From the current valuation perspective, the sector has been adjusted and the valuation is at a low level.
According to the data monitored by the Ministry of Agriculture and Rural Affairs, the national stock of breeding sows in July was 40.41 million, up 0.7% month-on-month and down 5.4% year-on-year.
gtja released a research report stating that the current hog prices are high and the breeding profits have significantly improved compared to the same period last year. In the second quarter, breeding profits turned from a loss to a profit, and it is expected that breeding profits will continue to grow quarter on quarter in the third quarter.
From the current valuation perspective, the sector has gone through adjustments and is at a low valuation level.
CITIC Securities pointed out that the average price of live pigs in China in this period was 21.08 yuan/kg, a decrease of 2.3% from the previous period and an increase of 20.8% year-on-year.
The supply-side pressure on large pigs has begun to be released gradually, and pig prices may continue to consolidate in the short term. However, due to the supply gap caused by the elimination of previous production capacity, and with the weather gradually cooling down, the slaughter volume is expected to maintain an upward trend. The inventory rate of frozen products has also fallen to a low level. It is expected that the pressure on pig prices may be limited in terms of duration and magnitude, and the peak consumption season is still expected to see an upward trend. It is necessary to continue to pay attention to changes in indicators such as slaughter weight and standard fat price difference in the short term.
The national stock of breeding sows in July was 40.41 million, almost unchanged from the previous month, indicating that there was still a cautious approach to mating operations in the industry under high pig prices in July. This cautious decision-making may continue the prosperity of the current cycle, and the industry is expected to continue its upward trend.
Domestic hog farming related enterprises:
COFCO Joycome (01610), Dekang Agriculture and Animal Husbandry (02419)
Overseas hog farming enterprises: WH Group (00288)
