Investment Rating - The report maintains a positive investment rating for the pig farming sector, recommending specific companies such as Muyuan Foods, New Hope Liuhe, and Tianhong Biological [4][3]. Core Insights - The report highlights a significant drop in pig prices to 9.3 yuan per kilogram, with self-breeding and self-raising operations facing an average loss of nearly 350 yuan per head [3][4]. - The report anticipates a potential acceleration in industry capacity reduction due to ongoing losses and stricter policy controls [4][3]. - The average weight of pigs at slaughter has increased to 128.71 kg, indicating a slight upward trend in market dynamics [4][3]. - The report suggests that the pig farming industry is likely to experience a new cycle of price increases by the end of 2026, driven by policy implementation and capacity adjustments [4][3]. Summary by Sections Industry Overview - The agricultural sector index has decreased by 2.94% this week, underperforming compared to the Shanghai Composite Index [17][21]. - The report notes that the pig farming sector has been experiencing continuous losses, with a significant decline in prices and profitability [4][3]. Price Trends - The report details the current prices of various agricultural products, including a drop in corn prices to 2452.75 yuan per ton and stable soybean prices at 4277.37 yuan per ton [36][45]. - The average price of white feather parent stock has risen to 50.16 yuan per set, reflecting market fluctuations [5][7]. Market Dynamics - The report indicates that the pig farming industry is facing a tightening of production capacity regulations, with a proposed reduction in the breeding sow inventory to around 36.5 million heads [4][3]. - The report emphasizes that the valuation of pig farming companies is at historical lows, suggesting potential investment opportunities [4][3].

Core Viewpoints - The pig prices have entered a bottom area, with a focus on the water product seedling situation in April [1] - The report maintains a "Buy" rating for the agricultural, forestry, animal husbandry, and fishery sector [2] Market Review - In March 2026, the agricultural, forestry, animal husbandry, and fishery sector outperformed the CSI 300 index by 0.04 percentage points, with the sector declining by 4.38% compared to a 4.42% decline in the CSI 300 [18][19] - The livestock breeding sector experienced a smaller decline of 1.4% in March [18][22] Livestock Breeding - In March 2026, the national average price of live pigs was 10.06 CNY/kg, down 12.2% month-on-month and down 30.7% year-on-year [28][29] - The average loss for self-bred pigs in March was approximately 291 CNY per head, a decrease of 192 CNY month-on-month [31] - The average price of piglets was 23.6 CNY/kg, down 7.4% month-on-month [32] - The pig-to-feed ratio was 4.18, down 0.65 month-on-month [32] Feed and Animal Health - In March, the prices of aquatic products fluctuated, with a notable increase in feed prices due to rising raw material costs [6] - The report anticipates significant growth in the feed industry sales in March, driven by the upcoming spring seedling investment [6] - Leading feed companies are expected to expand their market share domestically and internationally due to their cost advantages [6] Dairy Cattle - As of March 19, 2026, the price of fresh milk in major production areas was 3.03 CNY/kg, down 1.9% year-on-year [6] - The industry is entering a destocking phase, with supply and demand expected to balance in the future [6] Key Company Valuation and Financial Analysis - The report highlights several key companies with strong financial metrics, including: - Wen's Foodstuffs Group (300498.SZ) with a target price of 18.55 CNY and a PE ratio of 21.41 for 2025E [7] - Muyuan Foods (002714.SZ) with a target price of 63.40 CNY and a PE ratio of 16.20 for 2025E [7] - Lihua Agricultural (300761.SZ) with a target price of 28.72 CNY and a PE ratio of 29.67 for 2025E [7]

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Insights - The report highlights that the current supply pressure in the live pig market is accelerating, with prices continuing to decline, reaching a new low of 9.37 CNY/kg as of March 27, 2026, down 0.50 CNY/kg from the previous week [3][14] - The report indicates that the demand side remains weak, with the national frozen product inventory rate rising to 19.57%, reflecting a shift from destocking to restocking [4][18] - The profitability of piglet farming has entered a loss zone, with the average profit per piglet sold dropping to -29 CNY, indicating a negative trend in market expectations for future restocking [5][26] Summary by Sections Weekly Observation - The report notes that the low pig prices are leading to increased slaughtering activity, with daily slaughter volumes up by 2.25% compared to the previous week, indicating strong willingness from farmers to sell [3][14] - The average weight of pigs being sold shows significant differentiation, with smallholders reporting an average weight of 145.68 kg, which is 9.04 kg higher year-on-year [3][14] Market Performance - The agricultural sector underperformed the broader market by 1.85 percentage points, with the agricultural index declining by 2.94% during the week [7][34] - Notable stock performances include West King Food (+13.88%), Huadong Holdings (+13.37%), and Yuehai Feed (+8.62%) leading the gains [7][34] Price Tracking - As of March 27, 2026, the national average price for live pigs was 9.39 CNY/kg, down 0.60 CNY/kg from the previous week, while piglet prices fell to 21.60 CNY/kg, a decrease of 1.52 CNY/kg [8][46] - The report also notes that the average profit for self-bred pigs was -344.24 CNY per head, reflecting a significant decline in profitability [8][47] Key News - A joint warning was issued by the Ministry of Agriculture and Rural Affairs and the China Meteorological Administration regarding the risk of farmland flooding due to expected heavy rainfall [6][42] - The report includes data on national feed production, which reached 5.185 million tons in January-February 2026, marking a year-on-year increase of 3.4% [6][42]

Investment Rating - The report maintains a positive investment rating for the pig farming sector, highlighting potential for price recovery due to stricter production capacity controls and historical low valuations of pig farming companies [2][4]. Core Insights - The average price of live pigs has dropped to 9.78 CNY/kg, reflecting a week-on-week decrease of 2.3%. A meeting of pig farming enterprises was convened to address the ongoing price decline and discuss future strategies [3][4]. - The report indicates that the average weight of pigs at slaughter has increased to 128.62 kg, which is a slight increase compared to previous years. This trend may indicate adjustments in farming practices and market conditions [4]. - The report anticipates a potential upward cycle in pig prices due to a projected reduction in the breeding sow population from 39.61 million to approximately 36.50 million, representing a decrease of 7.9%. This reduction is expected to support price recovery in the coming quarters [4]. - The valuation of major pig farming companies is currently at historical lows, with specific companies like Muyuan Foods and Wens Foodstuffs being highlighted as key investment opportunities [4]. Summary by Sections 1. Market Overview - The agricultural sector has seen a decline of 4.50% in the past week, underperforming compared to the broader market indices [17]. - The agricultural sector's market capitalization has decreased, with a current allocation of 0.39% in stock investments, which is below standard and historical averages [25]. 2. Livestock Data - The report notes that the price of live pigs has decreased significantly, with a current price of 9.78 CNY/kg, and a notable increase in average slaughter weights [4]. - The breeding sow population is expected to be reduced, which may lead to a tightening of supply and subsequent price increases in the pig market [4]. 3. Agricultural Products - Corn prices have shown a slight increase, with current prices at 2454.61 CNY/ton, while soybean prices remain stable at 4277.37 CNY/ton [35]. - The report highlights the importance of monitoring global supply and demand dynamics for corn and soybeans, as these will impact domestic prices and availability [43][47].

Investment Rating - The report suggests a neutral investment rating for the agricultural sector, indicating that the expected changes in the industry will be relatively stable compared to the broader market [70]. Core Insights - The agricultural sector index has underperformed compared to the Shanghai Composite Index, with a weekly decline of 4.50% [13]. - The report highlights ongoing pressures in the pig farming industry, with prices expected to continue declining due to supply-side pressures and a potential increase in slaughter volumes [3][21]. - In poultry farming, while white feather chicken prices remain under pressure, yellow feather chicken prices have shown resilience due to improved downstream demand [4][35]. - The beef market is anticipated to see price increases as it enters the consumption peak season, while dairy cow inventories are decreasing, indicating a potential recovery in milk prices [5][39][42]. - The planting sector is experiencing tight supply and demand dynamics, with corn prices showing slight upward movement amid external uncertainties [6][45][46]. - Feed prices have stabilized, and the aquaculture sector is showing signs of improvement in pricing [56]. Summary by Sections 1. Market Review - The agricultural index closed at 2928.56 points, down 4.50% week-on-week, underperforming the Shanghai Composite Index [13][14]. 2. Key Data Tracking 2.1 Pig Farming - The average price of live pigs is 9.90 yuan/kg, with a weekly decline of 1.79%. The average weight of pigs at slaughter is 128.62 kg, indicating a slight increase [21][22]. - The report anticipates further price declines in the short term due to supply pressures and ongoing losses in the sector [3][22]. 2.2 Poultry Farming - The average price for white feather chickens is 7.33 yuan/kg, showing a weekly increase of 1.66%. The profitability of parent stock and broiler chickens has improved slightly [34][35]. 2.3 Livestock - Live cattle prices in Shandong are 27.03 yuan/kg, with a year-on-year increase of 13.86%. The report expects beef prices to rise as the consumption season approaches [5][40][42]. 2.4 Planting Industry - Domestic corn prices are 2332.86 yuan/ton, with a slight increase of 0.18% week-on-week. The report notes potential improvements in the planting sector if there are significant reductions in grain production [6][45][46]. 2.5 Feed & Aquaculture - Feed prices for fattening pigs are 3.36 yuan/kg, showing a weekly increase of 0.30%. Aquaculture prices for various species have remained stable [56].

招商证券主要观点如下： 白羽鸡：节后毛鸡价格回落，鸡产品价格显著好于往年 2月主产区毛鸡均价7.49元/千克，同比+24%，环比-1.9%；鸡苗均价2.52元/羽，同比+19.2%，环比 +4.4%；鸡产品均价9300元/吨，同比+2.8%，环比+0.5%；毛鸡养殖端羽均亏损0.02元。本月鸡源相较充 足，但节后需求端承接有限，鸡价自春节后逐步小幅回落；而由于前期鸡苗成本处于低位水平，养殖端 仍有一定盈利；鸡产品价格显著好于往年。节后鸡苗供应量不大，种禽企业挺价意愿明显，支撑苗价向 好。 智通财经APP获悉，招商证券发布研报称，2月鸡源相较充足，但节后需求端承接有限，鸡价自春节后 逐步小幅回落；而由于前期鸡苗成本处于低位水平，养殖端仍有一定盈利；鸡产品价格显著好于往年。 节后鸡苗供应量不大，种禽企业挺价意愿明显，支撑苗价向好。春节期间黄羽鸡餐饮消费及家庭消费改 善，尤其节前慢速鸡价更为坚挺，而节假日期间快速鸡也保持着较好盈利。当前黄羽肉鸡出栏成本已回 落至低位，2月份头部养殖企业羽均盈利或已提升至2元左右，同时看好26年黄鸡高景气延续。 结合产能来看，当前父母代产能已降至历史偏低位水平，再加之2025年行业亏 ...

Core Viewpoints - The report indicates that pig prices are hovering at the bottom, suggesting a new cycle is beginning in the industry. The average price for lean pigs is currently 10.4 CNY/kg, which is a 0.1% increase week-on-week but a 28.4% decrease year-on-year, marking the lowest level since 2019 [6][14][25] - The report recommends focusing on leading companies with cost advantages, particularly large breeding enterprises such as Wens Foodstuffs Group and Muyuan Foods, while also highlighting potential turnaround candidates like Zhengbang Technology and smaller companies like Tiankang Biological and Shennong Group [6][14][15] Livestock Breeding - The report notes that the current cash flow pressure in the industry is exacerbated by rising feed costs, leading to cash flow losses for most breeding groups. The elimination of sows is expected to accelerate, initiating a capacity reduction phase [6][14] - The report emphasizes the importance of monitoring the recovery of the restaurant chain, which could benefit companies like San Nong Development and Yisheng Shares in the white feather chicken segment [6][14] Dairy Industry - The average price of fresh milk in major production areas is reported at 3.03 CNY/kg, a 1.6% decrease year-on-year, with a stable trend month-on-month. The report suggests that the overall increase in the proportion of breeding cows will help improve the supply-demand balance for raw milk [15][16] Feed and Animal Health - The report highlights that feed prices are rising due to increased fishmeal and soybean meal prices, which could impact the spring stocking of aquatic products. The report anticipates a structural differentiation in the aquaculture industry in 2026, which may increase competitive pressure on local and single-species feed companies [16][17] - Leading companies in the animal health sector are actively seeking breakthroughs in pet healthcare and synthetic biology, which could enhance industry profitability. Companies such as Reap Bio, Keqian Bio, and others are recommended for attention [16][17] Agricultural Sector Performance - The agricultural sector outperformed the market by 0.8 percentage points, with the agricultural products processing, livestock breeding, and planting sectors showing significant gains of 2.8%, 1.6%, and 1.1% respectively [23][24] - The report tracks key agricultural product prices, noting that corn prices increased by 1.2% to 2447 CNY/ton, while soybean meal prices rose by 8.3% to 3439 CNY/ton [17][25] Key Company Insights - Huazhong Holdings reported a significant increase in pig sales in February, with a 32.23% month-on-month increase and a 48.78% year-on-year increase, indicating strong sales performance despite price fluctuations [19] - Tianma Technology disclosed its eel output for February, with a total of 1163.92 tons, indicating a stable market for this product [20] - Zhongchong Co. announced the early redemption of its convertible bonds due to favorable stock performance, which may impact its capital structure [22]

Summary of Key Points from the Conference Call Industry Overview - The conference call discusses the poultry industry in China, specifically focusing on chicken production, market trends, and consumer behavior in 2025 and 2026 [1][2][3]. Core Insights and Arguments - **Production Growth**: In 2025, poultry production is expected to grow by 6% to 9.57 billion birds, with yellow-feathered chickens reversing a long-term decline, reaching an output of 3.54 billion birds [1][2]. - **Trade Surplus**: China is projected to achieve a chicken meat trade surplus for the first time since 2019, driven by a significant decrease in imports and an increase in exports [2]. - **Market Dynamics**: The consumption landscape is shifting from live poultry to supermarkets and online platforms, with brand companies achieving a comprehensive profit of 10 yuan per chicken [1][4]. - **White-feathered Chicken**: The output of white-feathered chickens is expected to exceed 10 billion birds in 2026, with a focus on meat quality rather than just feed efficiency [1][4]. - **Small White-feathered Chicken (817 Type)**: This segment is facing stagnation in growth due to declining consumer preference in southern markets, with potential production risks in the next 1-4 years if quality does not improve [1][4]. - **Duck Production**: Duck production is stabilizing in 2025, with positive market prospects in 2026 due to high-value by-products [1][4]. Additional Important Insights - **Cost Management**: The promotion of low-protein diets and the adoption of automation in farming are expected to enhance breeding efficiency and mitigate fluctuations in feed prices, thereby expanding profit margins [1][11]. - **Consumer Behavior Shift**: The transition from traditional live poultry markets to modern retail channels is reshaping consumer preferences, with younger generations favoring convenience and quality [9][10]. - **Impact of Pork Prices**: The current low pork prices are not expected to create significant supply gaps in the chicken market, as the production environment is stable and consumer demand is adjusting accordingly [5][6]. - **Genetic Stock Dynamics**: Fluctuations in the introduction of grandparent stock are not anticipated to significantly impact the overall capacity and pricing of commercial broilers [7][8]. - **Future Cost Pressures**: While feed prices may rise due to international factors, the industry is finding ways to offset these pressures through improved practices and efficiency [11]. This summary encapsulates the key points discussed in the conference call, highlighting the dynamics of the poultry industry in China and the factors influencing its growth and profitability.

Core Viewpoint - China Galaxy Securities emphasizes the dual strategy opportunities in the pig farming industry, predicting a year-on-year decline in pig prices for 2026, with potential rebounds during the year due to policy-driven capacity reduction and industry losses [1] Group 1: Pig Farming Industry - In January 2026, the Consumer Price Index (CPI) increased by 0.2% year-on-year, with food prices declining by 0.7%, and pork prices down by 13.7% year-on-year [1] - The pig price on February 11 was 12.75 yuan/kg, up 2.7% from the end of 2025, but the industry is facing losses, with self-breeding and external piglet farming profits at -159.65 yuan/head and 20.83 yuan/head respectively [3] - The number of breeding sows in China at the end of 2025 was 39.61 million, a decrease of 2.9% year-on-year, indicating potential accelerated capacity reduction in the industry due to ongoing losses [3] Group 2: Agricultural Index Performance - In February, the agricultural index underperformed the CSI 300, with a decline of 0.14%, while the breeding industry saw a relative increase of 1.02% [2] Group 3: Pet Food Industry - In December, China's pet food export value was 906 million yuan, down 2.91% year-on-year, with export volume increasing by 15.49% but average export price dropping by 15.93% [4] - For the year 2025, the total export value of pet food was 10.102 billion yuan, a decrease of 4.1% year-on-year, with export volume at 361,300 tons, an increase of 7.8%, and average export price down by 11% [4]

Summary of the Conference Call for Lihua Co., Ltd. Company Overview - **Company**: Lihua Co., Ltd. - **Industry**: Livestock and Poultry Farming Key Points Industry and Company Performance - **2026 Pig Production**: The company expects a 5% reduction in pig output due to policy adjustments, with a shift from piglet sales to fattened pig sales. The original target of 3 million pigs will be delayed [2][3] - **Cost Management**: By the end of 2025, pig farming costs reached 6 CNY/kg, with a further decrease to below 6 CNY/kg in January 2026, driven by improved production performance and capacity utilization [2][5] - **Broiler Chicken Production**: The growth rate for broiler chickens will be reduced to 6%-8% in 2026, down from double-digit growth, to better align supply and demand [2][7] Financial Performance - **Profitability**: In 2025, the pig segment became the main profit source, with 211,000 fattened pigs sold and a significant drop in sales price by approximately 20% year-on-year. Despite this, effective cost control allowed the company to maintain profitability [4][11] - **Slaughtering Operations**: The slaughtering volume is expected to reach 90 million chickens in 2026, with continuous improvement in operational results. Loss per chicken has decreased from 1 CNY to about 0.3 CNY in 2025 [2][7] Risk Management - **Hedging Plans**: The company has set a hedging plan with a maximum margin and premium of 300 million CNY, and a maximum contract value of 3 billion CNY on any trading day, primarily for risk hedging [2][5][6] Market Dynamics - **Chicken Pricing**: In 2025, the average price of broiler chickens fell by about 12%, leading to overall industry losses, although the company managed to remain slightly profitable [4][10] - **Future Outlook**: The company remains optimistic about long-term growth despite current challenges, citing that the "production limit" policy may not be sustainable in the long run [3][10] Capital Expenditure - **Investment Plans**: The company plans to maintain stable capital expenditures, focusing on the expansion of chicken and pig farming operations, including the construction of slaughterhouses and feed mills [14][15] Cost Structure - **Cost Breakdown**: The cost of broiler chicken production is approximately 5.5-5.6 CNY, with feed costs accounting for over 70% of total costs. The company anticipates a moderate increase in feed prices in 2026 [12][16] Production Capacity - **Production Structure**: In 2025, the company’s pig output structure was primarily based on self-built farms and partnerships with local farmers, with a focus on maintaining a sustainable self-breeding system [15] Conclusion - The company is navigating a challenging environment with strategic adjustments in production targets and cost management while maintaining a focus on long-term growth and profitability in the livestock sector [2][3][10]