CMSC: Post-holiday white chicken prices slightly fell, yellow feather chicken still generates good profits.

CMSC released a research report stating that in February, the chicken source was relatively sufficient, but the post-holiday demand was limited, causing chicken prices to gradually decrease slightly after the Spring Festival; due to the low cost of chicken seedlings in the early stage, the breeding end still had a certain profit; and the price of chicken products was significantly better than in previous years. The post-holiday supply of chicken seedlings was not large, and poultry enterprises were willing to support the price, which led to an improvement in seedling prices. During the Spring Festival, consumption of yellow-feathered chicken in restaurants and households improved, especially with slow-moving chicken prices remaining strong before the holiday, and fast-moving chicken also maintained good profitability during the holiday. The main points of the CMSC are as follows: White-feathered chicken: Post-holiday chicken prices fell, chicken product prices significantly better than in previous years In February, the average price of broilers in the main production areas was 7.49 yuan/kg, a year-on-year increase of 24%, and a month-on-month decrease of 1.9%; the average price of chicken seedlings was 2.52 yuan/bird, a year-on-year increase of 19.2% and a month-on-month increase of 4.4%; the average price of chicken products was 9300 yuan/ton, a year-on-year increase of 2.8% and a month-on-month increase of 0.5%; the breeding end of broilers had an average loss of 0.02 yuan per bird. This month, the chicken source was relatively sufficient, but the post-holiday demand was limited, causing chicken prices to gradually decrease slightly after the Spring Festival; due to the low cost of chicken seedlings in the early stage, the breeding end still had a certain profit; and the price of chicken products was significantly better than in previous years. The post-holiday supply of chicken seedlings was not large, and poultry enterprises were willing to support the prices leading to an improvement in seedling prices. For yellow-feathered chicken: Restaurant and household consumption improved, and profits for yellow chickens significantly improved In February, the average price of fast-growing broilers was 4.24 yuan/jin, a year-on-year decrease of 13.4% and a month-on-month decrease of 12%; the average price of Snow Mountain free-range chicken was 7.93 yuan/jin, a year-on-year decrease of 5% and a month-on-month increase of 3.3%. During the Chinese New Year, consumption of yellow-feathered chicken in restaurants and households improved, especially with slow-moving chicken prices remaining strong before the holiday, while fast-moving chicken also maintained good profitability during the holiday. Taking production capacity into account, the current parental generation capacity has dropped to historically low levels, coupled with the industry's losses for more than half a year in 2025, further driving the clearance of capacity, contracting supply, and laying the foundation for chicken price increases. Starting from Q4 2025, yellow chickens entered a phase of prosperity, and chicken prices significantly rebounded, with high-quality enterprises seeing an increase in both volume and price. The cost of yellow-feathered broilers has dropped to a low level, with the average profit per bird of leading breeding companies in February reaching around 2 yuan, and expectations are for the high prosperity of yellow chickens to continue in 2026. The prosperity of the white-feathered chicken breeding end is good, and yellow chickens may release profits in 2026. 1) White-feathered chicken: In 2025, China's ancestral parent chicken imports decreased by more than 10% year-on-year. In addition, in November-December 2025, avian influenza occurred in the main production areas of parental chickens in Maine-et-Loire and Pas-de-Calais in France, further affecting introduction scenarios. It is expected that the prosperity of the parental generation of chickens in 2026 will be high, which will also affect the supply of commercial parent chicken seedlings. Positive outlook for the breeding industry. Fujian Sunner Development (002299.SZ) is recommended. 2) Yellow-feathered chicken: The inventory of parental chicken in the current period has dropped to historically low levels, and in addition, the industry had losses for more than half a year in 2025, laying the foundation for subsequent chicken price increases due to supply contraction. Starting from Q4 2025, yellow chickens entered a phase of prosperity, and chicken prices significantly rebounded, with premium enterprises seeing an increase in both volume and price, and demonstrating excellent profitability per bird. Expect the high prosperity of yellow chickens to continue in 2026, with a focus on recommending Jiangsu Lihua Foods Group (300761.SZ) and DEKON AGR (02419). Risk Warning Unexpected fluctuations in chicken prices; listed company sales and cost performance are lower than expected; sudden large-scale uncontrollable diseases; unexpected fluctuations in feed ingredient prices; major food safety incidents.