According to Zhitong Finance APP, GF Securities Co.,Ltd. (ASX: 000776) released a research report stating that the national average live hog price in September was 10.49 yuan per kilogram, down 1.5% month-on-month and down 19.6% year-on-year. Hog prices continued to fluctuate at low levels, and the industry remained in a loss-making state. Based on comprehensive data on sows, live hog inventory, and feed, the bank is optimistic about future pig cycle reversal opportunities; the current sector valuation is at a historical low, and the value of positioning is prominent, with a preference for leading enterprises with cost advantages. The raw milk price inflection point has already appeared, and the bank continues to be optimistic about the subsequent upward cycle of raw milk prices. The main views of GF Securities are as follows:

Breeding

According to Souzhu.com, the national average live hog price in September was 10.49 yuan per kilogram, down 1.5% month-on-month and down 19.6% year-on-year. The stocking demand driven by the "Double Festival" was limited, and hog prices continued to fluctuate at low levels in September, with the industry remaining in a loss-making state. At the same time, piglet prices hovered at low levels, which may reflect relatively pessimistic sentiment in the industry regarding restocking. Since September 2025, the industry has accumulated losses for one year, and pressure on capital chains has been continuously accumulating. It is expected that sow production capacity in the industry will continue to decline. Winter is a high-incidence period for live hog diseases. Against the backdrop of prolonged operating losses, breeding enterprises face significant pressure for epidemic prevention, and close attention should be paid to the live hog disease situation after temperatures drop in the north. Based on comprehensive data on sows, live hog inventory, and feed, the bank is optimistic about future pig cycle reversal opportunities. The current sector valuation is at a historical low, and the value of positioning is prominent. The bank prefers leading enterprises with cost advantages. For large-scale breeding enterprises, the bank particularly recommends Wens Foodstuff Group Co., Ltd., Muyuan Foods Co., Ltd., and suggests attention to Dekang Farming and New Hope Group. For targets with operational reversal potential, attention is suggested to Zhengbang Technology. For small and medium-sized breeding enterprises, attention is suggested to Lihua Holdings, Tiankang Biological, Shennong Group, Tangrenshen Group, and others.

In the white-feathered chicken sector, according to Boyahexun, the prices of live chickens and commercial generation chicks in September were 3.03 yuan per jin and 2.1 yuan per chick, down 10.7% and 35.1% month-on-month respectively. Integrated enterprises have significant operational advantages, and attention is suggested to Sunner Development and others. In the yellow-feathered chicken sector, according to Xinqinkuang, the price of yellow-feathered medium-speed chickens in September was 7.13 yuan per jin, up 14.1% month-on-month. Yellow chicken prices continued to rise in September, with substantial breeding profits, and Lihua Holdings, Wens Foodstuff Group Co., Ltd., and others fully benefited.

Dairy Cattle

According to Wind data, the price of fresh raw milk in major domestic production areas in September was 3.07 yuan per kilogram, up 1.3% year-on-year and up 0.3% month-on-month. Boosted by holiday stocking demand, rising loose milk prices continued to drive contract price increases, and the industry has already entered a price increase cycle. As the effects of earlier capacity reduction and aging cattle herds manifest in the future, supply may face a larger gap. In addition, downstream dairy deep processing is expected to provide new demand increments. The raw milk price inflection point has already appeared, and the bank continues to be optimistic about the subsequent upward cycle of raw milk prices.

In the beef cattle sector, the average price of live cattle in Shandong Province in September was 30.09 yuan per kilogram, up 10.6% year-on-year and up 4.4% month-on-month. Domestic beef cattle supply contraction combined with seasonal demand recovery; on the import side, quota restrictions drove beef cattle prices higher, increasing the performance elasticity of animal husbandry companies. Attention is suggested to Youran Dairy, Modern Dairy, and others.

Feed and Animal Health

Demand pull before the holiday was limited. In September, overall aquatic product prices performed below expectations and showed significant divergence. Shrimp prices continued to rise due to tight supply (delayed stocking), which indirectly reflected that low shrimp pond inventory in September caused contraction in shrimp feed demand. As this crop of shrimp enters the peak feeding period, it is expected that shrimp feed demand will see significant improvement in the fourth quarter. For specialty fish, prices of varieties with increased spring stocking continued to face pressure, while prices of varieties with reduced stocking rose slightly. Overall fish prices for common freshwater fish (excluding tilapia) declined within expectations. After two years of high prosperity, stocking of common freshwater fish increased significantly this year (excluding tilapia), and breeding profits for common freshwater fish gradually fell back to normal levels. In September, fishmeal prices remained oscillating at 20,690 yuan per ton. Future price movements still need to focus on the trial fishing and quota situation of the new fishing season in South America, with El Niño impact being the main variable. Against the backdrop of fishmeal shortages, feed enterprises' procurement and formulation capabilities are facing tests this year, and differences in feed effectiveness are gradually becoming prominent. Enterprises with product strength advantages are expected to usher in a round of market share improvement. The bank continues to be optimistic about the performance elasticity of leading shrimp and specialty feed enterprises with procurement and formulation advantages, and is also optimistic about leading enterprises' overseas feed business expansion maintaining rapid growth. In the animal health sector, losses in live hog breeding have led to cyclical pressure on industry demand, and industry competition continues to intensify. Pet medical care and synthetic biology technology have become entry tracks for animal health enterprises to break through growth ceilings. Attention is suggested to Ringpu Biology, Biotech Pharmaceutical, Tiankang Biological, and others.

Risk Warnings

Risks include agricultural product price fluctuation risk, disease risk, policy risk, and others.