Investment Rating - The investment rating for the poultry farming industry is "Strongly Recommended" for key companies such as Shengnong Development, Wens Foodstuff Group, and Lihua Co., Ltd. [4] Core Insights - The report highlights that the price of white feather chickens has reached a yearly high, significantly improving profitability in the breeding sector. The supply of chickens is tightening, and the impact of avian influenza on imports is expected to boost the breeding segment's outlook. Yellow feather chickens continue to maintain good profitability. [2][10][12] Summary by Sections White Feather Chicken - The average price of broiler chickens in December reached 7.44 yuan/kg, showing a year-on-year decrease of 1.5% but a month-on-month increase of 4.3%. The average price of chicken products was 9088 yuan/ton, down 2.4% year-on-year but up 2% month-on-month. The breeding sector saw a loss of 0.26 yuan per chicken, but profitability has improved significantly compared to the previous year. [10][11] - The average price of chicken seedlings in December was 3.54 yuan per chick, down 11.1% year-on-year but up 1.2% month-on-month. Major companies like Yisheng sold 61.74 million chicks, a year-on-year increase of 39.6%. [11] - The report notes that the import volume of grandparent stock white feather chickens in China decreased by over 10% year-on-year, and avian influenza outbreaks in France have further impacted imports, leading to a positive outlook for the breeding segment. [12][31] Yellow Feather Chicken - The average price of fast-growing yellow feather chickens in December was 4.24 yuan per jin, down 13.4% year-on-year and 12% month-on-month. The average price of Xueshan grass chickens was 7.93 yuan per jin, down 5% year-on-year but up 3.3% month-on-month. The winter season has improved consumption, maintaining good profitability in the breeding sector. [22][26] - The report indicates that the production capacity of parent yellow feather chickens has dropped to historically low levels, which, combined with prolonged industry losses, is expected to lead to a supply contraction and set the stage for price increases in 2026. [27][31] - The cost of raising yellow feather chickens has decreased, with major companies reporting costs around 5.7 yuan per jin for Wens and 5.5-5.6 yuan per jin for Lihua. A recovery in chicken prices is anticipated to significantly enhance profitability. [27][31] Investment Recommendations - The report recommends focusing on the breeding segment of white feather chickens, with Shengnong Development highlighted as a key investment opportunity. For yellow feather chickens, Lihua Co., Ltd. and Dekang Agriculture are recommended due to their favorable cost structures and potential for profitability in the upcoming period. [30][31]