Intelligent Financial App learned that Huafu Securities released a research report stating that with the national temperature dropping, pork demand will gradually improve. Against the background of limited supply growth, pig prices are expected to rebound in the peak season at the end of the year, and high profits in Q4 are expected to continue. Currently, the industry's capacity recovery is slow, and the current cycle's prosperity range is expected to extend. It is recommended to focus on low-cost, high-growth pig enterprises such as Muyuan Foods (002714.SZ), Wens Foodstuff Group (300498.SZ), Zhejiang Huatong Meat Products (002840.SZ), etc.

Huafu Securities' main points are as follows:

Volume: The significant increase in output in October compared to the previous month.

In October, a total of 14.2979 million pigs were slaughtered by 18 pig enterprises, a month-on-month increase of 14.56% and a year-on-year increase of 12.53%. In terms of the month-on-month growth rate in October, Tangrenshen (+55.34%), Zhengbang Technology (+42.75%), Muyuan Foods (+21.28%), and Beijing Dabeinong Technology Group (+19.83%) showed significant increases in output. On the other hand, *ST Aonong (-25.17%), Shenzhen Kingkey Smart Agriculture Times (-19.82%), and Luoniushan Co., Ltd. (-8.30%) experienced a significant decline in output. Looking at the year-on-year growth rate for October, Dongrui shares (+128.44%), Shen Nong Jituan (+73.63%), Jiangsu Lihua Animal Husbandry (+55.98%), Muyuan Foods (+33.16%), etc., showed a year-on-year increase in output. On the contrary, *ST Aonong (-76.08%), Hunan Zhenghong Science and Technology Development (-47.93%), and ST Tianbang (-38.75%) witnessed a decrease in output compared to the same period last year.

Structure: The proportion of piglet sales in October decreased.

After piglet prices fell to a low point, some regions saw a small number of retail investors and breeding companies bottoming out and replenishing their herds. In early October, piglet prices stopped falling and rebounded, but considering winter pig diseases, the overall impact of herd replenishment on the market is relatively small, and the increase in piglet prices is limited. The average price per month still declined month-on-month, with the price of 7kg piglets in large-scale farms in October being 305.84 yuan/head, a decrease of 18.70% month-on-month. In October, 8 listed pig enterprises collectively sold 0.8312 million piglets, an increase of 4.12% month-on-month, accounting for 9.55% of the total production, a decrease of 1.50 percentage points month-on-month. Among them, Muyuan Foods sold 0.234 million piglets in October, a month-on-month decrease of 27.78%, accounting for 3.60% of the production, a decrease of 2.45 percentage points month-on-month.

Completion rate: The average completion rate of listed pig companies' slaughter plan from January to October is 80%.

As of October, the average completion rate of the slaughter plan for 10 listed pig companies is 80.49%, with a decrease of -0.6% compared to the same period last year. Among them, New Hope (91.16%), Jiangsu Lihua Animal Husbandry (85.24%), Sunzen Group (82.96%), and Beijing Dabeinong Technology Group (82.14%) ranked top in the annual completion rate of the slaughter plan. Compared with the same period last year, Tangrenshen, DongRui Stock 24-year January to October slaughter progress is slower than the same period last year. Muyuan Foods, Tecon Biology have little change in slaughter progress compared to the same period last year, while New Hope, Jiangsu Lihua Animal Husbandry have faster slaughter progress than the same period last year.

Average price: The proactive slaughter at the breeding end led to a decrease in the average price of pig companies in October.

Due to concerns about the future market, active slaughter at the breeding end in October aimed to lock in profits. Data from Young Yi/Steel Union/Zhuochuang showed that the completion rates of large-scale farms in October were 104.18%/104.45%/103.81%, indicating a certain degree of overselling, and the overall pig price showed a downward trend. The average sales price of listed pig companies also fell back. In October, the average hog sales price for 13 listed pig companies was 17.64 yuan/kg, a decrease of -6.84% compared to the previous month, and an increase of 16.97% year-on-year. Among them, the sales prices of Muyuan Foods/Wens Foodstuff Group/New Hope were 17.17/17.64/17.37 yuan/kg, a decrease of -7.94%/-7.40%/-7.66% compared to the previous month, and an increase of 18.25%/16.74%/16.50% year-on-year.

Weight: The average weight in the industry slightly decreased month-on-month in October.

In October, the active reduction of weight by the group enhanced the willingness to slaughter, leading to a decrease in the average trade weight per month. The average weight of live pigs slaughtered/after slaughter in the industry was 125.95/91.04 kg respectively, a decrease of -0.03/-0.14 kg month-on-month. From the perspective of listed companies, excluding the impact of piglet and sow sales, 4 out of 6 listed pig companies saw an increase in average weight in October. It was calculated that the average weight of slaughtered pigs from Muyuan Foods/Wens Foodstuff Group/Jiangsu Lihua Animal Husbandry/Zhenghong Science and Technology in October was 120.31/123.31/122.09/137.58 kg, an increase of 1.23/0.69/1.89/3.86 kg respectively month-on-month. While 2 companies had a decrease in average weight, with Beijing Dabeinong Technology Group/Sunzen Group having average weight of 126.98/126.52 kg, a decrease of -1.57/-1.69 kg month-on-month.

Risk warning

Risks include outbreaks of animal diseases, fluctuations in commodity prices, natural disasters, and other risks.