GF Securities: Overall pig farming enterprises' sales continued to grow in September, focusing on potential industry catalytic factors.

GF Securities released a research report stating that the previous industry expansion effect has gradually manifested, with pig prices shaking and falling back in September. After the National Day holiday, pig prices accelerated their decline, with the national average price falling to around 11 yuan per kilogram, plunging the entire industry into a loss zone. The price of piglets is also declining rapidly, with Yon Consulting reporting that the price of 7-kilogram piglets in large farms has dropped to 183 yuan per head, a decrease of 43.5% compared to early September. Considering the upcoming 1-2 months as the off-season for stocking, it is expected that the price of piglets will continue to remain low. In terms of production capacity, the current industry is facing widespread losses, and with the impact of the "anti-inner cool" policy, the liquidation of pig production capacity is expected to accelerate. According to the Ministry of Agriculture, the inventory of sows in August decreased by 0.1% compared to the previous month. GF Securities' main points are as follows: Tracking of listed companies' slaughter: According to the monthly operating data announcements of various companies, in September 2025, the overall pig slaughter of listed companies increased compared to the previous month; in the first three quarters of 2025, the overall pig slaughter of listed companies increased by 30.7% year-on-year. In terms of slaughter structure, the demand for piglets during the off-season for stocking decreased, and the overall sales of piglets by listed companies in September decreased compared to the previous month; in terms of slaughter weight, the average sales weight of listed companies in September increased by 0.7% compared to the previous month. Slaughter volume: In September, the total number of slaughtered pigs by listed companies was 14.23 million, a decrease of 6.3% compared to the previous month, and an increase of 26.3% year-on-year; the total number of slaughtered pigs by listed companies after excluding Muyuan was 8.65 million, an increase of 17.6% month-on-month, and an increase of 38.8% year-on-year. In the first three quarters, the total number of slaughtered pigs by listed companies was 142.2 million, an increase of 30.7% year-on-year. In September, Muyuan Foods, Wens Foodstuff Group, New Hope Liuhe, and DEKON AGR respectively slaughtered 5.573 million (excluding piglets), 3.325 million, 1.394 million, and 0.84 million pigs, with month-on-month changes of -20.4%, +2.5%, +4.2%, and +3.4%, and year-on-year changes of +10.7%, +32.5%, +16.9%, and +36.4%. In the first three quarters, the cumulative slaughter volume of pigs (including piglets) by Muyuan Foods, Wens Foodstuff Group, New Hope Liuhe, and DEKON AGR increased by +37.9%, +28.3%, +0.5%, and +25.8% year-on-year. For medium and small-scale breeding companies, in September, Tangrenshen Group, Tecon Biology Co. Ltd, Yunnan Shennong Agricultural Industry Group, and Leshan Giantstar Farming & Husbandry Corporation saw month-on-month changes in slaughtered pig volume of +1.2%, +1.2%, +37.6%, and +0.8%, and year-on-year changes of +28.3%, -5.3%, +15.0%, and +42.8%; in the first three quarters, the cumulative slaughtered pig volume increased by +34.8%, +6.5%, +26.8%, and +63.9% year-on-year. Sales price: In September, the calculated average sale price of listed companies was 13.0 yuan per kilogram, a decrease of 6.12% compared to the previous month. Slaughter weight: In September, the calculated average slaughter weight of 11 listed companies was approximately 114.7 kilograms per head, an increase of 0.7% month-on-month. Fattening pigs and piglets are both in a state of loss, and the liquidation of production capacity is expected to accelerate. Investment advice: The current pig farming sector is facing widespread losses, with pig prices falling below the cash costs of most companies; at the same time, piglet sales are also in a state of loss. Considering the current industry's loss state, coupled with the background of the "anti-inner cool" trend in the industry, the liquidation of pig production capacity is about to kick off. It is crucial to pay attention to industry policies, winter epidemics, and other potential catalytic factors. In terms of potential targets, the current sector valuation is relatively low, and it is advisable to select leading companies with cost advantages. Large-scale breeding companies such as Wens Foodstuff Group (300498.SZ) and Muyuan Foods (002714.SZ) are highly recommended; DEKON AGR (02419) and New Hope Liuhe (000876.SZ) are also worth keeping an eye on. Jiangxi Zhengbang Technology (002157.SZ) is a potential target for operating reversal. For medium and small-scale breeding companies, companies like Tecon Biology Co. Ltd (002100.SZ), Yunnan Shennong Agricultural Industry Group (605296.SH), and Tangrenshen Group (002567.SZ) are advised. Risk warning: Risks such as price fluctuations of Shenzhen Agricultural Power Group, disease risks, policy risks, food safety, etc.