Shen Wan Hongyuan: Accelerating the elimination of production capacity and gradually opening the key recommendation to lay out the pig breeding sector on the left
The Zhitong Finance App learned that Shen Wan Hongyuan released a research report saying that industry losses have intensified, production capacity is being accelerated and production capacity is gradually being accelerated, and the focus is on recommending the pig breeding sector on the left. Pig prices clearly rebounded before New Year's Day, mainly due to the reentry of the market at the end of the year, compounded by retail investors' reluctance to sell, which boosted pig prices. From the perspective of supply and demand, the current price increase is difficult to sustain. Looking ahead for 1-2 quarters, the trend of fluctuating pig prices at the bottom is clear, focusing on the progress of capacity reduction. Furthermore, after the pet sector experienced full adjustments in the early stages, it is recommended to pay attention to the valuation switch at the end of the year and the beginning of the New Year.
Shen Wan Hongyuan's main views are as follows:
Pig breeding: Increased pressure and secondary fattening combined with a recovery in consumption. Pig prices rebounded markedly before New Year's Day, but declined somewhat after the holiday season
According to Yongyi Consulting, the average sales price of three-yuan pigs nationwide on January 4 was 12.44 yuan/kg, +0.2% from week to week. Pig prices at the beginning of the week continued the upward trend of last week, mainly due to a decrease in the number of large pigs released in the early period, the widening spread in fertilizer prices driving farmers to push back on sales, and increased sentiment about secondary fattening, compounded by the significant recovery in consumption at low prices at the end of the year. Supply growth resumed after the New Year's Day holiday, and prices declined somewhat. Continued losses in the industry: the current self-breeding model is -10.29 yuan/head for fat pigs listed on a scale of 50 or less; profit from listing on a scale of 5000-10,000 heads is 28.31 yuan/head. Looking backwards, consumer demand for pickled pork etc. was strong before the Spring Festival, but the current pattern of abundant supply in the industry has not improved substantially. The industry will still face the fundamental reality of oversupply in the next 1-2 quarters. The bank expects pig prices to continue to bottom out and fluctuate; combined with the current average farming cost level of the industry, it is expected that farming losses will continue, and capacity cuts will still occur in trend. Investment analysis opinion: Poor pig prices during peak season are still an indisputable fact in the industry. Piglet and fat pig breeding continue to lose or gradually destroy industry confidence, speeding up the loss of industry capacity. At the same time, winter is a time of high incidence of aquaculture epidemics, and epidemic prevention may also face some pressure due to losses. Focus on accelerating the elimination of production capacity and catalyzing investment opportunities on the left side of the sector. Recommended attention: Muyuan Co., Ltd., Wen's Co., Ltd., Dekang Agriculture and Animal Husbandry, Tiankang Biotech, etc.
Beef cattle: Importing countries' quotas and additional tariffs have been implemented. Concerned about the rise in domestic beef prices
On December 31, the Ministry of Commodities announced the ruling on implementing safeguard measures for imported beef. It was decided to adopt safeguard measures for imported beef in the form of “national quotas and additional tariffs”, and to impose 55% tariffs on the portion exceeding the quota, with an implementation period of 3 years; for products originating in developing countries (regions), if their import share does not exceed 3%, and the total import share of these countries (regions) does not exceed 9%, the safeguard measures will not apply. It is expected that with the implementation of the new tariffs, the pressure on the domestic supply side of imported beef will decrease somewhat. According to Steel Union data, as of December 25, the price of fattening bulls nationwide was 25.47 yuan/kg, -0.24%, and the average price of calves was 31.62 yuan/kg, -1.34% week over week; the average price of beef in the national wholesale market was 65.92 yuan/kg, -0.11% week over week.
Broiler breeding: White feather broiler eggs have entered the incubation period, and downstream gains continue
According to Steel Union data, as of December 25, 2025, the average sales price of chicken seedlings for white feather broiler products was 3.37 yuan/feather, -0.6% from week to week. Some small factories gradually entered the suspension period in the second half of this week; the average sales price of white feather broiler chicken was 3.80 yuan/kg, +4.7% week to month, a new high during the year; the average sales price of chicken split products was 9663.7 yuan/ton, +3.2% week over week. Investment analysis opinion: Continued abundant supply of white chicken is still the theme word for 2025-2026. At the bottom, emphasis is placed on the development and long-term value of leading enterprises, focus on demand-side improvements, and it is recommended to focus on Shengnong's development.
Risk warning: Prices of pigs and broilers continue to be low; sales of independent pet food brands fall short of expectations; the farming epidemic has broken out.