According to the Futubull app, GF Securities released a research report stating that the average price of live pigs continued to rise in August, benefiting from factors such as the clearance of previous production capacity. With the gradual arrival of the peak consumption season in September, pig prices are expected to remain strong. The price of reserve sows has risen relatively moderately, indicating that the enthusiasm for replenishing sows by free-range farmers is relatively average, and the recovery of sow inventory may still be relatively slow, indicating that the industry's prosperity is likely to continue for a longer period of time. It is worth noting that with the recovery of farming profitability, the late batch of piglet stocking in the middle and late August showed a significant year-on-year increase, and the subsequent off-season stocking is expected to continue this trend. It is optimistic about the turning point of special aquatic feed demand.

GF Securities' main points are as follows:

Livestock and poultry farming: According to PigInfo, the average national pig price in August 2024 was 20.41 yuan/kg, an increase of 7.67% compared to the previous month and an increase of 18.43% year-on-year. The average price of live pigs continued to rise in August, benefiting from factors such as the clearance of previous production capacity. With the gradual arrival of the peak consumption season in September, pig prices are expected to remain strong.

GF Securities believes that with the decline in raw material prices and the improvement in epidemic prevention efficiency, the cost of market pigs will continue to decrease. Companies will benefit greatly from the widening gap between rising pig prices and declining costs. The level of per capita profitability is expected to exceed market expectations. The price of reserve sows has risen relatively moderately, indicating that the enthusiasm for replenishing sows by free-range farmers is relatively average, and the recovery of sow inventory may still be relatively slow, indicating that the industry's prosperity is likely to continue for a longer period of time.

The current valuation of the sector has once again fallen to a historical low. Key recommendations for large-scale farming companies include Wens Foodstuff Group (300498.SZ) and Muyuan Foods (002714.SZ), with a focus on New Hope Liuhe (000876.SZ). Small and medium-sized farming companies should pay attention to Tangrenshen Group (002567.SZ), Tecon Biology Co. Ltd (002100.SZ), Zhejiang Huatong Meat Products (002840.SZ), as well as leading pig farming companies in Sichuan and Chongqing.

As for broiler chickens, the price of commercial broiler chicks has rebounded significantly. According to Wind, the price of commercial broiler chicks in Yantai rose by 27.7% month-on-month in August. The industry is expected to gradually recover, benefiting companies like Fujian Sunner Development (002299.SZ) and Shandong Yisheng Livestock & Poultry Breeding (002458.SZ). As for yellow-feathered chickens, the current breeding stock inventory remains relatively low, and high-quality companies have obvious cost advantages. We continue to recommend Jiangsu Lihua Animal Husbandry (300761.SZ).

According to Wind, in August, the spot prices of corn, soybean meal, and fish meal decreased by 2.5%, 1.2%, and 2.5% respectively. The average price of feed decreased slightly. In August, pig prices rose, the number of newborn piglets increased, and pig feed sales maintained a trend of growth. Poultry feed demand remained stable.

In August, the price of ordinary freshwater fish remained stable. In terms of special fish and shrimp, the prices of California barramundi, live fish, and yellow croaker remained high, and the shrimp price rebounded as the inventory decreased. Overall, the prices of special fish and shrimp in August basically remained above the cost line. With the recovery of aquaculture profitability, the mid-to-late August batch of seedling volume increased significantly compared to the same period last year. The subsequent off-season batch of seedlings is expected to continue this trend, and the demand for special aquaculture feed is expected to turn upward.

Under the accelerated consolidation trend in the domestic feed industry, leading companies with strong procurement and formula research and development capabilities will further highlight their competitive advantages. It is optimistic about the continuous increase in the share of Guangdong Haid Group (002311.SZ) and the expansion of overseas markets. With the recovery of aquaculture profitability, the animal husbandry industry is expected to bottom out and rebound. Currently, the valuation of the sector is at a historical low. It is recommended to pay attention to Jinyu Bio-Technology (600201.SH), China Animal Husbandry Industry (600195.SH), and Pulike Biological Engineering, Inc. (603566.SH).

In the planting industry, according to the semi-annual reports of listed seed companies, the planting area decreased in the first half of the year due to the decrease in prices of crops such as corn, and the return volume of seeds increased at the end of the second quarter. China's industrialization of biological breeding is steadily advancing. It is recommended to pay attention to Yuan Longping High-Tech Agriculture (000998.SZ), Shandong Denghai Seeds (002041.SZ), and Beijing Dabeinong Technology Group (002385.SZ). According to Wind, the average spot price of soybean meal in August was 3126 yuan/ton, a month-on-month decrease of 1.24% and a year-on-year decrease of 34.55%. The USDA supply and demand report in August raised the production expectation of soybeans in the United States for the 24/25 fiscal year to 4.589 billion bushels. The expectation of a bumper soybean crop in the United States and the dual pressure of supply and demand suppress the domestic soybean meal price. It is expected to fluctuate at a low level.

Pet food: The 26th Asia Pet Show was held from August 21st to 25th, with about 260,000 exhibited brands, an increase of about 8% compared to last year. Leading domestic brands launched new products and conducted diversified marketing at the show, such as Yantai China Pet Foods launching 100% fresh meat premium cat food and Zeal collaborating with "Naiwa". Pay attention to the expansion of domestic markets by leading companies. It is recommended to pay attention to Guai Bao Pets (301498.SZ), Yantai China Pet Foods (002891.SZ), and Petpal Pet Nutrition Technology (300673.SZ).

Risk warning: Agricultural product price fluctuation risk, disease risk, policy risk, etc.