: Recently, pork prices have continued to decline slightly, and the growth of production capacity in breeding enterprises has slowed down.

China Post Securities released a research report stating that this week the average national live pig price is 17.1 RMB/kg, a decrease of 1.58% from last week. Although individual farmers have a strong reluctance to sell, large groups maintain a normal pace of slaughter, and the market supply is sufficient. With the enthusiasm for restocking gradually declining and the off-season for consumption, pig prices have been continuously decreasing slightly in recent weeks. Currently, prices in many areas have fallen below 17 RMB/kg and temperatures are gradually dropping, so it is expected that there is limited downside potential in the future. Although the industry is still profitable in October, due to concerns about future pig price declines, autumn and winter diseases, etc., the growth of breeding enterprise capacity has slowed down. Therefore, the bank expects that the growth rate of live pig supply next year will be moderate. If the growth of live pig capacity in the fourth quarter remains slow, it will significantly benefit the market's confidence in next year's pig prices. It is recommended to focus on targets with outstanding cost advantages, while also considering growth potential. 1) Leading companies have high certainty and obvious cost advantages. It is recommended to pay attention to: Muyuan Foods (002714.SZ), Wens Foodstuff Group (300498.SZ). 2) Small and medium-sized enterprises have greater flexibility. It is recommended to pay attention to: Leshan Giantstar Farming&Husbandry Corporation (603477.SH), Zhejiang Huatong Meat Products (002840.SZ), etc. China Post Securities' main points are as follows: Market review: Significant increase Last week, the Shenwan Agriculture, Forestry, Animal Husbandry, and Fishing Industry Index rose by 6.04%, ranking 18th among the 31 Shenwan primary industries in terms of growth rate. Industries such as aquaculture and food security rose the most due to concerns about Sino-US trade relations; pig prices have been slightly decreasing recently, and the livestock breeding sector has seen a smaller increase. Pigs: Slight price decrease, slow capacity recovery This week, the national average live pig price is 17.1 RMB/kg, a decrease of 1.58% from last week. Although individual farmers have a strong reluctance to sell, large groups maintain a normal pace of slaughter, and the market supply is sufficient. At the same time, the enthusiasm for restocking has declined coupled with the off-season for consumption, resulting in a slight continuous decline in pig prices in recent weeks. Currently, prices in many areas have fallen below 17 RMB/kg, and temperatures are gradually dropping, so it is expected that there is limited downside potential in the future. Shenzhen Agricultural Power Group and Yongyi Information announced in October that the sow inventory ratios were +0.39% (previous value +0.53%) and +0.56% (previous value +0.60%), respectively. Although the industry was still profitable in October, the growth of breeding enterprise capacity has slowed down due to concerns about future pig price declines, autumn and winter diseases, etc. Slow capacity growth does not require overly pessimistic expectations for next year's pig prices. 1) The pigs currently on the market may not be as many as expected. According to Yongyi's statistics, the completion rate of large-scale enterprise slaughters in October reached 104.18%, with most group factories exceeding the slaughter plan; at the same time, the slaughter weight initially increased and then decreased. However, even if sales exceed the plan, pig prices remain strong. 2) Capacity growth may not be as large as expected by the market. According to data from the Ministry of Agriculture and Rural Affairs, as of September, the national sow inventory was only 40.62 million, a decrease of 4.20% year-on-year. The peak of this cycle's pig prices has passed, and it will face problems such as autumn and winter diseases, making it difficult to rapidly increase capacity in the fourth quarter. Therefore, the bank expects that the growth rate of live pig supply next year will be moderate. If the growth of live pig capacity in the fourth quarter remains slow, it will significantly benefit the market's confidence in next year's pig prices. It is recommended to focus on targets with outstanding cost advantages, while also considering growth potential. 1) Leading companies have high certainty and obvious cost advantages. It is recommended to pay attention to: Muyuan Foods (002714.SZ), Wens Foodstuff Group (300498.SZ). 2) Small and medium-sized enterprises have greater flexibility. It is recommended to pay attention to: Leshan Giantstar Farming&Husbandry Corporation (603477.SH), Zhejiang Huatong Meat Products (002840.SZ), etc. Broilers: Shortage of chicks, weak terminal demand In the week of November 8th, the price of Yantai chicks was 4.4 RMB per bird, unchanged from last week, with a profit of 1.5 RMB per bird; the average price of broilers was 3.80 RMB per kilogram, also basically unchanged from last week, with an expected loss of 1.2 RMB per bird. Since October, chick prices have remained high due to a limited number of overseas introductions in 2023 and difficulties in domestic breed sales; therefore, chick prices have strong support. Supply is sufficient for imports introduced in 2024, shortages of overseas breeds, and domestic efforts. From January to September this year, China's parent stock renewal amount was 1.0276 million sets, an increase of nearly 40,000 sets compared to the same period last year. However, in 2023 and from January to September 2024, imported breeds only accounted for 32%. China's only overseas introduction source is the United States, leading to a situation of scarce imported parent stocks and imported breed prices much higher than domestic ones. It is recommended to focus on the industry from two angles, upstream import enterprises and self-developed breeds of domestic species. Risk warning: Risk of animal disease outbreaks, risk of fluctuations in raw material prices.