing double pressure from supply surplus and weak demand. The supply side has a high number of piglet births and high production efficiency, resulting in a large number of pig sales. The demand side is in the post - festival off - season, and secondary fattening and frozen meat storage are ineffective. The reduction of breeding sow inventory is slow [2]. - **Breeding entity behavior**: The cost difference among breeding entities leads to a structural imbalance in capacity reduction. Large - scale enterprises are reluctant to reduce production, while some small - scale farmers delay capacity clearance through secondary fattening [3]. - **Policy intervention**: Policy intervention has a time - lag, and the divergence between feed costs and pig prices further squeezes breeding profits [3]. 3.1.2 Speculative Strategy Suggestions - **Unilateral strategy**: For the main contract LH2605 of live pigs, a sell - call option (LH2605 - C - 12000) can be selected [12]. 3.1.3 Industry Customer Strategy Suggestions - **Price range prediction**: The price range of the main contract is predicted to be between 11,000 - 13,500, with a current volatility of 15.70% and a historical percentile of 44.89% over three years [14]. - **Risk management strategy**: The trend is expected to continue to bottom out, with the main contract oscillating between 9,500 - 11,000. The current basis is neutral, and it is recommended to wait and see. For the spread strategy, it is advisable to go long on the 05 contract and short on the 07 contract. Different hedging strategies are provided for inventory management and procurement management [14][15]. 3.2 Market Information 3.2.1 This Week's Main Information - **Positive information**: The government held meetings with pig - breeding enterprises, signaling a reduction in the normal inventory of breeding sows from 39 million to 36.5 million (a 7.8% decrease). It also required enterprises to adjust production capacity, and the central government initiated the purchase and storage of frozen pork [16]. - **Negative information**: The demand side is weak, and the prices of feed raw materials such as soybean meal and corn are rising. In March, the pig sales plan of sample enterprises increased by 17.63% month - on - month, and the inventory of breeding sows increased for two consecutive months [17]. 3.2.2 Next Week's Main Information Pay attention to the inventory of breeding sows, the average weight of pig sales, and the pig - grain ratio [17]. 3.3 Disk Interpretation 3.3.1 Price - Volume and Capital Interpretation The main 05 contract of live pigs opened at 10,220 yuan/ton at the beginning of the week and closed at 9,965 yuan/ton at the end of the week, a decrease of 255 points or 2.50%. The position decreased by 1,083 lots to 203,000 lots, indicating that the market is in a continuous bottom - seeking stage [18]. 3.3.2 Basis and Spread Structure Analysis - **Spread structure**: The live pig spread structure is in a Contango structure, mainly due to weak demand, falling spot prices, and the need for long - term inventory reduction. The ability of the peak season to boost demand remains to be seen [20]. - **Basis structure**: Due to continuous losses in the industry, farmers are accelerating sales to ease cash - flow pressure, increasing market supply. The near - month basis rebounds and then falls [23]. 3.4 Valuation and Profit Analysis - As pig prices fall, pig - breeding profits decline, and self - breeding and self - raising profits are in the red. Piglet prices fall due to weakening replenishment sentiment, and the gross profit of piglet sales decreases. The standard - fat price difference is still negative, and secondary fattening farmers are selling for profit. Slaughtering enterprises are in a continuous loss stage [25]. 3.5 This Week's Supply - Demand Situation 3.5.1 Supply - Side Situation - **Breeding sows**: The inventory of breeding sows decreased slightly, but overall remained stable. The PSY level decreased by 0.2 month - on - month, and the average price of culled sows decreased [31]. - **Pigs**: The sales volume of large - scale enterprises remained high, and the inventory was at a three - year high. The average weight of pig sales remained stable [33]. - **Piglets**: Piglet prices are relatively low compared to last year, showing a seasonal upward trend. This week, the gross profit of piglets recovered and is close to the break - even point [35]. - **Secondary fattening**: The standard - fat price difference strengthened this week, and the utilization rate of secondary fattening pens decreased [38]. - **Feed**: The prices of corn and soybean meal fluctuated, and the feed price remained stable this week [40]. 3.5.2 Demand - Side Situation - **Slaughtering**: The slaughter volume of slaughtering enterprises is at a multi - year high, the gross profit of pig slaughtering is weakening, and cold - storage inventory is increasing. Due to poor white - strip sales, slaughtering enterprises are forced to store meat. This week, slaughtering profits decreased month - on - month, and the average weight after slaughter did not change significantly [44]. - **Terminal consumption**: Terminal consumption remains weak. The fresh - sales rate of slaughtering enterprises is at a five - year low, and the white - hair price difference is the worst in the same period [46]. 3.5.3 Import - Export Situation - **Import**: The import volume is at the lowest level in the same period in the past five years [48]. - **Export**: The export volume is at the highest level in the same period in the past five years [52]. 3.5.4 Cost - Profit Situation - Pig - breeding profits are in the red, and the pig - grain ratio is fluctuating. The prices of corn and soybean meal are oscillating, and the cost of secondary fattening is relatively stable [58][59].

1. Report Industry Investment Rating No information provided in the content. 2. Core Viewpoints of the Report - The spot pig price in China continued to decline last week. The demand side showed significant off - season characteristics, and the supply side had a high enthusiasm for slaughter. The pre - accumulated pig sources were continuously released. With oversupply, the spot price dropped without resistance. The slaughter volume increased continuously during the week, and the weight was larger year - on - year and increased month - on - month. The fat - to - standard price difference slightly strengthened. It is expected that the pig price will remain weak but the decline will slow down [11][22]. - The reduction of sows since last year has been limited, resulting in a large theoretical supply in the first half of this year. Although the fundamentals will improve in the second half of the year, the improvement space is limited. The sow reduction progress has slowed down, but currently, both hog fattening and piglet prices are in the red, indicating that capacity reduction will probably accelerate. The progress of capacity reduction needs to be continuously monitored through weight, piglet price, and culled sow price [11][34]. - The downstream slaughter enterprises have limited enthusiasm for warehousing, and there is no obvious sign of increased demand. The slaughter volume may remain relatively stable, and its impact on the market is relatively limited [11][59]. - The slaughter scale is large and the weight is still increasing. The improvement space of the supply - side fundamentals is limited. Under the pessimistic expectation, there is no bottom - supporting force such as active frozen - product warehousing and concentrated second - fattening entry to break the negative cycle. The short - term spot price will remain weak. The premiums of all contracts on the futures market are still high, but the gaming pressure under high positions has also increased, and the near - term volatility has increased. The overall strategy is to consider short - selling on rebounds, and there is no value in going long on the far - end contracts. When the overall position is too large, attention should be paid to cashing in profits in time [11][12]. 3. Summary by Directory 3.1. Weekly Assessment and Strategy Recommendation - **Spot Market**: The domestic pig price continued to decline last week. The demand was in the off - season, and the supply side had high slaughter enthusiasm. The pre - accumulated pig sources were released, leading to an oversupply situation. The slaughter volume increased, and the weight was larger year - on - year and increased month - on - month. The fat - to - standard price difference slightly strengthened. The supply is still sufficient, but it may decrease briefly after the breeding end completes its plan at the end of the month. The demand sentiment is poor, and the bottom - supporting effect of second - fattening and frozen products is low. It is expected that the pig price will remain weak but the decline will slow down [11][22]. - **Supply Side**: The reduction of sows since last year has been limited, resulting in a large theoretical supply in the first half of this year. The sow reduction progress has slowed down, but capacity reduction will probably accelerate. The theoretical slaughter volume will remain high in the first half of the year, peaking in March. After April, although it will decline seasonally, the decline is small and the volume is still high year - on - year. The short - term supply is still in obvious excess [11][34]. - **Demand Side**: The downstream slaughter enterprises have limited enthusiasm for warehousing, and there is no obvious sign of increased demand. The slaughter volume may remain relatively stable, and its impact on the market is relatively limited [11][59]. - **Trading Strategy**: Hold short positions in the 05 and 07 contracts and gradually reduce positions at low prices. The profit - to - loss ratio is 2:1, and the recommended cycle is 2 months. The core driving logic includes inventory, weight, second - fattening, fat - to - standard price difference, and slaughter volume. The recommendation level is two - star, and it was first proposed on February 26th [13]. 3.2. Spot and Futures Market - **Spot Price Trend**: The domestic pig price continued to decline last week. The demand was in the off - season, and the supply side had high slaughter enthusiasm. The pre - accumulated pig sources were released, leading to an oversupply situation. The slaughter volume increased, and the weight was larger year - on - year and increased month - on - month. The fat - to - standard price difference slightly strengthened. The supply is still sufficient, but it may decrease briefly after the breeding end completes its plan at the end of the month. The demand sentiment is poor, and the bottom - supporting effect of second - fattening and frozen products is low. It is expected that the pig price will remain weak but the decline will slow down [11][22]. - **Basis and Spread Trend**: After the Spring Festival, the spot price opened sharply lower, and the recent pressure is still high. The futures market has turned into a premium structure, and the basis has turned negative. The weak spot price has led to a reverse spread in the monthly spread [25]. 3.3. Supply Side - **Reproductive Sows and Changes**: The reduction of sows since last year has been limited, resulting in a large theoretical supply in the first half of this year. The sow reduction progress has slowed down, but capacity reduction will probably accelerate. The progress of capacity reduction needs to be continuously monitored through weight, piglet price, and culled sow price [34]. - **Inventory and Slaughter**: The theoretical slaughter volume will remain high in the first half of the year, peaking in March. After April, although it will decline seasonally, the decline is small and the volume is still high year - on - year [43]. - **Sow Culling and Sales**: No significant information was summarized from the content. - **Slaughter Size and Proportion**: The proportion of small pigs in slaughter is generally not high, indicating that the current epidemic situation is generally controllable. The proportion of large pigs has decreased seasonally and is lower year - on - year, indicating that the current inventory of large pigs is not high [46]. - **Trading and Post - Slaughter Average Weight**: The short - term supply is still in obvious excess. Before the Spring Festival, enterprises did not reduce the weight enough, and the inventory accumulated during the Spring Festival. After the festival, the slaughter scale was not low, the price dropped, and the breeding was in the red. In this situation, the weight still increased month - on - month [50]. - **Import and Pig Feed Month - on - Month**: No significant information was summarized from the content. - **Second - Fattening and Pen Utilization**: No significant information was summarized from the content. 3.4. Demand Side - **Slaughter Volume**: The downstream slaughter enterprises have limited enthusiasm for warehousing, and there is no obvious sign of increased demand. The slaughter volume may remain relatively stable, and its impact on the market is relatively limited [59]. - **Slaughter Capacity Utilization and Gross Margin**: No significant information was summarized from the content. - **Spread and Price - Volume Relationship**: No significant information was summarized from the content. - **Fresh - Frozen Spread and Fresh Sales Rate**: No significant information was summarized from the content. 3.5. Cost and Profit - **Cost and Breeding Profit**: The breeding cost has been running at a low level. Recently, the piglet price has dropped significantly, and the purchase cost has also decreased. After the Spring Festival, the pig price has dropped sharply, and the breeding has turned into a loss state, which is slightly lower from a seasonal perspective [70]. 3.6. Inventory Side - **Cost and Breeding Profit**: The frozen - product inventory has increased slightly seasonally, and it is in a state of passive inventory accumulation month - on - month [75].

Investment Rating - The industry investment rating is "Leading the Market - A" and the rating is maintained [7] Core Views - The report highlights that the price of agricultural products may continue to rise, coupled with policy guidance that is expected to lead to a reduction in pig production capacity [1][2] - In the pig farming sector, strict policy controls combined with farming losses are prompting attention to the progress of breeding sows' reduction [22][23] - The poultry farming sector shows a mixed trend for white feather broilers, with fluctuating prices for live chickens [31] - The planting sector is optimistic about the trend of rising agricultural product prices due to the transmission of energy prices [4] Summary by Sections 1. Industry Overview - The agricultural sector increased by 1.01% this week, ranking 17th among the primary industries [15] - The livestock, feed, veterinary, agricultural processing, fishery, and planting sectors all experienced slight declines [18] 2. Industry Data Tracking 2.1 Pig Farming - The average price of live pigs is 10.06 yuan/kg, down 1.18% week-on-week and 2.40% over two weeks; the price of piglets is 379 yuan/head, down 10.19% week-on-week [21][22] - The average daily slaughter volume of pigs is 173,000 heads, with a week-on-week change of 23.74% [22] 2.2 Poultry Farming - The average price of white feather broilers is 7.33 yuan/kg, up 1.66% week-on-week; the price of meat chicken chicks is 3.20 yuan/chick, up 9.59% week-on-week [31] 2.3 Planting Sector - The average price of corn is 2453.27 yuan/ton, up 0.54% week-on-week; the average price of domestic wheat is 2595.63 yuan/ton, up 1.34% week-on-week; the average price of domestic soybeans is 4277.37 yuan/ton, unchanged [43][45] 2.4 Aquaculture Sector - The average price of carp is 20.00 yuan/kg, unchanged; the average price of crucian carp is 30.00 yuan/kg, unchanged; the average price of bass is 44.00 yuan/kg, down 4.26% [47]

- The report focuses on the investment value of the CSI All Index Agriculture, Forestry, Animal Husbandry, and Fishery Index (930910.CSI), which is a secondary industry index under the CSI All Index series, reflecting the overall performance of the agriculture sector in the A-share market[39][40][42] - The index adopts a fully replicated method to construct the investment portfolio, aiming to minimize tracking deviation and annualized tracking error, with a target of absolute daily tracking deviation not exceeding 0.2% and annualized tracking error not exceeding 2%[9][89] - The index's sample adjustment rules include semi-annual adjustments implemented on the next trading day after the second Friday of June and December each year, and temporary adjustments in special circumstances such as delisting or corporate restructuring[41][45] - The weighting and weight rules use adjusted market capitalization weighting, with a single stock weight cap of 15%, and the top two weighted stocks are highly concentrated[46][47] - The index's industry distribution is characterized by "core focus and diversified collaboration," with a significant tilt towards two popular sub-sectors: pig farming (47.41%) and seed planting (15.52%), reflecting the core value and investment potential of these sectors[51][52] - The index demonstrates strong cyclical attributes, with a long-term annualized return exceeding 12% over the past 20 years, significantly outperforming broader indices like the Shanghai Composite Index and CSI 300[67][68] - The agriculture sector's valuation is currently in a low-to-neutral range, with a PE-TTM of 24.56x as of March 2026, corresponding to a historical percentile of 27.06%, providing a certain safety margin[76][85]

Summary of Conference Call on Swine Industry Industry Overview - The swine industry is currently facing significant challenges, with pig prices dropping below 10 RMB/kg, reaching a nearly seven-year low, and some areas reporting prices below 9.5 RMB/kg. The average weight of pigs at market remains at a five-year high, indicating that inventory reduction is the primary focus, with no signs of price stabilization [1][1][1]. - The industry is experiencing an average loss of over 350 RMB per head, placing it in a historically deep loss zone [1][1][1]. Key Insights - The price of weaned piglets has seen a seasonal decline post-Chinese New Year, with current prices around 280 RMB per head. Exporting piglets is not profitable, leading some companies to incur losses on exports [1][1][1]. - Despite some demand for piglets from specialized fattening households and free-range groups, the price guidance before September is only around 12 RMB+, suggesting limited potential for price recovery, with risks of falling below cost levels again [1][1][1]. Cost Challenges - The industry has experienced rapid cost reductions over the past two years, primarily due to favorable conditions such as lower feed raw material prices and improved production efficiency from upgraded breeding stock. However, the industry now faces new challenges that may lead to rising costs [3][3][3]. - **Feed Price Increases**: Corn prices have risen nearly 10% year-on-year due to mold issues in North China, while soybean meal faces uncertainties related to customs and tariffs, keeping spot prices strong [3][3][3]. - **Production Efficiency Challenges**: The peak of production efficiency improvements from breeding stock replacements has passed, and during this low cycle, maintaining production, operations, disease control, and employee motivation becomes increasingly difficult, negatively impacting efficiency [3][3][3]. - **Capacity Utilization Issues**: Companies are unable to expand further, leading to underutilization of fattening capacity and difficulties in starting up delivered pig farms, which will affect cost amortization [3][3][3]. Market Outlook - The combination of losses across all segments of pig farming and rising costs suggests a clearer logic for accelerated capacity reduction. Companies with high costs and debt levels are likely to be the primary candidates for capacity exit [3][3][3]. - There is optimism for left-side investment opportunities in the sector, with recommended stocks including Muyuan, Wens, Dekang, Shennong, Tiankang, Lihua, and Juxing [4][4][4].

Investment Rating - The industry investment rating is maintained as "Positive" for the agricultural, forestry, animal husbandry, and fishery sector [5]. Core Insights - Post-holiday pig prices are accelerating downward, indicating imminent capacity reduction. The average prices for piglets, live pigs, and pork in February 2026 were 27.57 CNY/kg, 12.82 CNY/kg, and 23.73 CNY/kg, respectively, with month-on-month changes of 8.62%, -2.73%, and 1.43% [15][40]. - The supply side shows that the effective slaughter days in February were reduced due to the Spring Festival, leading to concentrated pre-holiday slaughtering and sufficient market supply. Post-holiday, the enthusiasm for slaughtering remains, with large-scale farms gradually resuming their slaughtering rhythm [18]. - Demand has weakened after the Spring Festival, entering a traditional off-season, with a decrease in the slaughtering rate by 8.22 percentage points to 28.02% in February [18][21]. Summary by Sections Industry Supply and Demand Performance - The agricultural and rural affairs department's monitoring indicates that pig prices are declining after the New Year, with the national average price for live pigs dropping to 10.40 CNY/kg by March 10 [15][40]. - The supply side is characterized by a sufficient market supply due to concentrated pre-holiday slaughtering and ongoing enthusiasm for slaughtering post-holiday [18]. - The demand side is facing challenges as consumption enters a traditional off-season, leading to sluggish sales [18]. Capacity Change Trends - As of December 2025, the number of breeding sows was 39.61 million, showing a decline compared to October. The industry is expected to enter a phase of deep losses, with cash flow pressures increasing for farming entities [22][28]. - The average loss per head for self-bred pigs is 283.15 CNY, while for purchased piglets, it is 118.18 CNY, indicating a deepening of industry losses [28] - The policy environment is tightening, with ongoing capacity reduction expected as the industry faces significant operational pressures [22][28]. Market Performance of Listed Companies - In February, the sales prices for major companies such as Muyuan, Wens, Zhengbang, and New Hope decreased by 7.80%, 8.86%, 7.07%, and 0%, respectively [31]. - The slaughter volumes for these companies also saw a decline, with Muyuan's volume dropping by 34.33% to 460,000 heads [34][38]. - The average slaughter weight increased slightly, indicating a potential slowdown in sales rhythm [34]. Future Market Outlook - The short-term outlook for pig supply is grim, with prices expected to continue to decline and losses accumulating. The industry is at a critical stage for capacity reduction, with opportunities for left-side layout [28]. - The industry index's price-to-book ratio is showing signs of bottoming out, suggesting potential for further upward movement [28]. - Recommended stocks include leading companies with cost advantages and high performance realization rates, such as Muyuan, Wens, Dekang, Tiankang, and Shennong Group [28].

1. Report Industry Investment Rating - Not provided in the content 2. Core Viewpoints - The LH2605 contract is expected to fluctuate weakly. There are both negative and positive factors affecting the market. Negative factors include supply pressure, weak demand, cost pressure, and pessimistic market sentiment. Positive factors include policy support, capacity reduction, seasonal factors, and cost support [6] 3. Summary by Directory 3.1 Futures Market - The daily hog futures price showed a unilateral decline. The opening price was 11,120 yuan/ton, the closing price was 10,810 yuan/ton, a decrease of 350 yuan/ton or 3.14%. The price fluctuation range was 10,805 - 11,125 yuan/ton, with a fluctuation amplitude of 320 yuan/ton. The trading volume reached 141,410 lots, and the open interest was 202,762 lots. The closing price was close to the daily low, indicating that the short - selling force in the market was dominant. The price broke below the important psychological level of 11,000 yuan/ton, and the technical aspect was weak [2] 3.2 Spot Market - The national hog spot price was generally in the range of 9 - 12 yuan/kg. The prices in the main producing areas were mostly around 10 yuan/kg, which had fallen below the industry's break - even line. The prices in the northwest region (Qinghai, Ningxia) were relatively high, in the range of 12 - 16 yuan/kg; the prices in the main producing areas of the Northeast and North China were relatively low, in the range of 9 - 11 yuan/kg; the price in Hainan was the highest, reaching 16 - 18 yuan/kg [4] 3.3 Influencing Factors - Seasonal demand: March is the off - season for pork consumption. After the Spring Festival, the demand has declined. Although the resumption of school and work in factories has some support for demand, it is limited. - Slow progress of capacity reduction: As of the end of December 2025, the national inventory of breeding sows was 39.61 million heads, higher than the normal reserve of 39 million heads, at the upper limit of the green regulation range (101.6%), and the capacity has not significantly shrunk, so the medium - and long - term supply pressure has not been alleviated. - Unchanged slaughter rhythm: In 2025, the cumulative number of hogs slaughtered throughout the year was 719.73 million heads. The concentrated slaughter behavior before the festival continued after the festival, and the willingness of the breeding side to slaughter was still strong. - Enhanced policy regulation expectation: The Ministry of Agriculture and Rural Affairs proposed that the target for the inventory of breeding sows may be further reduced to 36.5 million heads, a reduction of 3.11 million heads compared with the end of December 2025, and the expectation of capacity reduction has increased [5] 3.4 Market Outlook - Negative factors: Supply pressure (increase in slaughter volume, increase in average slaughter weight, inverted price difference between standard and fat hogs), weak demand (post - festival off - season for consumption, high slaughter volume but weakened stocking willingness), cost pressure (rising feed costs, intensified breeding losses), and pessimistic market sentiment (pessimistic industry expectations for the future, decline in piglet prices). - Positive factors: Policy support (strengthened regulation policies for breeding sows, price support from the reserve purchase policy), capacity reduction (deep industry losses will accelerate the reduction of inefficient capacity), seasonal factors (after the second quarter, as the supply pressure eases, prices are expected to gradually recover), and cost support (rising feed costs form a certain support for hog prices) [6]

Investment Rating - The report maintains a "Positive" investment rating for the agricultural sector [11] Core Insights - Recent declines in pig prices, with the lowest recorded at 10.2 CNY/kg in mid-March, have led to over five months of industry losses. This situation is expected to accelerate the elimination of breeding sows, initiating a market-driven capacity reduction in pig farming [2][6] - The competitive landscape in the pig farming industry is anticipated to improve, favoring companies with cost advantages and strong cash flow, which are expected to enjoy prolonged profit cycles. Recommended companies include Wens Foodstuffs Group, DeKang Agriculture, and Shennong Group [2][7] - Geopolitical issues are driving up planting costs in major agricultural regions, which may lead to rising prices for major agricultural commodities such as soybeans, corn, and wheat. Recent increases in soybean meal prices indicate a significant uptick in market conditions [6][9] Summary by Sections Pig Farming - As of March 13, 2026, the average price of pigs is 10.28 CNY/kg, down 31% year-on-year and 1% month-on-month. The price of weaned piglets has also decreased, with 7 kg piglets priced at 326 CNY/head, a 32% year-on-year drop [19] - The industry has faced over five months of losses, with cash flow pressures becoming increasingly evident. The current oversupply of pigs and the seasonal decline in consumption are likely to keep prices at the bottom for March and April [7][19] - The report emphasizes that high-cost farming entities will be the first to exit the market, highlighting the core competitiveness of low-cost farming enterprises [2][7] Beef Farming - Beef prices have been on the rise since 2026, with the price of fattened bulls at 25.79 CNY/kg, up 8% year-on-year. The price of calves has surged by 40% year-on-year, indicating a robust market [8][35] - The report suggests that the current cycle of beef farming may last over two years due to tightening global beef supply and the implementation of import quotas by the end of 2025 [8][42] Other Agricultural Products - As of March 13, 2026, corn prices are at 2329 CNY/ton, up 6% year-on-year, while soybean meal prices are at 3474 CNY/ton, showing a 10% month-on-month increase. Wheat prices have also risen by 6% year-on-year [65] - Geopolitical tensions are expected to continue influencing agricultural prices, with potential disruptions in trade routes affecting supply chains [6][9]