GF Securities: The white chicken industry chain is expected to improve, pay attention to the overseas introduction rhythm.

GF SEC released a research report stating that prices in the white chicken industry chain have rebounded recently. Based on the previous generation breeding stock and sales volume of chicken seedlings, it is expected that the industry supply in 2026 is expected to gradually improve, and the industry chain may see a rebound in prospects. In addition, due to the impact of avian flu in France, overseas breeding has been interrupted again, which may effectively support the profitability of upstream chicken breeding prices. Considering that mandatory molting and other industry capacity adjustments are still important disruptive factors affecting the normal supply rhythm, focus should be on factors such as sales volume of parent breeding chicken seedlings. In recent years, poultry farming enterprises have accelerated integration upstream and downstream, and the trend of the whole industry chain is obvious. GF SEC's main points are as follows: The white chicken industry in 2025 maintained a slight profit, and the trend of integration of the entire industry chain is obvious. Influenced by factors such as relatively sufficient supply and declining pork prices, the prices of live chickens and commercial breeding chicken seedlings in 2025 were generally at a low level of volatility, and the prices of parent breeding chicken seedlings showed a downward trend. In terms of profits in various links, the profitability of the upstream breeding chicken link is better than the downstream farming and processing end, and the sales of parent breeding chicken seedlings achieved profits throughout 2025, while the downstream farming and processing end is overall in a loss. In 2025, the scale and intensification of the industry further improved, and the white chicken industry chain gradually entered a phase of slight profitability. The industry continued to deepen integration, and poultry farming enterprises continued to promote the transformation of the whole industry chain. According to Zhuochuang Consultation, the total slaughter quantity of the top 10 enterprises in the broiler chicken industry accumulated to 4.274 billion in 2025, accounting for as high as 46%. Enterprises that integrated the entire industry chain early have advantages gradually emerging due to downstream channel advantages, and synergy of various links in the industry chain. Overseas avian flu caused interruptions in breeding, and domestic breeding chicken substitution accelerated. According to data from the Poultry Association and Boya Wanxin, from January to December 2025, the cumulative updated quantity of domestic breeding chickens was 1.574 million, a year-over-year increase of 4.9%. In terms of structure, domestic self-bred updates and French breeding account for approximately 60% and 40%, respectively. As for overseas breeding, according to ECDC data, in December 2025, France experienced an outbreak of highly pathogenic avian flu, leading to another interruption in overseas breeding, exacerbating the uncertainties in overseas chicken supply. In addition, domestic breeding chicken substitution continues to accelerate, with domestic breeding chickens showing advantages in disease resistance, adaptability, and overall performance improvement, gradually catching up with foreign breeds. According to the Poultry Association, in 2025, the cumulative proportion of updates for three domestic breeding chicken varieties was 33.6%. The industry chain in 2026 is expected to see improved prospects, but attention still needs to be paid to production capacity flexibility. Since the fourth quarter of 2025, the inventory of domestic breeding chickens in production has started to decline month-on-month. Without considering molting and mortality rates, it can be estimated that the year-on-year decline in the inventory of breeding chickens in production in March and April 2026 will be approximately 3.3% and 12%, respectively. Correspondingly, it is expected that from the first quarter of 2026 onwards, the inventory of parent breeding chickens in production will gradually decline, and according to the normal production cycle, industry supply in the second half of 2026 is expected to gradually improve. In addition, due to the impact of avian flu in France, overseas breeding has been interrupted again, which may effectively support the prices of upstream parent breeding chicken seedlings, and it is expected that the upstream breeding chicken link will maintain a good outlook in 2026. Looking at the whole year, it is expected that the overall supply of the white chicken industry chain will gradually improve in 2026, and the farming end is expected to achieve profitability. However, as industry capacity adjustments remain a significant factor disrupting the normal supply rhythm, attention should still be paid to the uncertainties in supply brought about by the release of production capacity flexibility. Risk warning: Risk of fluctuation in chicken prices, risk of fluctuation in feed prices, epidemic risk, food safety, etc.