Core Viewpoint - The price of live pigs has reached a new low, prompting 25 major pig farming companies to be required to reduce production by 1 million heads by the end of the year, indicating a significant shift in the livestock farming sector [1][2] Group 1: Price Trends - As of mid-September, the price of live pigs (external three yuan) was 13 yuan per kilogram, marking a new low [1] - The main futures contract for live pigs (LH2511) fell to 12.595 yuan per kilogram, also a new low [1] - The average price of live pigs is now below the cost line for some farming enterprises, leading to widespread losses in the sector [1] Group 2: Production and Profitability - The profit from purchasing piglets was reported at -199.31 yuan per head, while self-breeding profits were at -24.44 yuan per head, indicating a return to losses after over 16 months of profitability [1] - The average weight of pigs at market has increased from 127.8 kg in August to 128.45 kg in September, suggesting higher supply levels [1] Group 3: Regulatory Actions - A meeting was held on September 16 by the Ministry of Agriculture and Rural Affairs and the National Development and Reform Commission, where 25 leading pig farming companies were instructed to reduce production [2] - The policy focus is on "controlling production and nurturing" while detailing the "controlling reproductive capacity" tasks for each farming entity [2] - The industry is expected to undergo accelerated capacity reduction due to the dual pressures of regulatory controls and losses [2] Group 4: Investment Opportunities - The livestock farming ETF (516670) has seen a net inflow of 117 million yuan over the past 10 trading days, indicating investor interest despite current market conditions [1] - The ETF closely tracks the livestock farming index, with approximately 60% of its weight in pig farming-related stocks, including major companies like Muyuan Foods and Wens Foodstuff Group [2]

开源证券分析指出，我国进口猪肉及猪杂碎中欧盟占比超50%，反倾销征收保证金或驱动国内猪价中枢上移。2025上 半年我国猪肉及猪杂碎进口量达115万吨，其中自欧盟进口量60万吨，欧盟占我国猪肉及猪杂碎进口量52%，伴随我国 对欧盟猪肉及猪杂碎进口产品征收保证金落地，进口猪肉成本抬升供给减少，有望驱动国内猪价中枢上移。 产业层面，猪价持续寻底。根据农业农村部数据，截至9月5日，猪肉平均批发价19.84元/公斤，处于近年来低位，机 构认为当前猪价或处于阶段性触底。 来源：Wind，截至2025.9.5 产能端，8月三方能繁母猪存栏环比微降。根据钢联统计，8月能繁母猪存栏量-0.80%，7月为持平。 值得关注的是，养殖板块整体估值仍处于低位。根据Wind数据，截至9月5日，中证畜牧养殖指数估值为2.72倍PB，处 于16%历史分位数，估值向上修复弹性较大。 9月8日，养殖板块早盘走强，截至发稿，立华股份涨超7%，晓鸣股份、金新农、神农集团涨超5%，新五丰、新希 望、牧原股份、巨星农牧等涨超4%。畜牧养殖ETF（516670）涨3.10%。 消息面上，据证券时报，商务部贸易救济调查局负责人就对原产于欧盟的进口猪肉及猪副 ...

Core Insights - The Ministry of Agriculture and Rural Affairs has initiated a meeting focused on the high-quality development of the pig industry, emphasizing the need to reduce production capacity, control operations, and lower the weight of pigs, marking a significant phase in capacity regulation [1][3]. Group 1: Production Capacity Management - The national target for the breeding sow inventory has been adjusted down by 1 million heads to alleviate supply surplus pressure [3]. - Measures include halting secondary fattening and controlling the market behavior to prevent excessive inventory [3]. - The target for the average slaughter weight is set around 120 kg to avoid overstocking and subsequent supply excess [3]. Group 2: Market Dynamics - As of July 30, the national average price of live pigs reached 6.98 yuan per jin, marking a new low for the year [5]. - Historical data indicates that if the breeding sow inventory decreases to 39 million heads, pig prices could rise by 11%-19% year-on-year in the fourth quarter, reflecting a price elasticity driven by supply improvements [7]. - The current valuation of the livestock sector is at a historical low, with the China Livestock Index at a price-to-book ratio of only 2.67, placing it in the 12th percentile historically [7]. Group 3: Industry Outlook - Low cost is identified as the core competitive advantage for listed pig companies to navigate the pig cycle, with a focus on companies that excel in cost control or have clear cost-reduction pathways [1][8]. - The recovery of livestock inventory is expected to gradually boost demand for feed, while the approaching high temperatures will lead to a sales peak for aquatic feed [1][9]. - The Livestock ETF closely tracks the China Livestock Index, with over 60% of its components related to pig farming, and nearly 40% encompassing upstream and downstream sectors such as vaccines and feed [10][14].

Core Viewpoint - The pig farming sector is experiencing a rebound driven by "anti-involution" policies, leading to significantly enhanced expectations for capacity optimization [1][4]. Group 1: Policy and Capacity Optimization - The core issue facing the pig industry is overcapacity, with the breeding sow inventory reaching 40.43 million heads as of June 2025, which is 103.7% of the normal holding level [4]. - Policies are being implemented to control production capacity, including a directive to reduce the breeding sow count by 1 million heads to a target of 39.5 million [6]. - The Ministry of Agriculture and Rural Affairs is monitoring the market, indicating a 0.8% decrease in the inventory of pigs over 5 months old in June, suggesting a potential reduction in pig output in July and August [6]. Group 2: Industry Restructuring and Competitive Advantages - The "anti-involution" policy is reshaping the competitive landscape, accelerating the exit of inefficient production capacities, which benefits quality listed pig companies [7]. - Cost competition is becoming crucial, with leading companies like Shennong Group, Muyuan Foods, and Wens Foodstuff Group achieving production costs as low as 12-12.5 yuan per kilogram, providing them with a long-term competitive edge [7]. - Recent earnings forecasts from 14 listed companies indicate that 11 expect profit increases, with Muyuan Foods projecting a 1190% year-on-year growth in net profit for the first half of the year [7][8]. Group 3: Market Performance and Investment Opportunities - The DCE pig futures surged by 1.67% on July 23, reaching a new high for the year, while the livestock farming ETF (516670) rose by 3.37% over the week, with a cumulative net inflow of 115 million yuan [1]. - The SW Agricultural, Forestry, Animal Husbandry, and Fishery Index's price-to-book ratio is approximately 2.53 times, still relatively low compared to historical levels, indicating potential for investment [1][4].

Core Insights - The Ministry of Agriculture and Rural Affairs convened major pig farming companies to discuss promoting high-quality development in the pig industry, signaling a shift towards efficiency rather than scale [1][2] - The industry is transitioning from a focus on scale to efficiency, with leading companies like Muyuan, Wens, and New Hope benefiting from cost reduction and efficiency improvements [3][4] - The government aims to stabilize pig prices and prevent overproduction, indicating a commitment to maintaining industry balance and supporting cost-effective producers [4][6] Industry Dynamics - The recent meetings and discussions reflect a clear "anti-involution" strategy, aiming to curb reckless expansion among high-cost producers [2][4] - The profitability of pig farming has been consistent for 14 months, with 11 out of 14 listed pig companies reporting positive performance in their semi-annual reports [3][4] - Large funds are increasingly investing in leading pig farming companies, as evidenced by significant inflows into the livestock farming ETF (516670), which has seen over 100 million yuan in recent investments [4][6] Market Trends - The ETF related to livestock farming shows strong upward momentum, indicating growing investor interest in the sector [6] - The government's proactive stance on industry regulation is expected to increase in intensity, reinforcing the trend towards prioritizing quality over quantity in production [4][6] - The focus on cost control and efficiency is likely to further enhance the competitive edge of leading companies in the pig farming sector [4][6]

Group 1 - The livestock farming ETF (516670) has recorded five consecutive days of gains, with a net inflow of 7.34 million in funds, indicating a strong attraction to the sector [2] - The revival of the pig sector is attributed to two main reasons: the implementation of anti-competitive policies and seasonal demand [4][5] - Recent government actions, including a reduction in production capacity and the first significant domestic frozen pork storage this year, have boosted market sentiment [4] Group 2 - Seasonal demand is increasing as the market anticipates price hikes for the upcoming Mid-Autumn Festival and National Day, leading to speculative investments [5] - Since February, pig prices have been fluctuating downwards, but supply has tightened since June due to government policies, resulting in a price increase of 8.5% from 14.06 yuan per kilogram to 15.25 yuan per kilogram [7] - Leading companies in the sector, such as Muyuan Foods, Wens Foodstuff Group, and New Hope Liuhe, are favored by investors due to their strong cost control and high output realization [7]

Group 1 - The A-share market shows a diverse range of hot sectors, with significant gains in aquaculture, pet economy, and synthetic biology [1] - In the ETF market, livestock-related ETFs have performed well, with an average increase of over 0.5% [1] - The Livestock ETF (159865) rose by 0.68% today, with a current price of 0.594 and a total share count of 5.805 billion [2][3] Group 2 - The livestock industry is undergoing a critical transformation towards quality improvement and efficiency, driven by the rural revitalization strategy [2] - The China Livestock Breeding Index, which tracks companies involved in feed, veterinary medicine, and livestock farming, has shown the best historical returns among agricultural indices [3] - Key weight stocks in the China Livestock Breeding Index include Hai Da Group (12.43%), Mu Yuan (10.03%), and Wen's Shares (9.79%) [4][5]

External Logic - The recent increase in tariffs by the US has led to a significant rise in agricultural prices, with the agricultural sector acting as a countermeasure to the tariffs [1][3] - The Wind反关税指数 surged by 11% on April 8, 2025, with the agriculture, forestry, animal husbandry, and fishery sectors making up the majority of this index [1] Internal Logic - The supply-demand dynamics in the livestock sector are expected to improve, particularly due to the ongoing "pig cycle," which indicates a cyclical change in pig prices [5] - As of February 2025, the number of breeding sows in China has decreased by nearly 7% since early 2023, indicating a trend of capacity reduction [5][7] Policy Perspective - The "Accelerating the Construction of an Agricultural Power Plan (2024-2035)" outlines a comprehensive strategy to enhance food security and modernize agricultural practices, with significant progress expected by 2027 [7] Profitability - The recovery in pig prices has positively impacted the financial performance of livestock companies, with牧原股份 reporting a revenue of 137.947 billion yuan in 2024, a year-on-year increase of 24.43% [8] - Other companies in the sector, such as温氏股份 and巨星农牧, have also seen substantial growth in net profits [9] Institutional Insights - According to开源证券, the tariff escalation is expected to benefit domestic agricultural prices, particularly pig prices, due to rising raw material costs and the impact of imported meat [11] - Long江证券 suggests that while the industry may be entering a phase of declining prices due to increased supply, the current low valuations present investment opportunities [11] ETF Overview - The畜牧养殖ETF (516670) closely tracks the中证畜牧养殖指数, which covers over 60% of the pig farming industry chain, including upstream and downstream components such as vaccines and feed [11]