Huachuang Securities: Pig companies listed in June continued to shrink and gradually saw a nonlinear loss in production capacity
The Zhitong Finance App learned that Huachuang Securities released a research report saying that production capacity is showing signs of accelerated decline, with a forward-looking layout at the bottom. Efficiency is superior to growth, and quality is superior to scale. Under the triple logic of loss, policy, and epidemic, the bank is gradually seeing a nonlinear decline in production capacity. According to data from the National Bureau of Statistics, by the end of June, there were 37.8 million breeding sows nationwide, a year-on-year decrease of 2.63 million, a decrease of 6.5%. The decline was 3.2 percentage points higher than in the first quarter. Basic production capacity is showing signs of accelerated decline. Although judging from the fundamentals of current supply and demand in the industry, pig prices may continue to fluctuate for a period of time, this is also to prepare for a reversal trend in the subsequent cycle, and the longer it takes to bottom out, the higher the certainty of subsequent reversals. Currently, sector valuations are low, and it is recommended to pay attention to allocation opportunities in the pig sector. In terms of stock selection, I still insist that this round of investment will be more focused, and the logic of stock selection will shift more from focusing on growth in the past to focusing on efficiency and value.
The main views of Huachuang Securities are as follows:
Release volume: The total number of pig companies released in June 18 decreased by 0.28% year-on-year and 6.23% month-on-month
The total number of pigs released by 18 sample pig companies in June, including Makihara and Wen's, was 158.456 million heads (of which 7 pig companies, Makihara, Wen's, Superstar, Shennong, Daikanong, Lihua, and Dekang, sold commercial pigs; Jingji Zhinong took the commercial pig release caliber in June '26, same as below), a decrease of 0.28% year-on-year and 6.23% month-on-month. The contraction was quite obvious. Among them, the top 5 releases were Makihara, Wen's, New Hope, Dekang, and Zhengbang, with 6.22,700, 2.57,900, 1.366,400, 1,029,900, and 952,700, respectively. The top 5 year-on-year growth rates were Tiankang (due to animal husbandry data starting in June), Zhengbang, Aonong, Shennong, and Tianbang, with growth rates of 64.38%, 40.00%, 37.64%, 34.82%, 33.14%, respectively. The top 5 growth rates released in the first half of this year were Zhengbang, Aonong, Jin Xinnong, Tianbang, and Shennong. The growth rates were 56.07%, 40.54%, 37.57%, 31.42%, and 30.96%, respectively.
Average sales price: The average sales price of commercial pigs from the 16 sample pig companies in June was 9.56 yuan/kg, down 33.26% year on year and 0.96% month on month
In June, the average sales price of commercial pigs from 16 sample pig companies, including Makihara and Wen's, was 9.56 yuan/kg, down 33.26% year on year and 0.96% month on month. Among them, the top 5 pig companies were Dongrui, Jingji, Lihua, Jin Xinnong, and Muyuan. The prices were 10.82 yuan/kg, 10.09 yuan/kg, 10.03 yuan/kg, 9.96 yuan/kg, and 9.69 yuan/kg, while Tiankang sold the lowest price at 8.80 yuan/kg. Of the 16 sample pig companies, a total of 9 had higher than average prices (Makiyuan, Wen's, Zheng Bang, Huatong, Dongrui, Jingji, Jinxinnong, Lihua, Dekang), and a total of 7 had lower than average prices (Superstar, Shennong, Xinwufeng, New Hope, Tianbang, Tiankang, and Dabeinong).
Average weight released: The average weight of commercial pigs released in June 8 was 126.17 kilograms
In June, the average weight of commercial pigs from 9 sample pig companies, including Makihara, was 126.17 kg (if data comparability is taken into account, the average weight of commercial pigs from these 5 pig companies, including Makihara, Shennong, New Hope, Dabeinong, and Lihua, was 124.20 kg, a year-on-year decrease of 0.83% and a decrease of 0.55% over the previous year). Among them, superstars had the highest average sales weight of 132.62 kg, followed by Dekang, with an average weight of 131.24 kg. In addition, pig companies that weighed above average weight also included Shennong (127.58 kg) and Lihua (127.41 kg). There were 4 pig companies that weighed below average weight. Among them, Muyuan's weight was 124.30 kg, down 2.11% from month to month, and Wen's weight was 124.45 kg, down 1.16% from month to month. New Hope's weight was 118.00 kg, down 0.45% from month to month. 0.17%. In June, the listing weight of most companies continued to decline to varying degrees.
Pig industry: commercial pig and piglet losses have narrowed
At the industry level, according to the National Bureau of Statistics, as of July 10, the average sales price of commercial pigs nationwide was 10.90 yuan/kg, up 13.5% month-on-month and 27.8% year-on-year. According to Yongyi Consulting, as of July 21, the sales price of weaned piglets was 271 yuan/head, up 4.2% month-on-month and 38.4% year-on-year. Also, as of the 3rd week of July, according to Yongyi Consulting and Monitoring, the profit of commercial pigs sold by self-breeding enterprises was -144.81 yuan/head, which has been losing money for 23 consecutive weeks. The average profit from selling piglets was -9 yuan/head, which has been losing money for 18 consecutive weeks. In terms of weight, as of July 23, according to Yongyi Consulting, the average weight listed in the industry was 128.15 kg/head, rising for 3 consecutive weeks. Also, according to the China Agricultural Information Network, as of July 17, the average weight after death in 16 provinces across the country was 88.31 kilograms, losing weight for 5 consecutive weeks. Furthermore, as of mid-July, the average utilization rate of secondary fattening barns in all provinces was 41.5%, up 14.4 pcts month-on-month and 10.9 pcts year-on-year down. As of July 23, the frozen goods inventory rate was 26.72%. After 14 weeks of continuous storage, shipping began for 7 consecutive weeks, but the frozen goods storage rate was still relatively high during the same period in history.
Risk warning: Fluctuations in pig prices, sudden large-scale uncontrollable epidemics, major food safety incidents, macroeconomic systemic risks, and trade frictions have caused large fluctuations in food prices.