CMSC: Bai Yu chicken breeding branch turns losses, Huang Yu chicken profitable performance excellent

CMSC released a research report stating that by 2025, the import volume of parent generation chickens in China will decrease by more than 10% year-on-year, and overseas avian influenza will further impact domestic introductions. It is expected that the parent generation chickens will have a relatively high prosperity level in 2026, which will also affect the supply of commercial chicken seedlings. In March, the prosperity of white-feathered chickens at the poultry end was high, with chicken product prices better than the same period last year and the farming end turning losses; holiday demand boosted the prosperity of yellow-feathered chickens, with top companies showing excellent average profitability per feather. Starting from Q4 of 2025, yellow chickens have entered an upturn cycle, with chicken prices significantly rising and quality companies seeing profits rise, expecting the high prosperity of yellow chickens in 2026 to continue. Key points from CMSC: White-feathered chickens: High prosperity at the breeding end in March, turning losses at the farming end In March, the average price of chickens in the main production areas was 7.21 RMB/kg, up by 1.2% year-on-year and down by 3.7% month-on-month; the average price of chicken seedlings was 3.01 RMB/feather, up by 7.3% year-on-year and up by 19.3% month-on-month; the average price of chicken products was 9088 RMB/ton, up by 1.1% year-on-year and down by 2.3% month-on-month; the average profit per feather at the farming end was 0.13 RMB, turning losses from the previous month. After the Lantern Festival, chicken prices stabilized and slightly declined, with prices rebounding at the end of the month; although rising feed costs squeezed farming end profits, farming profits improved compared to February; seedling prices were on the rise. Expecting high prosperity at the breeding end. Yellow-feathered chickens: Holiday demand boosted chicken prices, good profitability for yellow chickens In March, the average price of fast-growing chickens was 4.93 RMB/jin, up by 0.4% year-on-year and up by 2% month-on-month; the average price of Snow Mountain free-range chickens was 6.51 RMB/jin, down by 5.4% year-on-year and up by 15% month-on-month. Chicken prices showed a trend of starting low and then rising, with a significant rebound in prices in the second half of the month due to stockpiling for the Qingming Festival. With current parent generation capacity at historically low levels, combined with industry losses exceeding six months in 2025, driving further capacity reduction, the contraction in supply is laying the foundation for rising chicken prices. Yellow chickens entered an upturn cycle from Q4 of 2025, with significantly rising prices, and quality companies seeing an increase in profitability. The cost of raising yellow feathered meat chickens has dropped to a low level, with estimated profits per feather for quality companies in Q1 of 2026 at around 1-2 RMB. Expecting profits to be released by leading companies. Good prospects for white-feathered chickens at the breeding end, with profits potentially released by yellow chickens in 2026 1) White-feathered chickens: By 2025, the import volume of parent generation chickens in China is expected to decrease by more than 10% year-on-year, and with avian influenza outbreaks in Main-Loire and Armorica in France in November and December 2025, the overall import source update volume is under pressure. The first quarter saw excellent prices for parent generation chickens, and it is expected that the prosperity of parent generation chickens will be relatively high in 2026, which will also affect the supply of commercial chicken seedlings. Expecting good prosperity at the breeding end. Focus on recommending Fujian Sunner Development. 2) Yellow-feathered chickens: The current inventory of parent generation chickens has dropped to historically low levels, and with industry losses exceeding six months in 2025, the contraction in supply is laying the foundation for subsequent increases in chicken prices. Yellow chickens entered an upturn cycle from Q4 of 2025, with significantly rising prices, quality companies seeing an increase in both volume and price. Expecting the high prosperity of yellow chickens in 2026 to continue, and focusing on recommending Jiangsu Lihua Foods Group and DEKON AGR. Risk warning: Chicken price fluctuations exceed expectations; sales and cost performance of listed companies are below expectations; sudden large-scale uncontrollable epidemic outbreaks; feed raw material price fluctuations exceed expectations; major food safety incidents.