Huachuang Securities: Narrow fluctuation in live pig prices, average weight continues to rise

Huachuang Securities released a research report stating that the essence of the pig industry's ability to maintain a competitive advantage of leading enterprises over many industries lies in the difference in corporate culture and organizational management. Cultivating excellent talents on a large scale can reduce costs, which requires sticking to it and persisting for decades under the guidance of a high-quality corporate culture, and continuously accumulating through a scientific system. Corresponding to the stock price level, the bank believes that the pig sector has already fully reflected pessimistic cyclical expectations in the previous period, with limited negative factors at the current position. In the short term, it is expected to undergo valuation recovery under the boost of tariff countermeasures. In the medium term, the catalyst is the interpretation of pig prices, breeding sow inventory, epidemic situation, and other factors. It is recommended to lay out the pig farming sector at the bottom. Huachuang Securities' main points are as follows: In March 2025, 14 listed pig companies achieved a total sales revenue of 25.751 billion yuan, a year-on-year increase of 28.88%, with revenue growth mainly benefiting from the increase in pig production. Among them, the enterprise with the highest year-on-year growth rate is Jiangxi Zhengbang Technology, with a year-on-year increase of 160.00%; and the lowest is Tecon Biology Co., Ltd., with a year-on-year decrease of 12.96%. In terms of prices, according to data from Yongyi Consultancy, the average selling price of pigs in March was 14.61 yuan/kg, a decrease of 0.32 yuan/kg from February and 0.03 yuan/kg from the same period last year. Among the 12 listed pig companies (excluding Tangrenshen Group, Luoniushan Co., Ltd.), the selling prices of each company differ due to the regional differences. Dongrui Food Group had the highest average selling price at 15.38 yuan/kg, and Tecon Biology Co., Ltd. had the lowest average selling price at 13.67 yuan/kg; a total of 4 sample companies had a selling price lower than the national average price of 14.61 yuan/kg in March. At the end of March, the frozen meat inventory rate was 16.85%, up 1.82 percentage points compared to the previous month, and up 1.89 percentage points from the beginning of the year. Pig prices continued to decline in March, slaughter enterprises had the willingness and conditions to put pork into storage, frozen meat inventory increased, but the capacity utilization rate is still relatively low. In March 2025, 14 listed pig companies sold a total of 17.1335 million pigs, a year-on-year increase of 40.30%. Among them, Jiangxi Zhengbang Technology (625,600 pigs, yoy+129.92%), Yunnan Shennong Agricultural Industry Group (351,400 pigs, yoy+105.74%), and Dongrui Food Group (119,800 pigs, yoy+90.76%) had higher year-on-year growth rates. Luoniushan Co., Ltd. (54,500 pigs, yoy+26.55%), Zhejiang Huatong Meat Products (228,200 pigs, yoy-3.50%), and Tecon Biology Co., Ltd. (254,700 pigs, yoy+1.74%) had relatively lower year-on-year growth rates. In March, the output of some pig companies was significantly reduced compared to the previous month, mainly due to the early slaughter of pigs before the Spring Festival, which led to adjustments in the slaughter rhythm. Active slaughter of large pigs on the breeding end led to a continued increase in the average weight of slaughtered pigs in March. According to data from Yongyi Consultancy, the national average slaughter weight of pigs in March was 128.01 kilograms, an increase of 2.74 kilograms from February, with a month-on-month increase of 2.19%. The average weights of slaughtered pigs disclosed by Beijing Dabeinong Technology Group and Jiangxi Zhengbang Technology in March were 123.21 kg and 130.28 kg, respectively, with month-on-month changes of +2.36% and -1.01%. The main reason for the continued increase in the average slaughter weight of the industry is the gradual release of pigs from earlier breeding and the increase in the enthusiasm of slaughter of large pigs due to the narrowing price difference between lean and fat pigs. In the future, attention still needs to be paid to the impact of stocking pressures brought by the gradual release of pigs and the impact on pig prices. In March 2025, the national average selling price of piglets was 37.24 yuan/kg, an increase of 2.87% compared to the previous month and 15.98% year-on-year. Yongyi Consultancy monitored that the average selling price of 15 kg piglets in the market in March was 647 yuan/head, an increase of 13.45% from the previous month. As the temperature rises and the peak season for restocking arrives, it continues to drive up the price of piglets. However, as the price of piglets rises, the enthusiasm for restocking may be suppressed, and it is expected that the short-term price increase of piglets may narrow. In March 2025, the profit of national self-sufficient pig breeding was 42.44 yuan/head, an increase of 5.09 yuan/head compared to the previous month and an increase of 188.63 yuan/head year-on-year, mainly due to the decrease in breeding costs; the profit of national purchased piglet breeding was -29.12 yuan/head in March, a decrease of 40.07 yuan/head compared to the previous month and a decrease of 85.25 yuan/head year-on-year, mainly due to the cost of purchased piglets. Risk warning: fluctuations in pig prices, large-scale uncontrollable epidemic diseases, major food safety incidents, systemic risks in the macroeconomic system, significant fluctuations in grain prices caused by trade frictions, and extreme weather disasters leading to large-scale crop production reductions pushing up grain prices.