Huachuang Securities: Gross chicken prices stabilize after a September decline, while chick prices fluctuate at high levels.

Huachuang Securities released a research report stating that in early September, the breeding end actively replenished farms, and the demand end transported chicks across regions. The price of white-feathered chicken chicks showed a strong trend, with the average price rising slightly from 3.27 yuan/chick to 3.31 yuan/chick; in mid-September, the price of broiler chickens decreased, with the cost of raising chickens increasing due to the tight plan for stocking chicks, causing the price of white-feathered chicken chicks to decrease slightly, ranging between 3.03-3.20 yuan/chick; toward the end of the month, various factors drove the price of chicken chicks to rise and stabilize, fluctuating between 3.13-3.28 yuan/chick. Regarding meat chickens, after the price of chicken meat rose, it remained stable at a high level, with a loss of 1 yuan/chick for broiler chicken farming in September. The profitability decreased significantly compared to the previous month, with a loss of 0.41 yuan/chick for hatcheries, also a significant decrease in profitability. Huachuang Securities' main points are as follows: Broiler Chickens & Chicks: Broiler chicken prices stabilized after falling, while chick prices fluctuated at a high level in September. Chick prices fluctuated at a high level in September. In early September, the breeding end actively replenished farms, and the demand end transported chicks across regions, causing white-feathered chicken chick prices to rise slightly from an average of 3.27 yuan/chick to 3.31 yuan/chick; in mid-September, as broiler chicken prices fell and the cost of raising chickens increased, coupled with a tight stocking plan for chicken chicks, the price of white-feathered chicken chicks decreased slightly to between 3.03-3.20 yuan/chick; by the end of the month, various factors drove the price of chicken chicks to rise and stabilize, with the average price fluctuating between 3.13-3.28 yuan/chick. Chicken Meat: Chicken meat prices stabilized at a high level after rising. In September, the national average price of white-feathered broiler chickens was 6.99 yuan/kg, a year-on-year decrease of 3.22% and a month-on-month decrease of 2%; the average price of chicken meat products was 8712.92 yuan/ton, a year-on-year increase of 3.77% and a month-on-month decrease of 2.18%. In September, the newly introduced national breeds mainly include French AA+, Liche, and domestic breeds. Among them, French-imported Lifen varieties account for 25.00%, AA+ varieties account for 47.73%, and domestic varieties account for 27.27%. In terms of parental generation capacity, in September 2025, the average inventory of parent chickens in production was 13.6 million, an increase of 1.7% compared to the previous year but a decrease of 1.4% compared to the previous month; the average inventory of back-up parent chickens was 6.7 million, a decrease of 11.6% year-on-year and 10.7% month-on-month. In terms of parent chicken chick prices, in September 2025, the price was 47.47 yuan/chick. The latest data for Week 41 of 25 is 40.55 yuan/chick. In summary, both chicken chick and broiler chicken farming prices decreased compared to the previous month. In September, broiler chicken farming had a loss of 1 yuan/chick, with profitability decreasing significantly. Hatcheries had a loss of 0.41 yuan/chick, with profitability also decreasing significantly. Investment Recommendations: Focus on improving chicken meat demand in the long term under the expectation of consumption recovery Looking ahead to 2025, in terms of supply, the upstream breeding stage of white-feathered chickens has sufficient supply. It is crucial to pay attention to the sustained impact of overseas avian influenza on the breeding stage and issues such as domestic poultry diseases affecting the breeding and egg production performance of commercial broiler chickens. In terms of demand, the general lackluster consumer spending has always been a key factor suppressing demand and prices for chicken meat products, thereby affecting the profitability of the industry chain. Against the backdrop of expanding domestic demand, chicken meat consumption is expected to receive a boost. With operating costs still at a low level, meat chicken enterprises are expected to see improved profitability and valuation repair. The recommended targets are Fujian Sunner Development (002299.SZ), Shandong Yisheng Livestock & Poultry Breeding (002458.SZ), Wellhope Foods (603609.SH), etc. Furthermore, as domestically bred white-feathered broilers continue to be researched, developed, and upgraded, there is a possibility of narrowing the efficiency gap with overseas breeds in the commercial breeding stage. Looking at the long-term perspective, the market share of domestically bred varieties is expected to continue to increase. Risk Warning Overseas parent chicken breeding recovering faster than expected, domestic avian flu and other farming diseases breaking out, downward trend in chicken meat prices, major food safety incidents, systemic risks in the macroeconomic system.